Leading South African platinum miner Lonmin plc returned to an annual profit after sustained losses resulting from 2012’s deadly shootings by security forces responding to strikes at Marikana; officials voiced hope union talks would avoid disruption this year.
The Johannesburg-based company said this week that production and sales of the precious metal amid cost-cutting efforts would help the company exceed targets and forecasts by outside analysts. Including cost inflation a major wage-related issue, Lonmin officials anticipate a production increase of at least 8% this year, with cost, inflation, according to Reuters.
Last month, however, representatives of the leading platinum-belt Association of Mineworkers and Construction Union (AMCU) demanded a 50% wage hike for entry-level miners, raising the specter of new strikes. The increase, according to many analysts, however, is unsustainable, given poor platinum prices coupled and high costs.
In 2012, Lonmin was at the center of a six-week strike, during which 44 miners died, including 34 in a clash with police in South Africa’s bloodiest worker clashes since Apartheid’s end in 1994. Finances were so trashed that Lonmin, already one of the industry’s most cash-strapped businesses, was forced to seek cash from shareholders and struggled to resuscitate production.
In 2013, overall sales fell 1% to 696 000 oz., although they exceeded company forecasts of 660,000 oz. Costs rose 3.8% — though less than the 6% of South Africa’s monthly inflation rate.
