Report: Lonmin aims to cut 5,700 jobs
The plan would see the closure of four to six of the company's 11 shafts.
JOHANNESBURG - Platinum producer Lonmin aims to cut around 5,700 jobs, about 21 percent of its South African workforce, as part of a drive to restore profits after a five-month wage strike this year, sources familiar with the plan said.
The plan would see the closure of four to six of the company's 11 shafts, the two mining industry sources, one in London and the other in Johannesburg, told Reuters.
Lonmin spokeswoman Sue Vey said in response to questions from Reuters that she had "no knowledge" of the plan.
The company, the world's third-largest producer of the precious metal used for emissions-capping catalytic converters in automobiles, said in June that the strike and low prices meant "restructuring of our business has become inevitable".
Mining analyst Peter Major says he's not surprised by reports of potential job cuts.
He says if the reports are true, the move by Lonmin is for survival.
"The company has lost billions over the last few years in lost production. They have had high staff turnover at management levels, a very erratic labour force, difficult union relations and the metal price isn't in their favour. They have really had so much go against them over the past few years."
Job cuts could trigger more labour unrest, including potential strikes by the hard-line Association of Mineworkers and Construction Union ( Amcu), whose members have downed tools in the past to protest against planned lay-offs.
"There will be six shafts closed and 5,700 jobs will go. That is the plan," the Johannesburg source, who declined to be identified, said. Lonmin has a staff of around 27,000.
The source did not disclose which shafts would go but said Lonmin had decided it "could no longer subsidise the loss-making shafts and had to focus on the profitable ones".
A key reason behind the restructuring is the wage settlement reached in June with Amcu to end the strike, which will see its members get pay increases of up to around 20 percent annually for the next three years.