Lonmin Says Miners Refuse to Go Underground at Two Shafts

Workers at two of Lonmin Plc (LON) shafts refused to go underground for the morning and afternoon shifts today, demanding that a union close its office at the operations of the world’s third-largest platinum producer.

“Newman and Saffy will be out for the entire day,” company spokeswoman Sue Vey told reporters today in Marikana, about 170 kilometers (106 miles) northwest of Johannesburg, referring to two of Lonmin’s shafts. “The company is meeting with all the unions.” There are more than 5,800 workers at the two shafts, including more than 600 contractors, Vey said.

Employees demanded the National Union of Mineworkers close its representative office at the company before they would go underground, Natascha Viljoen, executive vice president for processing, told reporters. No incidents of violence were reported, Executive Vice President for Mining Mark Munroe said.

Tension between members of the NUM and the Association of Mineworkers and Construction Union contributed to 10 days of violence at Lonmin’s Marikana operations in August in which 10 people died. Police opened fire on striking workers at the mine near Rustenburg on Aug. 16, killing 34 protesters in the deadliest police violence since the fall of apartheid in 1994.

The NUM, which used to be the dominant union at the company’s operations, represents about 30 percent of workers, while the AMCU speaks on behalf of 51 percent, Viljoen said.

Shares Drop

Lonmin declined 1.1 percent to 332.6 pence by 4:09 p.m. in London, while the stock dropped 1.6 percent to 45.49 rand by the close in Johannesburg.

The Saffy shaft produces 260 saleable ounces of platinum per shift, while Newman’s output is 220 ounces, Vey told reporters.

The AMCU on Feb. 25 signed an agreement aimed at creating peace and stability in the country’s mining industry, four days after the NUM endorsed the plan. The signing took place at the fourth meeting called by Resources Minister Susan Shabangu since clashes between members of the labor groups at an Anglo American Platinum Ltd. (AMS) mine last month injured at least 12.

“Lonmin is committed to upholding the principles of the Peace Accord, and has therefore engaged the employees who are currently calling for the removal of the NUM and has also informed the Department of Mineral Resources and Department of Labour respectively about the situation,” the company said in an e-mailed statement.

Today’s strike coincides with a media tour to the operations.

“Workers used the press visit as an opportunity and they’ve been heard,” Vey said.

The stoppage should be short-lived, Citigroup Inc. said in an e-mailed note.

“Lonmin has put that ‘annus horribilis’ behind it and we further believe that the market has not given Lonmin enough credit for two years of operational improvements quietly going on behind the turmoil,” Citigroup said.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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