HomeNewsLonmin may cut workforce by 17%

Lonmin may cut workforce by 17%

One of some 4 000 Lonmin
workers who could be
affected by future
cost-saving measures
Cape Town, South Africa — MININGREVIEW.COM — 01 December 2008 – Lonmin plc – the world’s third-largest platinum producer – has revealed that it may cut as many as 5 400 jobs, which amounts to about 17% of its workforce, in response to the current economic climate and the plunge in platinum prices.

“At this very early stage it is estimated that up to 4 000 permanent Lonmin employees may be affected,” the London-based company said in a statement. About 1 400 contract workers may also be affected, Lonmin spokesperson Dani Cohen told Bloomberg News by telephone from Cape Town.

Last week, Lonmin said it would cut output, halt expansions and reduce jobs in South Africa and the U.K. Platinum has tumbled 42% this year as slowing world economic growth squeezed demand for the raw material used in auto-catalysts and jewelry.

“The South African mining industry is facing an enormous crisis and all possible avenues need to be explored to prevent retrenchments,” he added.

Kleynhans said the union was worried because various South African mining companies were contemplating job cuts in the face of sagging metal prices. “We are expecting notices of lay-offs from other companies. They are all going to go into a cost savings mode,” he said “The Lonmin notice is the first, but it won’t be the last one,” he added.

Meanwhile, South Africa’s National Union of Mineworkers (NUM) said more than 18 000 Lonmin workers would march to demand an end to job cuts. Lonmin employs 32 400 permanent and contract workers, according to Cohen.

Bloomberg quotes Solidarity as saying that Lonmin has offered a minimum severance of one week’s pay per year of service. Talks between the company and unions will be mediated by a government agency, it added.