Clash at platinum mine turns deadly

August 14, 2012

Clashes between rival labor unions at Lonmin PLC’s platinum mine in South Africa had claimed nine lives as of Aug. 13 when two police officers and one worker were the found to be the latest casualties of the conflict.

Lonmin, the world’s third largest platinum producer, said it found a miner’s body with five bullet wounds in a mine shaft, a day after another miner was hacked to death. Over the weekend, two security guards were pulled from their vehicle and beaten to death.

Police haven't made arrests in the incidents.

Lonmin said the situation was “volatile” at its Western Platinum mine, 100 km (60 miles) northwest of Johannesburg. The plant was operating at reduced capacity and was under heavy police guard.

Police said the two officers were fatally shot, a third critically wounded and a Lonmin employee were killed during a protest at Lonmin's Marikana operation in northeastern South Africa. Police said some of their weapons were seized as officers attempted to quell the violence. Police said the situation was under control by Monday evening but remained tense, the Wall Street Journal reported.

The violence, which has come as a new union seeks to recruit against the country’s national union, poses new challenges for a South African platinum sector already reeling from plunging prices and weak European demand.

The emerging Association of Mineworkers and Construction Union is recruiting in the platinum-producing region of Rustenburg in the northeast, promising to secure better wages as an independent negotiator.

Reuters reported that at least three people were killed in a similar round of violence in January that led to a six-week closure of the world’s largest platinum mine, run by Impala Platinum.

The whole platinum sector is grappling with declining world prices for the precious metal and a surge in union militancy in South Africa, home to 80 percent of known reserves.

The incumbent National Union of Mineworkers is part of the Congress of South African Trade Unions, an ally to the country’s ruling African National Congress. South Africa accounts for about 80 percent of all global platinum production.

The AMCU said its rival is too soft in negotiations, which the NUM has denied.

AMCU President Joseph Mathunjwa said his union hasn’t promoted the violence and that the union is investigating what happened.
Executives at the Lonmin mine said production has slowed because of anxiety among employees.

"Suddenly there is another union and we have this violence," said Barnard Mokwena, Lonmin's executive vice president for human capital and external affairs. "This is a bigger risk than just for Lonmin." The company said it hadn't been able to estimate how much production has been affected.

The Marikana project, Lonmin's only operating asset, produced 694,149 ounces of platinum last year.

The latest bout of violence followed an illegal strike Friday of 3,000 Lonmin rock drillers. Four workers were hospitalized from gunshot wounds, Lonmin said. The company said striking workers were dressed in AMCU T-shirts.

Lonmin in July said it would cut its spending on projects over the next two years by nearly half, citing weak demand from Europe. The continent, the world’s biggest platinum customer by region, has cut consumption as auto-sector demand has slowed.

Meanwhile, platinum's price has dropped 39 percent from the record set in 2008 and Anglo American Platinum Ltd. has said it is considering the sale of some mines.



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