PLATINUM miner Lonmin yesterday announced that it had failed to reach a new union recognition agreement with the militant Association of Mineworkers and Construction Union (AMCU).
The FTSE 250-listed company and AMCU are meeting again today in an attempt to resolve the situation. If no agreement can be reached then the process will move to formal arbitration.
“This was not unexpected, so there has not really been much reaction in the share price,” Cailey Barker, analyst at Numis Securities, told City A.M.
“There is always a difficult patch in union negotiations where they seem to argue for a long time, but it rarely goes to the arbitration process.”
AMCU now controls 70 per cent of Lonmin’s South African workforce, after poaching discontented members from the National Union of Mineworkers (NUM).
Tensions between the two unions escalated last summer, resulting in violence which killed around 50 people in the mining industry.
Earlier this month, AMCU said that one of its organisers was shot dead as a result of the tensions, reigniting fears of widespread violence.