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Lonmin says over 5,000 workers leave after restructuring

JOHANNESBURG (Reuters) - South African-focused platinum producer Lonmin LMI.LLONJ.J said on Thursday it had trimmed its workforce by more than 5,000 in a restructuring triggered by depressed prices.

Workers leave Lonmin's Karee mine at the end of their shift, outside Rustenburg, northwest of Johannesburg July 29, 2015. REUTERS/Siphiwe Sibeko

There has been some confusion over the process after the Association of Mineworkers and Construction Union (AMCU) said on Wednesday that only around 75 Lonmin jobs would be lost.

Lonmin said most of the workers had left on a voluntary basis. This would have smoothed the process with AMCU, which has led violent strikes at the platinum producer in the past, including a wildcat action in 2012 that led to the police killing of 34 miners at Lonmin’s Marikana mine.

The company’s share price in Johannesburg was more than 20 percent higher and almost 16 percent higher in London as clarity around the restructuring emerged, but momentum indicators tracked by analysts indicated the share was now deeply overbought and so its gains may be capped.

“Investors are viewing the streamlining of its business as a good step. It’s also benefiting from a general rebound in the mining sector and in platinum prices,” said Richard Griffiths, associate director at London-based Berkeley Futures.

Lonmin spokeswoman Sue Vey said: “In total 5,108 have left the organisation – they took voluntary severance packages, early retirements or have resigned of their own accord.”

“Another 75 are being retrenched this week as they were not willing to accept the alternative options open to them – therefore a total of 5,183 people will have left Lonmin by 4 March. Initially we thought we would have to lose 6,000 people.”

She added that 1,388 employees had been re-skilled and redeployed elsewhere at Lonmin.

Job losses are a thorny issue in South Africa, where the unemployment rate is around 25 percent and income disparities remain glaring two decades after the end of apartheid rule.

AMCU’s arch rival, the National Union of Mineworkers (NUM), said on Monday that more than 36,000 jobs could be lost in the embattled industry over the next three months, around 7 percent of the roughly 500,000-strong labour force.

Reporting by Ed Stoddard in Johannesburg and Sudip Kar-Gupta in London; Editing by James Macharia

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