Lonmin Workers Agree to 22% Pay Rise, to Return Sept. 20
Stock Chart for Lonmin PLC (LMI)
A group of workers at Lonmin Plc (LMI), the third-largest platinum producer, said they will accept a 22 percent overall pay increase and return to work Sept. 20, bringing the company closer to ending an almost six-week strike.
The workers will get a one-time payment of 2,000 rand ($245) for returning to work, Bishop Jo Seoka of the South African Council of Churches, a pay-talks mediator, said at the Marikana platinum mine at Rustenburg, north west of Johannesburg today.
The miners who said they would accept the offer were gathered in a stadium at Marikana and it wasn’t clear which unions, if any, they were affiliated to. They will sign an agreement later, said Molifi Phele, a representative of the group. The National Union of Mineworkers, the Association of Mineworkers and Construction Union and the Solidarity union didn’t immediately announce their response to Lonmin’s offer.
Pay grievances triggered a violent strike last month and halted the Marikana mine, which accounts for about 96 percent of Lonmin’s output. Platinum has jumped 17 percent since Aug. 10, when 3,000 rock-drill operators began a wildcat strike at the Marikana mine for more pay. The unrest has left at least 45 people dead, including 34 protesters shot by police on Aug. 16.
“The workers are very happy with this,” Seoka said. “The actual increase is about 22 percent, which is very high -- that’s never happened,” he said.
Lonmin cut its fiscal 2012 sales target yesterday by as much as 8.7 percent to 685,000 ounces and said it will idle its K4 shaft. Debt conditions may be breached, Lonmin said last month.
The unrest has spread to nearby operations owned by Aquarius Platinum Ltd. (AQP) and Anglo American Platinum Ltd. (AMS), which reopened mines that had been idled late last week. The strikes have cost the economy 4.5 billion rand, South African President Jacob Zuma said yesterday at a conference in Johannesburg.
“The longer-term damage to South African mining may be far greater as international investors shy away from investment in local mines,” London-based investment services company Fairfax I.S. Plc said in a note today. “Ethical and socially responsible mandated funds will struggle to buy into miners where mineworker violence is an issue.”
Anglo American Platinum, the largest producer of the metal, suspended operations with output of 2,100 ounces daily on Sept. 12 as some workers were intimidated and others started a pay strike.
The company urged all employees to return to work by no later than tomorrow, it said in a statement.
“Beyond this date, the company will have to initiate appropriate employee relations procedures for those employees who choose not to return to work,” it said. Operations have resumed, the company said.
At the Rasimone Platinum mine in Rustenburg, a joint venture between Royal Bafokeng Platinum Ltd. (RBP) and Anglo American Platinum, police arrested 42 people for public violence yesterday.
The mine was quiet today, spokeswoman Rea Kalebe said. It was “too early” to comment on attendance.
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