Lonmin mine disruption continues

 

The South African mine at the centre of the violence that saw 34 people gunned down resumed production today after nearly a third of its staff returned to work.

Lonmin had ordered 3,000 illegally striking rock drill operators to return to work or risk losing their jobs at its Marikana mine, and appealed to a further 25,000 staff and 10,000 contractors to report for duty after police said it was safe.

At first only 27% of its 28,000 workforce turned up after being put off by the fear of more violence but as more staff joined the shift the group was able to restart production, albeit on a significantly reduced scale.

Shares fell a further 4% today on top of the 15% falls last week after 34 miners were shot by police in one of the worst displays of state violence since apartheid ended in 1994.

Mark Munroe, Lonmin's executive vice-president for mining, said: "What has happened here has been a tragedy, and the pain and anger it has led to will take time to heal.

"But those representing the vast majority of our workforce have been clear again in our discussions today that we need to try to return to some kind of normality as we go through that healing process."

Lonmin said the illegal strikers who failed to return to work today will not be dismissed as it had previously threatened, but will be given an extra day to return.

Mr Munroe added: "Tens of thousands of people's livelihoods rely on Lonmin, as well as much of the local infrastructure we provide in terms of health, water, education and housing.

"We have visited many of the injured in hospital, and met the families of the deceased.

"Nothing makes up for their loss but we are providing all the support we can, both emotionally and practically, to help them cope, and I'm proud of the work our teams are doing there."

To add to Lonmin's woes, Deutsche Bank downgraded the stock from "hold" to "sell" following reports it is considering a billion dollar (£640 million) emergency fundraising move.

It estimates that Lonmin will lose at least 50,000 ounces of production as a result of the crisis and now says it will make a loss this year, having previously expected a small profit.

Lonmin dismissed reports that it will need to raise funds as "speculation", yet fears remain that it may be forced to make some form of cash-call to shareholders as the closure of its biggest mine in South Africa puts a significant strain on its income.

The closure of the Marikana platinum mine is understood to be a significant hit to Lonmin as it accounts for around 90% of the group's output.

Lonmin is also believed to be asking for leniency from its banks as it struggles with debts.

The mining giant was already under pressure before the closure after platinum prices slumped in the past year as demand for the metal has dropped from car-makers in the crisis-hit eurozone.

Its plight has also been compounded in the past week by news that chief executive Ian Farmer has been admitted to hospital with a "serious illness" and will be temporarily replaced by chairman Roger Phillimore.

Shares have now nearly halved in the past year.

Lonmin is also approaching its end of financial year, which will trigger compliance tests with its banks.

The group said last week that it "continues to monitor the position closely regarding the additional pressure which the current disruption to production may put on its bank debt covenants when they are next tested on 30 September".

PA

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links