INUM miner Lonmin yesterday said that the militant Association of Mineworkers and Construction Union (AMCU) now controls 70 per cent of its South African workforce, after poaching discontented members from the National Union of Mineworkers (NUM).
Lonmin said it was working to finalise an agreement with AMCU, the NUM and other smaller unions to get wage talks off the ground.
A turf war between AMCU and NUM triggered wildcat strikes and violence last year that killed around 50 people in the mining sector.
“Although the 70 per cent figure is a bit higher than expected, it has been clear for some time that AMCU is the key union,” Alison Turner, analyst at Panmure Gordon, told City A.M.
“Negotiations between the unions is always going to be a challenge but AMCU is being constructive and going down a mediation route, which is positive.
“However, nothing has been resolved and it could take months, so there will be no immediate impact on the company.”
The strikes at Marikana, which started in August 2012, led to a six-week shut down and caused Lonmin to lose 110,000 ounces of production.
The FTSE 250 miner has also been plagued by operational problems. Its shares plunged more than seven per cent on 1 May, after the company announced that a furnace would be shut down after an incident.
Lonmin has a history of problems with its smelters and the news came at a time when another furnace was down for a planned upgrade.