Resurgent Lonmin sets out brave new world

[miningmx.com] – LONMIN is considering an employee share option scheme (ESOP) and is investigating more frequent leave for migrant labour as the firm seeks to recover from the social and financial effects of last year’s Marikana massacre in which 45 miners were killed on its premises.

Reporting first quarter production figures, the company said it had also de-recognised the National Union of Mineworkers as the majority union on its mines and would replace a single union recognition system with an inclusive approach in which all unions could participate.

The platinum producer was also discussing a centralised bargaining forum for wage negotiations and was thinking of ways to ameliorate a situation in which workers with living out allowances preferred to live in informal settlements.

Predictably, however, the attention fell first on the group’s production figures which came in ahead of some analysts’ expectations.

First quarter platinum in concentrate sales totalled 185,497 ounces while sales were 108,342 oz – a strong performance the company said it was on target to repeat in the second quarter. As a result, Lonmin said it remained confident of hitting a full-year platinum sales target of 660,000 oz.

The market liked what it saw. Shares in Lonmin gained 12% on Thursday (January 31) and were another 5.8% higher today.

Lonmin announced previously that it had used some $800m raised in a rights issue last year to pay down debt. From a balance sheet perspective, the company was on a firm footing again.

It added that it continued to seek a permanent CEO. Incumbent, Simon Scott, is not interested in retaining the job on a full-time basis.