Lonmin to restart smelting in anticipation of strike end
Lonmin Plc, the world’s third-largest platinum producer, said it will start processing metal this month as it anticipates an end to a strike that has crippled its operations in South Africa for more than 15 weeks.
Lonmin reported a loss of 35.5 cents a share for the six months ended March 31, compared with a profit of 13.3 cents a year earlier, it said in a statement on Monday. A pay strike by the members of the biggest union at its operations since January 23 has resulted in 155 720 platinum ounces being lost, the Johannesburg-based company said.
“Operations have been at a virtual standstill for nine of the possible 12 weeks of production” of the second quarter, it said. “We will start the processing operations during May 2014 to process the remaining” metal in the company’s stockpiles.
Anglo American Platinum, Impala Platinum Holdings and Lonmin have lost R17.5-billion ($1.7 billion) in revenue because of the country’s longest mining strike while employees have forfeited R7.8-billion in wages, according to a website run by the companies.
The Association of Mineworkers and Construction Union (Amcu) has rejected the producers’ latest offer of R12 500 a month by 2017 including benefits, instead demanding that amount in base pay, which excludes allowances.
Amcu’s demand “still represents an annual increase of 29%,” Lonmin said. “This remains completely unaffordable and would have disastrous consequences for our business, people, communities and country if we were to agree to it as it will result in shaft closures and job losses.”
The companies took their pay proposals directly to workers last month in an attempt to break the strike.
“We expect to be able to assess the success of the return to work by the end of May 2014 with production provisionally scheduled to start in June if successful,” Lonmin said. “The company has a robust programme for further cash conservation measures to protect the assets, which may include a restructuring plan should the anticipated start up in June 2014 not materialise.” – Bloomberg