World no 3 platinum producer Lonmin is racing to resume ore extraction at its Marikana site, with no guarantee striking workers will return this week after a mourning period for comrades killed in a wave of labour unrest.
Lonmin’s South African operations have been paralysed since an illegal strike involving 3,000 rock driller operators started two weeks ago and exploded into violent clashes that killed 44 people, including 34 striking workers gunned down by police. Lonmin accounts for about 12 per cent of global platinum output and the freezing of its mining operations has driven the price of the metal up by around 10 per cent.
The company said more than half of its 28,000-strong workforce showed up for shifts on Saturday — more than last week but far short of the numbers needed to start pulling ore from the earth.
“Mining operations will only resume once we have sufficient workers in attendance and the necessary safety procedures have been undertaken,” Lonmin said on Friday.
It was not clear when they would get those numbers. Some workers have signaled the “martyrdom” of their colleagues raised the stakes and it would be a betrayal if miners returned unless they won the wage increases that they have demanded.
The striking workers have been demanding a monthly wage of 12,500 rand ($1,500). The company says they get about 9,800 rand with an average monthly bonus of 1,500 rand.
The government said at the weekend the world’s largest platinum producers were discussing a move to collective bargaining.
The platinum sector negotiates with unions on a company-by-company basis, leaving individual firms open to labour discontent as rival organisations promise workers better deals.
This has created wage disparities between platinum companies that do not exist in the gold and coal sectors, which bargain collectively.
The violence at Lonmin stems from a bloody turf war between the dominant National Union of Mineworkers (AMCU) and the small but militant Association of Mineworkers and Construction Union (AMCU) which has been spreading through the sector.
Lonmin’s acting chief executive Simon Scott said the company was hoping a “peace accord” mediated by the department of labour could be reached between the warring sides.
“We are dealing with tragic and challenging issues, and will be for a long time to come, but for the sake of the company, its many thousands of employees and the industry which supports them, we need to find a sustainable peace accord which allows people to return to a working business,” Scott said.
Lonmin last week backed down from a threat to sack the 3,000 striking workers as the country marked a period of mourning for those killed in the violence.
Lonmin has also said it may issue new shares to shore up a balance sheet hit by the lost production and revenue. Its situation will become tougher the longer its mines are idle.
Analysts have speculated the company may try to raise new capital from shareholders as existing agreements with lenders require it to keep a lid on its debt-to-profit ratios. The company said those ratios would likely be breached by September 30.
Lonmin had already slashed spending plans before the latest flare-up of violence and may miss its annual production target of 750,000 ounces.