Lonmin Workers Killed as Police Disperse Strikers - Businessweek
Several protesters were killed and others injured as police said they fired on striking miners near Lonmin Plc (LMI)’s Marikana platinum mine in South Africa yesterday in response to an attack.
Twelve bodies were seen by a reporter from Johannesburg’s eNews television channel, the station reported, while the South African Press Association said 18 people were dead or injured. Police spokesman Dennis Adriao said in an interview a press conference will be held at the mine at 11:30 a.m. local time tomorrow and declined to comment further.
“The South African Police Service was viciously attacked by the group using a variety of weapons including firearms,” the police said in an e-mailed statement today. “The police, in order to protect their own lives and self-defense, were forced to engage the group with force.”
A six-day work stoppage at Lonmin’s Marikana operations in South Africa’s North West province had already led to deaths of 10 people before yesterday’s clash as the company blamed the violence on fighting between members of the dominant National Union of Mineworkers and the Association of Mineworkers and Construction Union, which is seeking to recruit members.
“It’s a national tragedy,” said Dianne Kohler Barnard, a spokeswoman on police matters for the opposition Democratic Alliance party in a phone interview. “An independent inquiry must take place.” Impala Violence
Earlier this year fighting between the unionists at Impala Platinum Holdings Ltd. (IMP)’s operation close to Marikana led to the closure of the world’s biggest platinum mine for six weeks and four people were killed.
The violence at Marikana, located about 100 kilometers (62 miles) west of the capital, Pretoria, is a “public order rather than a labor relations associated matter,” Lonmin Chairman Roger Phillimore said in an e-mailed statement. South African Minister of Minerals and Energy Susan Shabangu is awaiting a report on the violence at Lonmin and is “in liaison” with police minister Nathi Mthethwa, her spokeswoman Zingaphi Jakuja said. Gun Battle
“At this point it is still very difficult to know how many people have died,” Lesiba Seshoka, a spokesman for the NUM, said by telephone from Johannesburg. “What we know for a fact is that since yesterday those guys got given several warnings from the police to move away.”
Footage showed that police were fired on by the strikers.
“President Jacob Zuma is alarmed and saddened at the manner in which a dispute at the industrial level at the Lonmin mine in Rustenburg has degenerated,” the office of the South African leader said in an e-mailed statement. “We are shocked and dismayed by this senseless violence.”
Police “massacred” the workers who had been camped on a rocky outcrop at Lonmin’s Marikana mining complex, AMCU’s President Joseph Mathunjwa said by phone. Plunging Shares
“These things should be blamed squarely before management of Lonmin and the NUM,” he said.
The NUM’s Seshoka said AMCU is to blame for the violence. Abey Kgotle, a spokesman for Lonmin, declined to comment.
Lonmin slumped 6.8 percent yesterday to close at 648 pence in London trading, the lowest price since December 2008. The stock was the worst performer on the FTSE All-Share Mining Index. (FAMNG) The price of platinum surged 3.4 percent to $1,443.25 an ounce as of 9:03 p.m. in London.
Most Lonmin mines are running on essential services, with production disrupted by the work stoppage. Marikana produced 96 percent of the company’s platinum group metals in concentrate last year.
Lonmin, the world’s third-biggest platinum miner, has lost metals output equivalent to 15,000 ounces of platinum at Marikana since rock-drill operators downed tools on Aug. 10, the Johannesburg-based company said in a statement. The workers, many of whom have camped out near the site, have been issued with an ultimatum to return by tomorrow or face dismissal, it said. CEO Hospitalized
“It is unlikely that Lonmin will meet its full-year guidance of 750,000 saleable ounces of platinum,” the company said. “Unit costs will be negatively impacted as well, and as a result we expect the guidance of an 8.5 percent increase” in full-year costs to be exceeded.
Lonmin also issued a statement saying Chief Executive Officer Ian Farmer had been hospitalized with a “serious illness” and Phillimore will take charge of the executive committee.
Platinum producers in South Africa, which account for three-quarters of world output, are facing plunging profits and surging costs as demand for the metal weakens, raising the prospect of violating loan terms. Lonmin, which has two debt covenants due on Sept. 30, said last month it’s examining increasing borrowing as metal prices retreat.
“The company is in significant operational and financial difficulty,” Abhishek Shukla, an analyst at Societe Generale in Bangalore, said in an interview. “If metal prices stay where they are, they will miss both those covenants.”
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