[miningmx.com] — LONMIN could soon be faced with difficult decisions
about its future should employees not heed its call to return to work this week, a
situation deemed unlikely even by those parties committed to last week’s peace
accord.
The platinum producer said on Friday that it was expecting its workforce to return to
work on Monday.
Attendance across the group’s operations in the North West has continuously edged
lower since the massacre at Marikana on August 16, in which 34 miners were killed,
bringing the number of dead to 44 in violent attacks since some 3 000 rock-drill
operators embarked on an illegal strike over wages the week before.
The group reported a 2% average attendance on Friday.
Lonmin and three trade unions – the National Union of Mineworkers (NUM), Solidarity
and Uasa – on Wednesday signed a peace agreement whereby the unions have
committed to return to work tomorrow in return for a new round of negotiations with
the company over wages.
Those who have not signed the agreement were the Association of Mining and
Construction Union (Amcu), the favoured union of a majority of the striking rock-drill
operators, as well as independent worker committees.
Amcu president Joseph Mathunjwa said on Friday that the resolution of the strike
depended on an agreement by Lonmin’s management for a R12,500 basic salary.
“On the 16th of August (before the massacre), workers mandated us to go and ask
Lonmin to commit to the process on how to reach their demand of R12,500. No other
mandate was given to us by workers since then.’
Mathunjwa said Amcu didn’t sign the peace accord because the document didn’t
respond to the workers’ wage demand.
“The current situation needs Lonmin to put an offer on the table that will enable
parties to engage constructively and objectively in the process,’ he said, adding that
Amcu would have been required to sit on the sidelines of negotiations even if it did
support the peace accord.
NUM general secretary Frans Baleni said the union would encourage its members to
return to work on Monday, but said that turnout would be low should these workers be
intimidated by their striking peers.
“It’s a dilemma,’ Baleni said, adding there was not much more the unions and Lonmin
could do to stabilise the situation. “It will be up to Government to play a bigger role.’
Solidarity deputy general secretary Gideon du Plessis said that the union was
expecting increased levels of intimidation.
“We don’t expect a high turnout,’ he said, saying that the union was fearing for both
the safety of workers and the future viability of the mine. “This peace accord was the
last way out from anarchy. This situation is not going to sort itself out. Somewhere,
somebody will need to make a drastic decision.’
Meanwhile, Lonmin said it was losing about 2,500 ounces of platinum production per
day, implying a loss of some 70,000 ounces during the four weeks of the strike so far.
This was equal to about R800m in lost revenue. Lonmin has debt facilities totalling
$945m, of which it had utilised $520m as at March 31 – the last time it reported
financial figures.
The company earlier said the lack of income would result in it breaching some of the
conditions attached to the debt facilities and that it was renegotiating its position with
its consortium of banks – a situation made much more difficult in the absence of
meaningful production.
Should such negotiations fail, it might have to ask shareholders to pump new funds
into the company for an amount enough to cover the debt facility.
Lonmin spokesperson Sue Vey said that the company would not yet issue an
ultimatum to workers, although it was confident many workers would turn up.
“The current situation cannot carry on indefinitely. We’re going to have to make some
decisions based on financial realities at some point. We’re not at that point yet.’
According to Justin Froneman, an analyst at SBG Securities, there remained much
uncertainty in terms of the length of the strike and its impact on the company’s
earnings and balance sheet.
“If we don’t see some resolution next week, I think Lonmin will have to make some
tough decisions on some of its operations,’ he said.
