Pressure grows on Lonmin after Marikana massacre

 
Michael Bow
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LONMIN, the world’s third largest platinum miner, will today issue an ultimatum to 3,000 striking employees to restart production or face the sack as pressure mounts on the company’s finances following last week’s deadly clashes.

Wildcat strikes at its Karee mine – situated on the Western flank of its Marikana mining district – have caused ten days of lost production, hitting the firm’s share price and balance sheet as production grinds to a halt.

The situation descended into bloodshed on Thursday as clashes between members of the Association of Mineworkers and Construction Union and police cost the lives of 34 protesters.

Lonmin yesterday asked its non-striking employees, which number 25,000 – plus 10,000 contractors it employs – to report for work today across all four of its mining districts in a bid to resume production.

Chief financial officer Simon Scott said: “As the government has made clear, it is in the interests of our workers and the country, as well as the company, that the mines are operational.”

The ten days of lost production have caused the firm to scrap its full year guidance to mine 750,000 saleable ounces of platinum.

People with knowledge of the firm yesterday downplayed reports it would launch a $1bn (£634m) rights issue next month to boost its finances.

A source close to shareholder Xstrata, linked to the rights issue, also said there were no plans afoot.