Johannesburg, South Africa — 03 September 2012 – Talks to end the strike at the South African mining operations of world No. 3 platinum producer Lonmin resume today, in the wake of weekend funerals for over 30 of the workers killed by police.
Lonmin wants to restart production at mines idled for three weeks by labour strife which has spread from the platinum sector to bullion. Gold Fields said a quarter of its workforce has been on strike since Wednesday, reports Reuters.
The stakes are high for Lonmin, which has a shaky balance sheet and was battling to contain costs even before a wave of labour violence that killed 44 people, including 34 striking workers shot dead in a single confrontation by police.
The violence stemmed from a bloody turf war between the dominant National Union of Mineworkers (NUM) and the small but militant Association of Mineworkers and Construction Union (AMCU) which has flared across the platinum belt.
Lonmin rock drill operators, who downed tools in an illegal strike on 10 August, are demanding a more than doubling of basic monthly pay to R12,500, but other workers may also be in dispute.
“At the moment it is not clear if these demands are restricted to rock drill operators, or if entry-level miners also want R12,500 a month,” said Solidarity trade union deputy secretary general Gideon du Plessis.
Solidarity represents skilled workers who have not been on strike. But all unions have been involved in the talks aimed at getting ore out of the ground again.
It was not clear who would take part in today’s talks. AMCU’s leaders, who claim they have been sidelined, say they will only show if they are invited.
Workers have sent their own delegates for negotiations and it is not always clear which union they are taking direction from, if any. The talks are supposed to get people back to work with a promise to then deal with grievances. There is also hope that a peace accord can be reached between warring factions.
Lonmin, which accounts for about 12% of global production of platinum, is racing against time.
It has said it will likely breach debt covenants by the end of this month, and may have to issue new shares to shore up a balance sheet hit by lost production and revenue. The company’s share price has fallen about 40% this year.
Investors, unnerved by the blood-letting in the platinum sector, have been shaken by the prospect of militant action spreading to country’s deep gold mines.
Source: Reuters Africa. For more information, click here.