Lonmin, whose Marikana mine has seen worst violence, halts work on new shaft and puts 1,200 miners out of work
Unrest at South Africa’s platinum and gold mines has cost the industry 4.5bn rand (£335m) in lost output, President Jacob Zuma said, as the company at the centre of the strikes closed a shaft putting 1,200 miners out of work.
Although two mines reopened on Monday there was still no end in sight to the protests over pay which have seen 45 people killed in weeks of unrest. Zuma said that aside from the losses to mining companies, the stoppages had cost the South African treasury 3.1bn rand.
Lonmin, the London-listed company whose Marikana mine near Johannesburg has seen the worst violence, said it was losing production of 2,500 ounces (77kg) each day the strike continues. The world’s third biggest platinum producer, Lonmin is in danger of breaking its banking covenants because of the dispute and it said on Monday that it was halting work on a new shaft and would not require 1,200 contract workers.
As tension continued to run high, South African police stopped ANC renegade Julius Malema from addressing striking miners at Marikana. Malema, a rebel expelled from the ANC, has become Zuma’s most strident critic and has urged strikers to make mines “ungovernable”.
Following the government’s promise to get tough on strikers and those inciting violence, police, some armed, surrounded Malema as he arrived in Marikana, 60 miles north-west of Johannesburg, where police shot dead 34 strikers last month.
Strikers also said they would keep shut four mines run by the world’s top producer, Anglo American Platinum (Amplats), which the company aims to reopen on Tuesday.
“There is no need to resort to violence. I believe we must not encourage that,” Zuma told a conference of the Congress of South African Trade Unions, a partner with the African National Congress (ANC) in the governing alliance.
Some of the miners gathered at a football pitch in the town to hear Malema speak, threw stones at a police car as officers escorted him from the area.
Aquarius Platinum’s Kroondal mine and Xstrata’s chrome operation near the platinum belt city of Rustenburg reopened on Monday. But the situation on the ground remained tense, and Xstrata said that miners who had chosen to return to work had been subjected to intimidation by striking colleagues.
The unrest has its roots in a bloody turf war for members between an upstart union and the dominant National Union of Mineworkers (NUM) – a key political base for the ANC – but it is now unclear who the strikers are taking their directions from.
One workers’ representative dismissed Amplats’ plan to reopen its Rustenburg mines as a “joke”.
“For us, the reality is that the general strike is on,” Mametlwe Sebei, a self-styled Rustenburg community leader and Marxist politician, told Reuters. “We are going to be demonstrating in defiance. We will not be intimidated.”
Amplats management was “whistling in the dark” if it believed the mines would reopen on Tuesday, he said.
“They can deploy the army, they can be shooting people, shooting old men in their shacks, teargassing young kids … but let us be clear, there will be repercussions.”
South Africa is home to 80% of known reserves of platinum, the price of which has gained around 20% since the Marikana shootings on 16 August.
Police raided a Lonmin hostel on Saturday and seized spears, machetes and other weapons from strikers. They later used rubber bullets and teargas to disperse groups of protesters. The army has also been brought in to help restore order.
On Monday, police arrested 42 people at a mine owned by RBPlat and Amplats who were on an illegal strike.
Lonmin said mining activity at Marikana remained minimal and lowered its full-year production guidance to between 685,000 and 700,000 saleable ounces from 750,000 ounces. Lonmin also said it would temporarily close a shaft at its Karee mine, which had been meant to boost output for the struggling company.
On Friday, Lonmin workers dismissed an initial pay offer as way below the 12,500 rand a month basic pay sought by members of the militant Association of Mineworkers and Construction Union (AMCU), which is challenging the dominance of the NUM. Lonmin, which is offering increases of between 9% and 21%, said 12,500 rand would put thousands of jobs at risk and challenge the viability of the business. Basic pay for most underground workers is currently around 5,400 rand.
The ANC has criticised companies for paying lip service to the mining charter, which seeks to give workers and communities a bigger share of mineral wealth and rectify disparities of white apartheid rule.
“Mining remains the bedrock of the South African economy, and yet the abject poverty and squalor surrounding mining areas remains a matter of deep concern,” it said in a statement.
“The current instability at Marikana thus poses challenges to the growth of the sector and the international image of the country,” the ANC said. Reuters
Posted by admin | Posted on 15-09-2012
Category : Business
Tags: damaging, extremely, industrial, lonmin, month, plant, platinum, sector, south africa, the guardian, week
Move dashes hopes of ending five weeks of industrial action which could be ‘extremely damaging’ to country’s economy
Strikers at Lonmin’s Marikana mine rejected a pay offer on Friday, dashing hopes of ending five weeks of industrial action that has swept through South Africa’s platinum sector and laid bare the power struggle in the ruling ANC.
