Mine unrest hits Lonmin platinum production

Lonmin, the world’s third-largest platinum producer, is hoping to resume ore extraction at its Marikana site, though there is no guarantee striking workers will return to work after a period of mourning for colleagues killed in a wave of unrest.

The group’s South African operations have been paralysed since an illegal strike involving 3,000 rock driller operators started two weeks ago and exploded into violent clashes that killed 44 people, including 34 striking workers shot by police.

Lonmin accounts for about 12 per cent of global platinum output and the freezing of its mining operations has driven the price of the metal up by around 10 per cent.

The company said more than half of its 28,000-strong workforce showed up for shifts on Saturday – more than last week but well short of the numbers needed to start pulling ore from the earth.

It said: “Clearly, achieving normality will be a long journey given the terrible events of the last two weeks, but without a return to work that journey cannot start.”

Striking workers have been demanding a monthly wage of 12,500 rand (£942). The company said they get a guaranteed wage of almost 10,000 rand, with an average bonus of 1,500 rand.

The violence at Marikana stems from a turf war between the dominant National Union of Mineworkers and the smaller Association of Mineworkers and Construction Union.

Lonmin’s acting chief executive, Simon Scott, said the company was hoping a “peace accord” mediated by the department of labour could be reached between the warring sides.

The company backed down from a threat to sack the 3,000 striking workers last week as the country marked a period of mourning for those killed in the violence.

Lonmin has also said it may issue new shares to shore up a balance sheet hit by lost production and revenue.