Lonmin jobs under threat as low platinum prices weigh

Otmane El Rhazi from The Bullion Desk.

Platinum producer Lonmin is consulting with unions and employees to reduce costs, putting 3,300 positions under threat, the company said on Thursday.

The executive committee headcount has already been reduced by 22 percent, Lonmin added.

These reductions, which would result in around a 10 percent reduction in labour costs, are aimed at protecting the company and its employees against persistent low platinum prices, without the need to make forced retrenchments, the company said.

Platinum was last at $1,133 per ounce, down $10 on the previous day’s close. The metal had slumped under $1,100 in March, marking the lowest level since 2009.

“The mining industry is going through another challenging economic cycle and we need to make difficult decisions to maintain the resilience of our business and protect employment,” Ben Magara, Lonmins CEO, said.

“Our cost controls so far have been encouraging but the price of our metals is beyond our control and we need to make further savings, including seeking voluntary reductions in our labour force which represents around 60 percent of our total costs.”

“Nobody wants this, but we all have to protect the future of the business for as many employees as possible. I hope that we can do this together, for the benefit of the majority. Better times are ahead, but we need to get from here to there,” he added.

(Editing by Tom Jennemann)

 

 

 

 

 

 

 

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