Lonmin to cut jobs, close shafts amid platinum slump
Johannesburg-based Lonmin, the world’s third-biggest platinum producer, may cut as many as 6 000 jobs and close shafts as prices slumped to the lowest in six years.
Lonmin plans to close its Hossy and Newman shafts and idle three others, reducing annual output by 100 000 ounces, the Johannesburg-based company said in a statement Friday. The planned job cuts include contractors and staff who took voluntary redundancy packages offered in May, Lonmin said.
Mining companies in South Africa, which accounts for more than 70% of global platinum output, are looking to reduce costs as profit margins shrink with tumbling metal prices. Platinum has dropped 45% since the start of 2011.
“The consequence of these decisions will be that the remaining shafts will allow for a smaller, more sustainable and agile business,” it said. “Our objective is to save the majority of the positions in the company. All costs, not just labour costs, have to be reduced and productivity improved if the business is to be sustainable.”
Lonmin, which employed more than 28 000 people as of September 30, is making a loss before interest, tax, depreciation and amortisation, the company said.
“Our cost-minimisation plans are designed to improve this position as much as possible,” it said.
Lonmin will review its capital structure and will make an announcement by November, it said.