LONMIN had lost about R40m in revenue following week-long community disruptions at its Marikana operation in which damage to property and intimidation of employees had been reported.
“Only our E2 and E3 sections have been affected and they have been closed for a week,” said Lonmin spokeswoman Wendy Tlou. “The situation is not as tense as yesterday (May 10) when a bus was burnt,” she added.
Lonmin’s E1 and E2 sections produced a combined 4,000 tonnes of ore a week. A total of 28,000 tonnes of ore had been lost owing to the protests which began by members of the Bapo ba Mogale community on May 2.
The UK-headquartered platinum mine was granted a court interdict on May 5 which it said was followed by “fruitful” discussions on May 9 at which community representatives had agreed to desist from protests such as barricading roads. The parties had also agreed to set down terms of engagement for the future.
However, unlawful protests kicked off again after a follow-up meeting in which the Bapo delegation submitted new demands for the creation of 1,000 permanent jobs and 500 cadet placements at Lonmin for community members.
Among the violence perpetrated at the mine’s premises is the destruction of a bus which was part of a fleet used in an R800m transportation contract provided to the Bapo community.
In 2014, Lonmin announced an empowerment deal with the Bapo ba Mogale community in which the company, through its Lonplats subsidiary, provided the Bapo ba Mogale Traditional Community with a R564m lump sum.
This was in return for the community’s annual royalties in Lonplats through which the Bapo subscribed for 13.13 million shares in Lonmin equal to 2.25% of its share capital. Of the lump sum, Lonmin has paid a R149m premium in return for which the Bapo will not encumber or sell its shares for 10 years.
As part of the equity deal, Lonplats also gave the Bapo opportunities to participate in procurement opportunities worth about R1.65bn over the next five years of which the bus transportation contract was one.
“These demands are not realistic in the current economic climate and cannot be acceded to without threatening the sustainability of the business,” said Lonmin in a statement.
“Lonmin has recently undergone a restructuring, in close consultation with its recognised union, and significantly reduced its workforce as a result. It simply cannot absorb additional employees at this stage,” it added.
Analysts raised concerns about the future sustainability of Lonmin earlier this year saying it had pulled every last lever in an effort to become profitable.
This was notwithstanding a restructuring in which 6,000 jobs – about 15% of its workforce – were shed last year, and hundreds of millions in rands cut in capital expenditure.
Ben Magara, CEO of Lonmin, is currently in London where he is preparing for the publication of the platinum firm’s interim results on May 15.
