Shares rise on the news that Lonmin has agreed a three-year wage deal with mineworkers

Oliver Gill
Follow Oliver
The latest round negotiations with Lonmin were concluded today (Source: Getty)

Platinum miner Lonmin has agreed a new three-year deal with workers and unions over wages and working conditions.

The agreement, which runs retrospectively from 1 July, "will provide employees with a realistic and competitive settlement and ensures the continued sustainability of Lonmin," the company said.

Shares in the company lifted around one per cent following the announcement this lunchtime.

31 October 2016 @ 1:00pmLonmin (LMI)

"We are delighted to have achieved a multi-year agreement. We have all worked hard to engage each other honestly and respectfully since the long strike of 2014 and this agreement illustrates the emerging maturity of the relationship between the Company, employees and their union representatives, said Lonmin chief exec Ben Magara.

Read more: Platinum miner Lonmin falls as it flags political headwinds

The deal is another important step on the road to recovery for the London-listed company, whose operations have been blighted by financial distress and industrial disputes at its South African mines over recent years.

In 2012, thousands of Lonmin workers went on strike at its Marikana mine after the company was reported to have declined to meet with them to discuss pay and conditions.

After violent skirmishes, South African police were brought in to break up the occupation of certain areas by striking workers. Shots were fired and 34 miners were killed in action widely reported as the "Marikana Masscare".

The longest sustained industrial action occurred between January and June 2014. The strike ended when Lonmin agreed to a minimum wage that included annual increases over the following three years, with a commitment to agree a new structure in 2016.

Today's announcement is part of such a commitment and sources close to the company told City A.M. that the latest round of negotiations had gone "much more smoothly".

Read more: Lonmin shines as cost-cutting strategy shrinks losses

Magara added: "Testament to this level of maturity is the reorganisation process that took place last year which lowered our costs and took place without any labour disruption or work stoppages as well as the current wage negotiation process which has been concluded amicably."

Related articles