Lonmin Delays 1,000 Job Cuts as Platinum Shafts to Remain Openby
Third-biggest producer has reduced jobs by more than 5,000
Platinum prices have dropped by 50% in past five years
Lonmin Plc said it will keep 1,000 contractors employed until at least September as the world’s third-biggest platinum producer delayed plans to shut some shafts that had been earmarked for closure in response to plunging prices.
Progress on its strategy to reduce the number of employees and contractors by 6,000 are in line with expectations, Johannesburg-based Lonmin said in a statement Thursday. About 5,000 people have left the company, which received a $396 million bailout from shareholders in December as it faced a deadline to refinance debt, it said.
The world’s largest platinum producers, including Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd., have been hit by a 50 percent slump in prices in the past five years. Lonmin’s plans to weather the rout include shutting unprofitable shafts which will reduce the company’s annual platinum output by about 100,000 ounces by 2017.
The short-term reduction in contractor headcount will be 1,000 less than previously reported after the producer agreed to keep two shafts operational until at least the end of the financial year, it said.
Lonmin’s mines continue to operate unprofitably while it implements the turnaround plan. Unit costs in the three months through December were 10,949 rand ($672) an ounce for a basket of platinum-group metals, above an average price of 10,859 rand, it said in the statement. Lonmin produced 171,411 ounces of refined platinum in the period and maintained its output forecast of about 700,000 ounces for the year.