Workers at the mine, where police shot dead 34 protesters last month, dismissed the offer as way below the 12,500 rand (£925) a month sought by members of the militant Association of Mineworkers and Construction Union (AMCU).
“We are not interested,” striker Molifi Phele said as hundreds of stick-waving demonstrators chanted and danced around him on the sun-bleached grass in the heart of the “platinum belt”, 100km north-west of Johannesburg.
“What he is offering cannot buy you anything. All we want is 12,500.”
The killings at Marikana on 16 August have poisoned industrial relations across the sector and could be “extremely damaging” to the economy, finance minister Pravin Gordhan said in a shift of tone from last week.
The rand fell 3% on Wednesday as the unrest engulfed Anglo American Platinum, the world’s biggest producer, and ripples have reached the bond market amid concerns Pretoria might resort to throwing money at the problem.
“Things could get really ugly,” said Manik Narain, an emerging market strategist at UBS in London. “There is a risk the government will respond to the unrest with fiscal stimulus, which will not go down well with rating agencies.”
On Friday police fired teargas and stun grenades to disperse another group of striking miners at an Aquarius Platinum plant in the area.
Aquarius said it had closed the mine as a precaution. Global miner Xstrata did the same at a nearby chrome plant.
Posted by admin | Posted on 11-09-2012
Category : Business
Tags: corruption, davis, food, glencore, merger, mergers and acquisitions, mining, price, south africa, switzerland, trader, world, xstrata
The takeover by commodities trader Glencore of mining giant Xstrata has turned unfriendly. But why does this merger matter?
Like former Barclays chief executive Bob Diamond, the bosses of Glencore and Xstrata are a breed apart. These mining and commodities trading giants, which are in the midst of a £37bn merger, have ridden an extraordinary boom in demand over the last 10 years and creamed off much of the profits for themselves and their shareholders.
Based offshore and paying little tax, Glencore orchestrates a business that few people would understand, least of all politicians who must judge whether the merger creates a monopolistic industry. Exotic derivatives and super-fast computer systems are deployed to maximise profits. Like the bankers, commodities traders argue their sophisticated systems enhance the smooth working of market capitalism. For those not in the habit of reading business pages, here are five reasons why you should care about this merger.
1. Pay and wealth
Bankers once enjoyed the salaries and bonuses commanded by mining company bosses. Mick Davis, the Xstrata chief executive, is already the best paid boss in FTSE 100, taking home £18.5m last year. Until last week, when the merger was still friendly, he was due to receive a £30m golden handcuff to keep him at his desk. Now Glencore boss Ivan Glasenberg, who owns a £5bn stake in his company, has performed an extraordinary U-turn. He has upped his offer for Xstrata and made Davis’s exit a condition of the deal, though Davis will likely leave with £8m in cash and £38m in shares.
The two men are well known to each other. Davis and Glasenberg met at the University of Witwatersrand in South Africa and decided to cement their already strong business relationship into a merger of the two companies over a dinner in London last December.
2. Food
Droughts and floods have damaged this year’s food harvest, though conflicting reports of the overall effect on global stocks often make it difficult to fathom the shortfall.
Nevertheless, foodstuff prices are already up more than 20% since the spring and trading is frantic as a glut of panicky stories flood the media. Soybean prices are above the peak reached in the last food crisis in 2008.
Glencore has grown over 20 years to be one the biggest food traders in the world, dominating the trade in wheat, maize and barley, edible oils and sugar. The head of Glencore’s food trading business created a storm when he said last month that the chronic drought affecting the US midwest would be “good for Glencore” because it would be able to exploit soaring prices.
Chris Mahoney, the trader’s director of agricultural products, said: “In terms of the outlook for the balance of the year, the environment is a good one. High prices, lots of volatility, a lot of dislocation, tightness, a lot of arbitrage opportunities [the purchase and sale of an asset in order to profit from price differences in different markets].”
3. Metals and Minerals
A merged company would be the No 1 producer of coal and zinc and the biggest independent producer of copper within four years. The European Union is understood to be concerned the company could become so powerful that its trading policies will influence the price of basic metals. Xstrata has a huge investment policy, with plans to open new mines from Peru to Namibia, increasing production by 50%, though the global economic slowdown has forced the company to mothball iron ore mines in Australia.
4. Corporate governance
Xstrata is based in Zug, Switzerland, for tax purposes while keeping a corporate office in London. It’s the “best of both worlds” favoured by hedge funds and a growing number of global businesses. Glencore follows a similar model, keeping most of its business in Switzerland’s Baar canton, while being registered in Jersey with some 50 offices in 40 countries. Glencore was a 400-strong partnership until it became a stock market listed firm a couple of years ago. As such it paid no corporation tax. Under new arrangements for companies with large operations overseas, it is expected to continue paying virtually no UK corporation tax. It is also accused by aid charities of avoiding tax in Zambia and other countries where it operates, which it denies.
