South Africa’s National Union of Mineworkers (NUM) said on Friday it was shocked by platinum producer Lonmin’s plan to cut 3,500 jobs at mines in the country and said it would fight the decision.
Lonmin, the world’s third-largest producer of the precious metal, said on Thursday it was in talks with unions and employees to cut 3,500 jobs in order to cope with stubbornly low prices that are hitting platinum producers hard.
The London-listed company said it hoped to achieve the reductions through a voluntary process, with forced job cuts a last resort.
“As the NUM, we are going to fight against any job losses. It is very painful to see that these mining companies make the decisions of cutting jobs easy,” the NUM said in a statement. “The platinum sector had cut 35,000 jobs since 2012 and it is time to join forces to end this bloodbath.”
Like its peers, Lonmin was hit by a bruising five-month strike last year that cut production and dragged it into the red in the last financial year but failed to lift prices for the white metal.
About 30 percent of the South African platinum industry is burning cash, after capital expenditure, at current spot prices, according to Citi analysts.
A source close to Lonmin said that despite the job cuts the company did not have immediate plans to shut down shafts.
NUM, which represents roughly 10 percent of Lonmin’s workers, said it had not yet been officially consulted by Lonmin about its plan.
AMCU, by far the largest mining union with about 85 percent of Lonmin’s workers among its members, was unavailable for comment.
Gideon Du Plessis, a representative of the Solidarity union, said it had been involved in all discussions leading up to the announcement and the union was hoping to finding an alternative to forced job losses, including early retirements.
“We are concerned because a lot of our members are fed up. It may lead to an exodus of skilled labour because of the ongoing uncertainty,” Du Plessis said, adding a lot of mining workers had already moved to Australia and Canada.
“The South African mining industry is an uncomfortable working environment, there is a negative sentiment.”
Solidarity represents mine managers and is the smallest among the three unions at Lonmin.