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Mining strike turns deadly

Monday, May 12, 2014 - 02:18

May 12 - South Africa's National Union of Mineworkers says two of its members are killed as they report for work at Lonmin's strike-hit platinum mine, threatening the firm's plans to end the industrial action this week. As Hayley Platt reports Lonmin is reportedly losing £1.8m a day due to the strike.

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Platinum workers have been on strike in South Africa for more than 4 months. The dispute has cost Lonmin an estimated $3 million a day in lost revenue. The firm had planned to end the walkout this week by bypassing the unions and directly offering workers a 10% wage increase. But two employees were killed reporting for duty on Monday. And Robert Besseling from IHS says the deaths will have an big impact. SOUNDBITE: Dr. Robert Besseling, IHS, saying (English): "This certainly will dent the company's hopes that non-striking workers will be able to return to work. Certainly intimidation does still seem to be ongoing and that will hamper some of the companies plans to regain production." It's the longest and costliest industrial action the industry has ever known. And Lonmin, the world's third-biggest platinum miner has been hit particularly hard. Earnings in the first half of the year before tax and interest were $34 million, down almost two thirds in the six months to the end of March. SOUNDBITE: Dr. Robert Besseling, IHS, saying (English): "The problem for this particular company is that they haven't diversified much into other platinum areas in the continent, so for example Anglo American platinum, Impala platinum have businesses in Zimbabwe where they have been mining platinum and they have been able balance some of the production losses which Lonmin has not been able to do." The impact of the strike has so far been cushioned by large stockpiles. And weak demand from Europe's car industry which uses platinum in catalitic converters. Bernard Dahdah from Natixis says that's kept prices relatively stable. SOUNDBITE: Bernard Dahdah, Natixis, saying (English): "If you look at Impala for instance, they've said that in the next two to three months they might have to cut their supply by 40 percent. AMPLATS is probably half way through its reserves so if you add them all together, probably by August, if the strike still continues into August then that's the point when we might see a lot of pressure." The main union involved, the AMCU, says most of its 70,000 striking members still aren't happy with the offer. And they'll be no winners even if the strike does end. All three companies involved say they'll be restructuring their business to compensate for the losses and higher wages.

Mining strike turns deadly

Monday, May 12, 2014 - 02:18

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