AMCU argues PGM markets strong enough to keep Lonmin in business

THE Association of Mineworkers & Construction Union (AMCU) called on the Competition Tribunal to prohibit the merger of Lonmin with Sibanye-Stillwater because some 10,000 jobs are due to be cut ahead of the transaction, said Bloomberg News.

The union argued on November 12 that the markets for platinum group metals had improved lately, whilst the weakness of the rand against the dollar had also improved the fortunes of Lonmin such that it could operate profitably without job cuts.

AMCU said that Lonmin’s $200m metals-purchase agreement with Pangaea Investments Management Ltd. improved the company’s liquidity, and that Lonmin is “… in no danger of exiting the market in the immediate future”.

Bloomberg News cited Lonmin CFO, Barrie van der Merwe, as saying however that Lonmin would need $450m to $500m in order to continue operating with its current staffing – an amount of capital that could not be raised by the market.

South Africa’s Competition Commission has recommended the acquisition, clearing a key hurdle for the deal, on condition that Sibanye tries to save about 3,700 jobs if prices improve and the company can maintain production costs at some shafts, said Bloomberg News. The tribunal is expected to give its final ruling on the matter once public submissions are concluded, it said.