EFFORTS to resume production at two shafts at Lonmin’s Marikana mine ended in disappointment for the platinum miner which said its revenue loss following community disruptions now stood at R56m.
“The company has lost approximately 5,830 platinum ounces in production, amounting to approximately R56m, in the past 10 days since the protest began on May 2,” said Lonmin in a statement on Sunday.
The protests relate to demands by the Bapo ba Mogale community for the creation of 1,000 permanent jobs and 500 cadet placements at Lonmin for community members.
The company’s E2 and E3 shafts have been affected by violence and intimidation. Last week a bus was burned which was used in an R800m transportation contract which had been awarded to the Bapo ba Mogale.
Lonmin said it had met with representatives of the Bapo ba Mogale Traditional Council and the Unemployed Youth grouping on May 11 in which it was agreed the council would appeal to protestors to stop and work with Lonmin on a process of engagement.
However, the community performed an about turn and said it would not sign an agreement until its demands for jobs had been met. It also demanded Lonmin have an interdict against protesters lifted – a request Lonmin declined to meet.
“This is because the safety and security of employees and community members, is of the utmost importance; and because it must protect the assets of the company, the community and the public,” said Lonmin.
“Lonmin had intended re-opening its E2 and E3 shaft operations today. However, the company has decided to keep the operations closed until it is satisfied that it is safe for employees to return to work at these two shafts,” it said.
The interruption to production comes at a bad time for Lonmin which has been struggling to become cash flow positive amid a sluggish dollar platinum price.
The company is due to report its interim operating and financial numbers on May 15. Focus is bound to fall on whether fresh restructuring has started to yield dividends.
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.
