It’s either wage hikes or job cuts, says Lonmin

2012-09-15 13:51

The demand for a R12 500 a month salary is unsustainable and will cause some workers to lose their jobs so that the remainder can earn that much, says Lonmin CEO Simon Scott.

The strike enters its sixth week tomorrow, with news that the parties are starting to move closer to an understanding.

Scott declined to speak on specifics of the negotiations, citing the sensitivities at this stage, but expressed optimism that a settlement could be reached soon.

“We are pleased to be sitting around the table and engaging in substantial issues. The process seems to be moving forward.

“We are focused on resolving the issues and we have come to understand them better, and we will be able to respond to them better. We are not contemplating a scenario where we don’t find a solution. The consequences are already so high,” said Scott.

“The longer the situation continues, the more it affects Lonmin, the South African economy and the workers. There is no deadline, but we are committed to the process and we have moved somewhat in the last week,” said Scott.

Speaking to City Press, Scott defended the salaries paid to miners, saying that they were in line with what the industry paid.

He said the salary and skills gaps between workers and top executives were also a function of structural problems in the South African economy.

“It is a South African issue, not a mining industry issue. It is something that needs to be addressed.”

Speculation in the mining industry has been that Lonmin’s financiers would get even grumpier because the already underperforming mine’s labour woes compound an already challenged platinum market.

The company has a debt facility of almost R1 billion.

“They understand that the last four weeks have been an anomaly, something out of the ordinary. We have to take on the challenges and are committed to finding a solution.

“We never said we would retrench staff or close shafts. We said we would be reducing our capital expenditure from $450 million (R3.7 billion) to $250 million. Capital expenditure tends to create jobs. The reduction will therefore have an impact on new jobs.”

Scott said that at this stage the company was not focused on whether to change its strategy as a result of the strike.

“Our primary aim is to resolve this impasse and get back to work. That for us is the bigger issue.”

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