Job cuts warning if Lonmin workers cannot reach a settlement

Lonmin has warned striking workers at its Marikana platinum mine in South Africa that if it cannot reach a settlement with them they could face massive job cuts.

The London-based miner also slashed its output forecast for the year which ends this month, from 750,000 ounces to between 685,000 and 700,000 ounces. It said costs had risen by more than the 8.5 per cent it predicted earlier this year.

Simon Scott, the acting chief executive, said: "Our view is that negotiations are the best way to achieve a sustainable return to work. Clearly, however, there will be consequences to jobs if there is a continuing delay in returning to production.

"The situation is delicate, but we have limited options in terms of managing the trade-off between lost production, higher wages and business rationalisation, including a significant reduction in jobs."

By contrast, Anglo American Platinum, which suspended work last week because of threats to workers, planned to reopen its mines this morning, saying: "The situation in Rustenburg remains calm and our intention is to resume operations."