Lonmin mulls legal options to end strike

Suzie Neuwirth
LONMIN’S share price slumped by more than two per cent yesterday, after the South African platinum miner gave little reassurance that 17-week strikes would be resolved soon and confirmed that it has fired 235 essential service employees.

The platinum miner, along with its two larger peers, Ampala Platinum and Impala Platinum, have collectively lost 18.5bn rand (£1.1bn) in revenue, as workers, led by the dominant Association of Mineworkers and Construction Union (Amcu), have been on strike demanding higher pay.

Workers have lost 8.5bn rand in wages during the deadlock and Lonmin said it has lost one third of its production for the year.

The FTSE 100-quoted firm claims that most of its employees have expressed a desire to return to work, although it would not quantify the exact proportion.

But a number of those trying to return last week have been stabbed or burnt to death, amid reports of threats and intimidation, leaving Lonmin’s plans to resume production in jeopardy.

“This is a socio-economic tragedy on an unprecedented scale,” said chief executive Ben Magara.

Magara said that Lonmin would “assess all legal options” if it failed to reach an agreement with Amcu, but refused to clarify what this could involve. A court case would be of little use, as the striking workers are protected by South African law and cannot be fired.

But employees “engaged in essential services” were banned from partaking in any strike activity under an agreement between Lonmin and Amcu.

“Accordingly, some 235 essential services employees were dismissed on Friday afternoon,” a spokesperson for Lonmin confirmed yesterday.

“These are employees who have been absent since 23 January, so the recent intimidation does not explain their absence. A court order to this effect was obtained on 27 February requiring all essential services employees to return to work by 12 May. They have therefore been dismissed with effect from 13 May.”

Last week, Lonmin warned that job cuts and restructuring were inevitable, as it revealed a steep decline in half-year profit to $34m (£20.2m) from $93m a year ago.

Shares closed down 2.5 per cent.