Rustenburg - Lonmin has consulted unions over efforts to reduce costs, the company said on Friday.
“Both majority and minority unions were consulted in this process. This is not a Section 189 process but an offer of voluntary separation and early retirement – this specific process requires broad consultation with all stakeholders and more specifically a mandate from the majority union. This mandate was given by Amcu, (Association of Mineworkers and Construction Union), the majority union at Lonmin,” said company spokeswoman Sue Vey.
She was responding to the National Union of Mineworkers (NUM) that it had not not yet been officially consulted about the company’s plan to cut 3 500 jobs.
Lonmin announced on Thursday that it was consulting unions and employees over efforts to reduce costs.
“These reductions are aimed at protecting the company and its employees against persistent low Platinum Group Metal [PGM] prices,” the company said in a statement. “Lonmin hopes to be able to complete this process without needing to make forced retrenchments, which it regards as a last resort. This reduction should hopefully be achieved through a voluntary process.”
Chief Executive Officer, Ben Magara, said the mining industry was going through another challenging economic cycle and needed to make difficult decisions to maintain the resilience of its business and protect employment.
“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,” he said.
“These are tough conversations but I am encouraged by our employees’ appreciation of the situation. That is a reflection of the huge effort all parties have made to understand one another better in recent months and we are all seeing the benefit of that now,” said Magara.
“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.”
The company was expected to provided a further update on Monday, when it announces its interim results.
The NUM said it was extremely shocked to hear that Lonmin was planning to cut 3,500 workers.
“As the NUM, we are going to fight against any job losses. It is very painful to see that these mining companies make the decisions of cutting jobs easy,” said Erick Gcilitshana, NUM chief negotiator at Lonmin.
“The platinum sector had cut 35 000 jobs since 2012 and it is time to join forces to end this bloodbath.”
He said Lonmin had not yet officially consulted the NUM, to tell them of their plan.
“We wish that these job losses can be avoided and as the NUM we will do our best to engage the company to save jobs,” he said.
Lonmin was one of the three platinum producers affected by a five month-long strike by the Association of Mineworkers and Construction Union (Amcu) last year.
Lonmin’s announcement followed after Anglo American Platinum (Amplats) retrenched 474 workers at three of its mines in Rustenburg.
ANA