5. Corruption
Mining ranks as one of the most corrupt industries, according to corruption watchdog Transparency International. Most minerals are found in developing world countries and poverty tends to influence the demands of local politicians and offials for bribes to gain planning permission an export licences.
The merged company would be the fourth largest miner in the world and as such would be in the frontline in combating corruption. Both companies say in their annual reports they will not tolerate bribery or corruption of any kind. But Glencore was fined €500,000 by a Belgian court earlier this summer after a European commission official was found providing confidential information on agriculture markets to the company. Global Witness, the campaigning charity, has asked Glencore to explain potentially corrupt deals in the Democratic Republic of Congo. The allegations, which were the subject of a BBC Panorama film, include the use of child labour. The charity asked for details of the company’s relationship with an Israeli businessman who is key to its substantial mining investments in the country.
Xstrata is not immune from controversy. Protesters in the Peruvian city of Cuzco have accused the company of contaminating local water supplies and sickening farm animals, which the company denies.
Posted by admin | Posted on 01-09-2012
Category : Business
Tags: called, charge, fields, gold, guardian, kdc, massacre, mining, murder, prosecutors, south africa, unions
World’s fourth biggest gold mine says quarter of its 46,000 workers walked out after violent protest at Lonmin platinum mine
Unrest among South African miners has spread to the world’s fourth biggest gold mine.
Bullion miner Gold Fields said about a quarter of its 46,000 workers have walked out in the first strike to affect South Africa’s gold mining industry since violent protest shut down London-listed Lonmin’s platinum mine nearby three weeks ago.
Gold Fields, which is listed in Johannesburg, said 12,000 miners have been on a “unlawful and unprotected” strike at the KDC mine near Johannesburg since Wednesday.
The KDC mine produced 1.1m troy ounces of gold in the year ending December 2011. Gold Fields’ shares closed down 2.8%.
At Lonmin’s Marikana mine, just 5.7% of miners turned up for work on Friday, a day after South African prosecutors said they were charging 270 miners arrested during the so-called “Marikana massacre” with the murder of their 34 colleagues who were shot dead by police.
The murder charge – and associated charges for the attempted murder of 78 miners injured at the Marikana mine near Johannesburg – was brought under an obscure Roman-Dutch common law previously used by the apartheid government.
The move came as the men appeared in court charged with public violence over the clashes at the Lonmin platinum mine on 16 August when striking miners armed with clubs, machetes and at least one gun allegedly charged police, who opened fire.
Julius Malema, the former African National Congress Youth League leader, who has called for President Jacob Zuma to resign over the “massacre”, told supporters of miners outside the courthouse that the charges were “madness”.
South Africa’s justice minister rebuked prosecutors for the move, saying the decision had caused “shock, panic and confusion” among the general public.
Mines minister Susan Shabangu acknowledged this week that the recent labour violence would impact potential investment into South Africa.
Posted by admin | Posted on 31-08-2012
Category : Business
Tags: africa, charge, lonmin, murder, south, south africa, striking, violence, workers
Murder charges brought against 270 miners under obscure law previously used by apartheid government
The 270 miners arrested during violent strikes in South Africa have been charged with the murder of their 34 colleagues who were shot dead by police.
The murder charge – and associated charges for the attempted murder of 78 miners injured at the Marikana mine near Johannesburg – was brought by the national prosecuting authority under an obscure Roman-Dutch common law previously used by the apartheid government.
The move came as the men appeared in court charged with public violence over the clashes at the Lonmin platinum mine on 16 August when striking miners armed with clubs, machetes and at least one gun allegedly charged police, who opened fire. It suggests President Jacob Zuma’s government is trying to shift the blame for the killings to the striking miners.
The prosecuting authority said all 270 miners had been charged. Less than one in 10 Lonmin miners turned up for work at the mine on Tuesday, the lowest level since workers returned to work following the clashes. Violence has since spread to Lonmin’s other operations.
The firm said 8% of its 28,000 workers showed up as union protests continued.
Lonmin had initially threatened to sack striking workers.
Posted by admin | Posted on 31-08-2012
Category : Business
Tags: anc, called, charge, julius malema, lonmin, malema, mine, mining, npa, people, south africa, striking, violence, world news
Former ANC youth leader calls for ‘revolution in the mining sector’ after charges brought under obscure apartheid-era law
The 270 miners arrested during violent strikes in South Africa have been charged with the murder of their 34 colleagues who were shot dead by police.
The murder charge – and associated charges for the attempted murder of 78 miners injured at the Marikana mine near Johannesburg – was brought by the national prosecuting authority under an obscure Roman-Dutch common law previously used by the apartheid government.
The move came as the men appeared in court charged with public violence over the clashes at the Lonmin platinum mine on 16 August when striking miners armed with clubs, machetes and at least one gun allegedly charged police, who opened fire.
