JOHANNESBURG/LONDON, May 19 (Reuters) – South African platinum miner Lonmin has lost a third of its annual production due to an industry strike over wages which its chief executive described as a “bleeding” that might lead to the company’s death if not stopped in time.
South Africa’s longest and costliest mining strike turned violent this month, with four miners killed as more employees tried to report for work at the world’s top platinum producers.
Lonmin had anticipated a mass return of its employees to work last week, but striking members of the main Association of Mineworkers and Construction Union (AMCU) prevented many other workers from going back to the mines.
The strike has also hit the South African operations of Anglo American Platinum and Impala Platinum, taking out 40 percent of global production of the precious metal used for emissions-capping catalytic converters in automobiles.
“The strike has now entered its 17th week and we have now lost a third of our production for the whole year,” Lonmin chief executive Ben Magara said on Monday during a briefing with journalists in Johannesburg.
“The company has been bleeding and there will come a point when that bleeding means death,” he later said in an interview with Reuters TV.
According to Reuters’ calculations the strike has cut around 900,000 ounces of industry production to date. In Lonmin’s case, it had been targeting year sales of over 750,000 ounces before the strike began, so it has lost around 250,000 ounces so far.
Last week Lonmin said it might go to court in a bid to stop the strike because of its increasingly violent nature and Magara said: “We’ll examine all our legal options in this regard.”
Magara added there was now a “more visible” police presence around its operations.
Talks with AMCU collapsed in late April and the companies have been taking their latest offer directly to employees via SMS text messages and other means.
AMCU is trying to prevent them from doing this and the matter will be heard in the country’s labour court on Tuesday.
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