Lonmin says 6,000 South Africa jobs at risk in proposed restructuring
Platinum producer Lonmin (LMI.L) said on Friday it was planning to close or mothball several mine shafts, putting 6,000 South African jobs at risk, because of depressed metal prices.
Platinum’s spot price XPT= is at 6-1/2 year lows less than $1,000 an ounce, while power and labour costs in South Africa have risen sharply.
“Lonmin is highly geared to platinum group metal prices. At current metal price levels, the company is EBITDA negative (loss making) and our cost minimisation plans are designed to improve this position as much as possible,” it said.
Lonmin said the planned closures would likely affect a total of 6,000 employees including contractors. In a letter to a labour union obtained by Reuters, the company had spoken of 4,500 jobs, about 15 percent of its workforce.
Job cuts are a thorny issue in South Africa, where the unemployment rate is over 25 percent and union militancy has been on the rise, especially in the mining industry.