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In light of weakening platinum prices, Mining Weekly reported that South Africa’s Lonmin is planning to close down and idle some of its higher cost operations. The change will reduce the company’s production by as much as 20 percent, impacting 6000 employees.
In light of weakening platinum prices, Mining Weekly reported that South Africa’s Lonmin is planning to close down and idle some of its higher cost operations. The change will reduce the company’s production by as much as 20 percent, impacting 6000 employees.
As quoted in the publication:
Unpacking the company’s third-quarter performance and providing a business update for shareholders, Magara said formal Section 189 consultation processes with trade unions had started this week as the third-largest platinum producer planned to close and idle some of its lossmaking shafts to reduce high-cost production in an oversupplied market.
The planned closure of the Hossy and Newman shafts and the placement of the W1, E1 and 1B shaft on care and maintenance would cut Lonmin’s normalised yearly platinum output by some 100 000 oz over the next two financial years.
The newly initiated consultation process would consider redeployment, reskilling, alternative working arrangements and further cost reduction opportunities before touching on the last-resort forced retrenchments for the 6 000 employees and contractors that are expected to be impacted.
Around 1 355 of these hard-hit workers had already accepted the voluntary separation packages (VSPs) offered by Lonmin in May, saving the company around R325-million a year upon their exit at the end of July.