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Lonmin denies rumoured job cuts

According to a report, the platinum producers aims to cut around 5,700 jobs.

FILE: Striking platinum miners gather at the Wonderkop Stadium in Marikana waiting to receive news on an ending strike proposed deal on 12 June, 2014 in Marikana, South Africa. Picture: AFP.

JOHANNESBURG - Lonmin has denied plans to cut jobs despite Reuters reporting that 5,700 positions at the company are now on the line.

The news agency is reporting that the platinum producer aims to cut around 21 percent of its workforce.

There are concerns of further labour unrest in the fragile mining sector amid the reports that Lonmin could close up to half of its mine shafts.

In June, the company warned that "restructuring had become inevitable" in the wake of the Association of Mineworkers and Construction Union (Amcu)'s five-month long strike.

Amcu warned of consequences should the platinum giant resort to job losses.

Mining analyst Peter Major says restructuring is Lonmin's best chance of returning to healthy profit margins.

"Unfortunately, Lonmin's had gangrene now for probably close to three years and they just have to do something to survive. A mine is like any living organism - its main duty and main focus is to survive at almost all costs because once you close a mine, it's almost impossible to open it up again."

Lonmin spokeswoman Sue Vey said in response to questions from Reuters that she had "no knowledge" of the plan.

Lonmin raised $800 million to shore up its balance sheet in 2012 after it was hammered by a violent wildcat strike that killed dozens of people, but analysts say the company would struggle to get more funds from shareholders so soon.

Amcu's 2014 strike, the longest and costliest in South African history, also affected Lonmin's bigger rivals Anglo American Platinum and Impala Platinum.

Amplats has since said it plans to sell or spin off a number of the mines that were shut during the 2014 strike. Implats is expected to update the market on potential restructuring when it reports full-year earnings on Thursday.

Additional reporting by Reuters.

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