Julius Malema, the former African National Congress Youth League leader, who has called for President Jacob Zuma to resign over the “massacre”, told supporters of miners outside the courthouse that the charges were “madness”.
Malema, who was expelled from the ANC four months ago, said: “The policemen who killed those people are not in custody, not even one of them. This is madness. The whole world saw the policemen kill those people.”
Frank Lesenyego, spokesman for the National Prosecuting Authority (NPA), said: “It’s the police who were shooting, but they were under attack by the protesters, who were armed, so today the 270 accused are charged with the murders [of those who were shot].”
More than 150 of the arrested miners have filed complaints that they have been beaten up in police cells by officers, according to the Independent Police Complaints Directorate.
Directorate spokesman Moses Dlamini said the complainants accused police of beating them with batons and fists and kicking and slapping them to force them to give the names of miners who hacked two police officers to death in a week of violence preceding the shootings. Eight other people were killed, including three miners and two mine security guards whom striking miners burned alive in their vehicle.
Pierre de Vos, Claude Leon Foundation chair in constitutional governance at the University of Cape Town, wrote on his blog that he could not imagine the NPA really believed that “any court will find the miners guilty of murder for the killing of their comrades by the police”.
He added: “The NPA seems wrongly to conflate (either deliberately or out of shocking ignorance) allegations that the miners provoked the police, on the one hand, with allegations that the miners themselves incited the police to shoot at them because they had the intention to commit suicide by getting the police to kill them.”
Police commissioner general Riah Phiyega has faced criticism for saying that her officers “did nothing wrong” and acted in self-defence.
Less than one in 10 Lonmin miners turned up for work at the mine on Tuesday, the lowest level since workers returned to work following the clashes. Violence has since spread to Lonmin’s other operations.
The firm said 8% of its 28,000 workers showed up as union protests continued.
Lonmin had initially threatened to sack striking workers.
Malema said on Thursday that black South Africans are worse off than during apartheid and called for a campaign of nationalisation in South Africa including all iron, platinum and zinc resources.
Staging his political comeback from a liquidated gold mine, Malema launched what he called a “revolution in the mining sector”, according to the Independent.
He told mineworkers not to trust the ANC government. “Every mine had a politician inside,” the 31-year-old said. He added that all miners should be paid a minimum of 12,500 rand (£930) a month, three times the current rate.
Posted by admin | Posted on 28-08-2012
Category : Business
Tags: africa, assaulted, company, demanding, mine, miner, mining, news, police, rights, south africa, striking, violence, workers
Rivalry between striking unions at Marikana mine reignites four days after memorial to miners killed by police
Violence has returned to the Lonmin mine where 34 miners were shot dead by South African police earlier this month.
Police on Monday reported a fresh outbreak of assaults at the platinum mine owned by the London-listed company, which is considering an emergency rights issue in the wake of the dispute.
A long-running rivalry between miners’ unions reignited four days after a memorial service to remember the 44 people who have died during a fortnight of violence at Lonmin’s Marikana mine near Johannesburg.
Striking miners, who are demanding a tripling of their pay, threatened and assaulted other workers as they attempted to go back down the mine, according to reports from the scene. Alfonso Mofokeng, a miner from Lesotho, told the AFP news agency: “We are aware that some people have gone back to work, we have noted that behaviour, and we need to come up with a plan to deal with them.”
Lonmin, which had been hoping to restart production on Monday after a two week shutdown due to the violent protest, said 13% of its 28,000 workers reported for duty. The company said many of its miners were unable to get to work after the protesters threatened bus drivers.
“There have been incidents of intimidation towards bus drivers overnight as well as intimidation of Eastern workers this morning, preventing them coming to work,” a company spokesman said. Until now, the eastern part of Marikana’s operation had remained relatively free of violence.
On Monday, about 2,000 of the striking rock drillers, some carrying sticks and whips, gathered near the site of the “Marikana massacre” where police shot dead 34 striking miners in the worst single outbreak of police violence since the end of apartheid. Five armoured police vehicles and a helicopter were monitoring the situation.
The striking miners are demanding their wages are increased from 4,000 rand (£306) a month to 12,500 rand. The company says most workers are paid about 10,500 rand, if bonuses are included.
In comparison, Lonmin’s chief executive Ian Farmer, who is currently seriously ill in hospital, collected pay and bonuses of £1.2m last year.
Last week, Lonmin promoted its finance director Simon Scott to acting chief executive until Farmer recovers.
The FTSE100 mining company also admitted that it would breach its loan covenants due to the financial impact of the strike, forcing it into talks with its banking syndicate as it considers an emergency rights issue.
The South African independent police investigative directorate said it was investigating claims that more than 100 striking miners were assaulted in police custody. About 260 miners have appeared in court facing charges ranging from intimidation to murder.
