Lonmin hits back at calls to shut down its operations

Johannesburg – Lonmin has hit back at calls by the Mining Forum of South Africa (MFSA) and Bapo ba Mogale Investments (BBMI) to have its operating licence removed over non-compliance with its social and labour plan (SLP).

In a statement issued on Wednesday, the forum said it has written to President Jacob Zuma, pleading that the Department of Mineral Resources (DMR) suspend Lonmin’s operational licence for failing to comply with the commitments in its social and labour plan for the years 2014 to 2018.

Following a complaint by the mining forum and Bapo ba Mogale - which represents the interests of the community around the mine - to the DMR, and social and labour plan audit was conducted in August. The DMR found that Lonmin had failed to comply, and subsequently ordered the miner to take corrective measures, the forum said.

The forum also accused Lonmin of deferring monies for the social and labour plan to maximise profit instead. “Lonmin was found to have abandoned SLPs programme (sic) and it has reallocated SLPs monies pledged in 2014 to the operations to maximise profits,” the forum said. It went on to reiterate that the social and labour plan is a legally binding document, with which Lonmin was not complying.

Lonmin and other mines need to be held accountable for their social responsibilities towards the communities in which they operate, the forum said.

Lonmin, however has come out to defend itself against the “grossly incorrect statements” made by the forum.

“The company’s compliance with its social and labour plan is of absolute importance to Lonmin,” the platinum miner said. Lonmin added that it engages and reports to the DMR on an ongoing basis and engages directly with its stakeholders.  

Lonmin went on to unpack the challenges of meeting the commitment of the social and labour plan for 2014 to 2018.

“In that period, Lonmin had to resize the company resulting in about 6 000 employees being re-skilled, with some losing their jobs.”

The company is currently in negotiations with stakeholders regarding the retrenchment of 1 139 of its employees.

Lonmin said that since the social and labour plan audit was conducted, it has submitted an action plan requested by the DMR to address the issues. “That action plan has been submitted and received by the DMR, and Lonmin will now give the DMR regular progress updates on the implementation of the action plan,” Lonmin said.

Lonmin also clarified that it has consulted with other stakeholders, including the Bapo community, regarding its role in addressing unemployment. This is a “national problem” and requires a collaborative stakeholder effort, Lonmin explained.

Lonmin’s executives, including CEO Ben Magara, had met with the forum’s president, Blessings Ramoba, to communicate the challenges and delays, and progress and plans for SLPs going forward.

Lonmin claims that Ramoba offered to have the Mining Forum consult to Lonmin at a fee of R33.1m. “Lonmin remains open to engaging with legitimate NGOs that have a direct link to and represent the interests of the Greater Lonmin Community.”

Contrary to statements made by the forum that Lonmin was not willing to help the Bapo community alleviate poverty and unemployment, Lonmin said that it had awarded procurement contracts over R1.65bn to the community. These contracts include stockpile management and transport, among other things.

“Lonmin has provided substantial financial assistance to the Bapo companies established to manage these contracts, as well as the time and expertise of its employees.” Other efforts include a minimum of R5m paid to the Bapo Trust to uplift the community.

Previously Magara said that loss-making mines are limited in what they can invest to drive development.

“Without a profitable business, we cannot have money to invest in anything,” he said. “We cannot spend what we do not have.” About 70% of the platinum industry is loss-making.

Lonmin said that it would continue to engage and report on its SLP action plan to the DMR, as well as the Bapo ba Mogale and other stakeholders. 

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