The concentrator
plant at Lonmin’s
Marikana mine
Johannesburg, South Africa — 16 August 2012 – Thousands of striking miners armed with machetes and sticks faced off with South African police at Lonmin’s Marikana mine yesterday, after the company halted production following the deaths of 10 people in fighting between rival unions.

Reuters reports that Lonmin, the world’s third-largest platinum producer, has threatened to sack 3,000 rock drill operators if they fail to end a wildcat pay strike that started on Friday at Marikana, its flagship mine 100 km north-west of Johannesburg.

The illegal stay-away and the union clashes have forced London-headquartered Lonmin to halt mining at all its operations in South Africa, which account for 12% of global platinum output. South Africa has 80% of known platinum reserves.

Yesterday, sscores of police backed by helicopters lined up opposite a crowd of around 2,500 miners who had taken up position on a rocky outcrop overlooking the mine. “The situation is stable but tense. We are busy with negotiations and are maintaining a high visibility in the area,” national police spokesman Dennis Adrio said.

Lonmin secured a court order compelling the miners to return to work yesterday, and can fire them if they fail to do so. “If we believe that this criminal activity is still continuing and that rock drill operators are still on this illegal strike we will have no option but to issue the ultimatum,” executive vice president Barnard Mokwena said.

The strikers have not made their demands explicit, although much of the bad blood stems from a turf war stretching across the platinum industry between the dominant National Union of Mineworkers (NUM) and the newer Association of Mineworkers and Construction Union (AMCU).

The price of platinum rose 2% on Tuesday as a result of the suspension in mining. Lonmin shares were down 1% in London and 0.7% in Johannesburg yesterday, after falling more than 4% the previous day.

Already struggling with low prices and weak demand, Lonmin may miss its annual production target of 750,000oz because the quarter to the end of September is typically its best.

The Marikana violence was the deadliest yet in an eight-month tussle between NUM and AMCU.

At least three people were killed in a similar round of fighting in January that led to a six-week closure of the world’s largest platinum mine, run by Impala Platinum. That helped push the platinum price up 15%.

Source: Reuters Africa. For more information, click here.