BREAKING NEWS

BREAKING NEWS

Strike threat adds to headaches for Lonmin chief executive

Now Reading:

Strike threat adds to headaches for Lonmin chief executive

Text size Aa Aa

By Ed Stoddard MOOINOOI, South Africa (Reuters) – The threat of a strike in South Africa put renewed pressure on Lonmin <LMI.L> on Monday as Chief Executive Ben Magara sought to reassure investors that the platinum miner’s underlying business was robust. The South African firm, not for the first time, faces an uncertain future in the wake of a 30 percent plunge in its share price on Friday after it delayed annual financial results because it could not yet give a specific figure for the impact of an ongoing business review. The company has said it has sufficient liquidity to fund it through a review that could include the sale of assets, job cuts and the renegotiation of loan agreements. “There is no risk of closure,” Magara told Reuters on Monday, adding that the disposals of non-core greenfield projects and downstream processing capacity were on the table. Tensions with some of its workers risk adding to the problems facing Lonmin. Labour union Solidarity, which represents mostly skilled employees, said its members supported plans to go on strike next month or in January in a dispute over how the company handles investor relations. The union would also apply to have Lonmin protected from creditors, a process called “business rescue” in South Africa, if the company pleads poverty to cut jobs, Solidarity General Secretary Gideon du Plessis told Reuters. Magara was speaking at a ceremony to present new health and road projects Lonmin is funding near its mines west of Johannesburg. “Our underlying operations are continuing to perform very well … So that we have some bit of cash. Because a loss-making business would not be able to buy ambulances,” Magara said. Lonmin was handing over a fleet of ambulances it has bought for the communities. It was also showcasing roads it has built. Lonmin, one of the world’s top platinum producers, has been in the doldrums for years due to low prices and soaring costs and has been to shareholders for rights issues to shore up its balance sheet three times since 2009. There has also been speculation about a deal to combine with fellow South African miner Sibanye-Stillwater <SGLJ.J>. Shares in Lonmin, which is listed in London and Johannesburg and has a market capitalisation of only around 200 million pounds remained volatile on Monday. They were down 1.6 percent in Johannesburg by 1000 GMT after an initial fall of 10 percent. The London-listed stock actually made up a little lost ground.

(Reporting by Ed Stoddard; Editing by Mark Potter and Keith Weir)
euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.