‘There’s little govt, unions can do to help Lonmin’

The company has been hit by low platinum prices and strikes at its Rustenburg operations.

FILE: The company has been hit by low platinum prices and strikes at its Rustenburg operations. Picture: Govan Whittles/EWN.

JOHANNESBURG - As the Lonmin platinum mining company says it needs more investment to survive, analysts say there's very little government or unions can do to try and help the company.

Lonmin has asked investors for more money and warned that if it can't raise the necessary capital through a share issue, it may have to cease trading altogether.

The company has been hit by low platinum prices and strikes at its Rustenburg operations.

Creative Voodoo Consulting's Mamokgethi Molopyane says Lonmin is in an impossible situation.

"[After] the five-month strike that we saw in the platinum sector, what the buyers or consumers made clear was that we can survive without new platinum."

Meanwhile, concerns have been raised over how long Lonmin will be able to last as it considers all options to save the company including massive pay and job cuts.

Mining analyst Peter Major says workers have been lied to.

"They've been lied to by saying they've been under-paid, when they said the mines can afford much more. And they are owed; they have legacy issues. Who owes anybody a job on this planet? A job used to be a privilege like going to college."

He says every cost cutting strategy must be considered and government and unions cannot let the mine run into the ground.

"I'm not saying pay cuts are the answer, but everything has to be considered and everybody has to throw everything on the table, including government, unions, workers and management. Otherwise shareholders don't trust them."