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Magara threatens Lonmin job cull as miners killed
12/05/2014 00:00:00
by Bloomberg.com
 
Workers killed ... Ben Magara
 
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THREE miners were killed as Lonmin Monday said the success of plans to restart South African platinum operations after more than 15 weeks of a pay strike would depend on whether workers felt safe to report for duty.

Two non-striking employees were murdered near Lonmin’s Eastern Platinum mines in an attack that involved a machete, Livhuwani Mammburu, a spokesman for the minority National Union of Mineworkers, whose members aren’t taking part in the stoppage, said by phone.

Another labourer and his wife were killed at a house, he said.

Miners need to feel safe to report for duty, Ben Magara, chief executive officer of the world’s third-largest platinum producer, said as the company prepared to resume operations on May 14.

“We have engaged with the government, we have engaged with mine security to ensure that there can be enough visible enforcement and policing,” he said on a conference call. “We are appealing for peace, we are appealing for tolerance.”

Members of the Association of Mineworkers and Construction Union, the biggest labour organization at Lonmin, Anglo American Platinum and Impala Platinum, have been on a pay strike since January 23.

The AMCU wants basic monthly pay, without benefits, to be more than doubled for entry-level underground employees to 12,500 rand ($1,209) by 2017, while producers are including cash allowances in that figure.

The producers have so far lost 17.5 billion rand in revenue because of the country’s longest mining strike and workers have forfeited 7.8 billion rand in wages, according to a website run by the companies.

Return Supported

Lonmin had “overwhelming support” from employees for a return to work after the company appealed directly to miners by text message and voice mail, Magara said. The producer will have to cut jobs unless employees come back, he said.

“The business will have to be restructured with a consequence on job losses” if there’s further delay, he said.

“We will have a better sense of the take-up towards the end of this month and whether we have the correct mix of skills to enable us to safely restart operations.’’

The NUM is concerned over the killing of its members around Rustenburg, about 120 kilometres northwest of Johannesburg, Mammburu said.



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‘‘You can’t say you want employees to come back and then they’re killed,” he said.

At least 20 acts of assault were reported today and yesterday, while there have been “a number of serious incidents of intimidation against employees and bus operators providing transport to mining-company employees,” the companies said in a separate statement.

Encouraging Return

UASA, another minority union at Lonmin, will encourage its members to report for duty on May 14, Franz Stehring, the organization’s head of mining, said by phone.

“One cannot allow a few individuals to indefinitely intimidate the masses,” Stehring said. The union was satisfied with Lonmin’s arrangements to create a safe passage to work, including visible security and transport convoys for returning miners, Stehring said.

Lonmin has skilled workers in place to resume processing in May before an expected ramp-up of output in June, Magara said.

About 9 percent to 11 percent of employees reported for duty on May 9, Vice-President for Public Affairs Lerato Molebatsi said.

Impala, the second-largest producer, is completing analysis of responses from workers on the settlement offer, Johan Theron, a spokesman for the Johannesburg-based company, said by phone.

Safety Concern

“We will not open our mines if we do not have the overwhelming support of employees and cannot guarantee their safety,” Theron said.

Amplats, as the world’s largest producer is known, has seen an increase in attendance levels at its strike-hit mines, spokeswoman Mpumi Sithole said by phone.

It’s providing bus services to employees, while mining security has stepped up visibility along transport routes, Sithole said.

The AMCU will call fresh industry strikes should companies cut jobs, union President Joseph Mathunjwa said May 5. He didn’t answer calls seeking comments today.

Lonmin posted a loss first-half loss of 35.5 cents a share after a profit of 13.3 cents a year earlier, it said today in a statement. It lost 155,720 platinum ounces by March 31, it said in a statement.

The company reduced spending by about 60 percent and may cut it further to preserve cash during the strike, Magara said. Net cash was $71 million at March 31, with available debt facilities of $589 million, it said.

Magara, from Zimbabwe, became Lonmin CEO in July 2013, 11 months after 34 protesters protesting conditions and pay were killed by police in a single day near the company’s Marikana operations.

The AMCU has surged in membership since the killings and is now the dominant union in South Africa’s platinum industry.

“Management is experienced at recovering from such disruption,” Investec said in a note today. “However, until workers return, estimating the operational performance in the year ahead is exceptionally challenging.”


 
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