Tags: safrica | mines | strikes | end

Lonmin Strikes at South African Shafts Over Union Rivalry End

Wednesday, 06 Mar 2013 05:12 AM


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JOHANNESBURG — Miners at Lonmin Plc, the third-largest platinum producer, returned to work at two shafts in South Africa Wednesday after Tuesday halting output and demanding that a union close its local office in a labor dispute.

More than 5,800 workers had refused to go underground until the National Union of Mineworkers (NUM) closed its representative office, the company said.

The NUM is jostling for supremacy with the Association of Mineworkers and Construction Union, which now accounts for about 51 percent of membership at Lonmin, according to Executive Vice President for Processing Natascha Viljoen.

“We learned early this morning that everything is back to normal,” Cecilia de Almeida, a director at Brunswick Group, which does media relations for Lonmin, said in an e-mailed response to questions.

Worker tensions at Lonmin’s mines, which erupted into clashes last year, have resurfaced as labor groups seek to boost their membership. Union rivalry contributed to 10 days of violence at the company’s Marikana operations near Rustenburg in August, which resulted in 44 deaths.

The AMCU is awaiting an agreement to recognize its majority, according to Viljoen. Rock-drill operators who sought to negotiate directly with the company last year, independently from the NUM, were unable to do so because labor agreements didn’t allow it, she said.

Tension Risk

“There is a risk that tension could build up and bring things to a standstill,” Viljoen said, citing the AMCU’s insistence on having majority union power.

No incidents of violence were reported as Lonmin’s Newman and Saffy shafts in Marikana were suspended, Executive Vice President for Mining Mark Munroe said Tuesday. Saffy produces 260 saleable ounces of platinum per shift, while Newman’s output is 220 ounces, Sue Vey, a company spokeswoman, told reporters.

Lonmin erased gains of as much as 3.9 percent in Johannesburg Wednesday and was 0.4 percent down at 45.30 rand by 10:53 a.m. The shares rose 0.1 percent to 331.90 pence in London.

“Lonmin has put that ‘annus horribilis’ behind it and we further believe that the market has not given Lonmin enough credit for two years of operational improvements quietly going on behind the turmoil,” Citigroup Inc. said in an emailed note Tuesday.

Spending Cuts

The platinum producer, 25 percent owned by Xstrata Plc, said in October it would cut spending and offer $817 million of stock to investors to meet pledges to creditors as it resumed operations after the strikes.

The NUM, which used to be the dominant union at the company’s operations, now represents about 30 percent of workers, Viljoen said.

The AMCU on Feb. 25 signed an agreement aimed at creating peace and stability in the country’s mining industry, four days after the NUM endorsed the plan.

Other producers affected by union rivalry in South Africa’s mining industry include Anglo American Platinum Ltd., which reported clashes between members of labor groups at a mine last month.

The Johannesburg-based company, known as Amplats, shut a NUM office last week and no longer recognizes the union as the majority organization. The NUM accused the AMCU of intimidation.

“It’s part of their strategy that if they get the NUM offices to close, it won’t exist; that is their logic,” Lesiba Seshoka, spokesman for the NUM, said in a phone interview.

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