By Sherilee Lakmidas and John Mkhize
The world’s no. 3 platinum producer Lonmin shut down its South African operations on Tuesday (14/08/2012) and its shares tumbled after violence caused by a feud between rival unions killed nine people at its main mine.
Two policemen and two security guards were among those killed in the clashes from Friday through to Monday.
It was the deadliest violence so far in a union membership turf war between South Africa’s dominant National Union of Mineworkers (NUM) and the relatively new Association of Mineworkers and Construction Union (AMCU).
Executives at Lonmin said all its shafts across the South African platinum belt were closed down with only essential services such as ventilation operating.
"Until the place is safe we don’t want to talk about production,” Lonmin Executive Vice President Barnard Mokwena told a press briefing at Marikani.
Lonmin shares dropped almost 5 percent in London and 4 percent in Johannesburg on Tuesday.
Hundreds of police officers, including horseback-mounted units and backed by armoured vehicles, descended on Lonmin’s Marikana facility, about 100 km (60 miles) northwest of Johannesburg, to prevent any repeat of the violence.
Police helicopters clattered overhead as officers set up control checkpoints and laid down barbed wire. In a nearby township, a group of men, apparently mineworkers, gathered on Tuesday carrying sticks and bars.
The platinum sector is grappling with declining world prices for the precious metal and a surge in union militancy in South Africa, home to 80 percent of known reserves.
Complaints that the NUM, which remains a buttress of political and electoral support for the ruling African National Congress, is not defending the interests of its rank and file have put the longstanding labour grouping under siege.
Aggressive new unions have been poaching NUM members in often violent turf wars. Lonmin executives said AMCU now had 21 percent of the company’s 28,000-strong South African workforce as members.
MACHETE ATTACK
The latest violence began on Friday during an illegal strike held by 3,000 rock drill operators at Lonmin’s Western Platinum mine. AMCU members clashed with NUM members, and police and security guards attempting to restore order were caught up in the violence.
Police told Reuters two policemen died after a machete attack by a mob near the mine. Another officer was badly injured and police in turn shot dead three protesters.
Two security guards were hacked to death on Sunday, while the NUM said one of its members was killed while trying to report for duty. Lonmin said a fourth employee had been found dead with several gunshot wounds.
Company officials did not say exactly how much production had been lost as a result of the latest unrest.
The shutdown makes it likely that Lonmin will fall short of its target of 750,000 ounces of platinum this year.
"Production has been severely disrupted since Friday 10 August as a result of an illegal strike by rock drill operators and increased incidences of violence and intimidation since then,” the company said in a statement.
At least three people were killed in a similar round of labour violence in January that led to a six-week closure of the world’s largest platinum mine, run by Impala Platinum.
The violence at Lonmin’s Marikana mine echoed previous incidents in which AMCU has tried to recruit NUM members.
Accused by detractors of using strongarm tactics that have led to clashes and deaths, AMCU has been taking on the NUM in townships and mines. AMCU denies these allegations but says NUM is no longer effectively representing the interests of miners.
The AMCU/NUM rivalry, which has already caused friction at Lonmin’s Karee mine, has now spread to other shafts at a time when the company is cutting back on investment plans in the face of weak demand and shrinking margins.
The challenge to the dominance of the 300,000-strong NUM also has political ramifications given its role as a support base for the ruling African National Congress. - Reuters
