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No end to mine crisis for Lonmin

Monday, August 20, 2012 - 02:10

Aug. 20 - The owner of a South Africa platinum mine where 34 striking miners were shot dead by police remains under pressure despite a third of the mine's workforce returning. Ivor Bennett reports.

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Relatives of miners arrested during last week's clashes in South Africa protest outside a Pretoria courthouse. 250 men are facing charges, including murder. 10 died in clashes between unions at the Marikana mine before police opened fire killing another 34 workers. The mine is owned by Lonmin - the world's third largest platinum producer with 12 percent of global output. The deaths wiped 15 percent off Lonmin's share price and the UK-based company has had to write-off annual production targets. Reuters mining correspondent Clare Ferreira-Marques says it's a hole that could be tricky to climb out of. SOUNDBITE (English) CLARA FERREIRA-MARQUES, REUTERS MINING AND STEEL CORRESPONDENT, SAYING: "It really has pushed them to the brink. They will also fail to meet their target on costs. very closely watched. and the combination of that puts their balance sheet under even further strain and makes it likely that they'll even have to restructure their debt or come to the market and ask for cash." Lonmim may not be the only miner to suffer as a result of the strikes. Supply worries since the shooting have pushed prices up to a 6 week high. But demand for the key component of catalytic converters has been poor for some time. SOUNDBITE (English) CLARA FERREIRA-MARQUES, EMEA MINING AND STEEL CORRESPONDENT, EDITORIAL, REUTERS "The platinum industry is in a very difficult space so they are facing what many analysts call a perfect storm - so they have low prices, high costs and increasingly militant unions. Fundamentally platinum depends on the European car market and that remains very, very weak." Operations at the mine resumed on Monday after a third of the 28,000 workforce returned. Lonmin had threatened the 3,000 strikers with dismissal if the didn't show up. Mark Munroe is it's executive vice president. (SOUNDBITE) (English): MARK MUNROE, LONMIN'S EXECUTIVE VICE PRESIDENT FOR MINING, SAYING : "The unions and mine management have engaged with each other and are acting together to encourage more employees to follow the 30 percent that have already returned to work." Lonmin has now extended that deadline to Tuesday. They can't produce platinum until 80 percent are back at work. Ivor Bennett, Reuters

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No end to mine crisis for Lonmin

Monday, August 20, 2012 - 02:10