Lonmin (LON), the world’s third-largest platinum producer, on Tuesday confirmed that up to 5 500 jobs would be lost at its Marikana and Limpopo operations.
The company said in a statement to the JSE that it had reached an agreement with trade unions regarding the retrenchment of employees as a result of restructuring.
“The agreement at Marikana allows for a reduction of up to 4 000 full-time employees or contractors, 300 of which are expected to be management personnel,” Lonmin said, adding that following agreement at Limpopo, the Baobab shaft will be placed on care and maintenance, with about 1 500 full-time employees expected to be retrenched.
“The final number of personnel affected, as well as the associated expected annual cost savings and one-off costs of this down-sizing, will be confirmed once the restructuring programmes at Marikana and Limpopo are completed,” the company said.
The decision to put Baobab on care and maintenance has, however, trimmed the company’s production forecast for the year.
Lonmin in November announced that it expected sales for the 2009 financial year to be broadly in line with sales in the prior year at about 725 000 platinum ounces, including an anticipated full year’s contribution from Limpopo of approximately 25 000 platinum ounces.
Following the agreement to place Limpopo on care and maintenance, the company re-confirms that it still expects to achieve sales of about 700 000 platinum ounces from a full year’s production at Marikana.
“With the current backdrop of challenging economic conditions, these agreements are an important milestone in our objective of restructuring the company,” said Lonmin chief executive Ian Farmer.
“At Marikana, we are now focused on engaging with our employees to complete the required downsizing. At Limpopo, the Baobab shaft will be put on care and maintenance as soon as possible,” said Farmer.
He said the company’s dialogue with the unions was “constructive and pragmatic”.
“We appreciate their active engagement during this difficult period. While the unions have understandably executed their mandate to protect the interests of their members, they have displayed an appreciation of our efforts to ensure the long term sustainability of the company,” Farmer added.
At 9.19am shares in Lonmin were unchanged at R150 on the JSE. The stock has gained 19,24% or R24,20 this month to date. — I-Net Bridge