Lonmin may be set to experience a new wave of unrest, as it announces plans to cut-back its workforce in early 2013 as part of a restructuring strategy.
The mining operator on Tuesday announced its plans for restructuring, and revealed that it had notified trade unions of the proposed job cuts.
With work stoppages halting production for a period of the year, output figures are down and the company was forced to cut its production targets for the year, while also downsizing expansion plans for the foreseeable future. The company decided to stall plans to increase output to 900,000 ounces per year given recent pressures.
“We haven’t decided how many employees will be impacted. What we have said is we are freezing our production target at 750,000 ounces for the next two years,” Lonmin spokeswoman Sue Vey told Reuters, adding: “What we are doing is shaping the business accordingly.”
The move comes little over a month since Lonmin ended six weeks of violent illegal action – which also involved the tragic killings of at least 42 people – by its work force over demands for pay increases.
Agreeing a pay package increase on September 18th, the company finally prompted workers to resume their positions following 42 lost production days, on the promise of between 11 and 22 per cent hikes in pay, plus additional benefits.
This huge pay hike in turn triggered a wave of similar strikes across the country, spreading to multiple industry sectors, as South Africa’s work force demanded a matching of Lonmin wage increases. Some producers are still struggling to bring strikes to an end, as such the latest revelation by Lonmin comes at a very touchy time.
Chances are that new waves of unrest may ensue, as unions gear up to oppose job cuts.
“Of course, we are in principle opposed to retrenchments. We will discourage them from going on a restructuring process that would see any jobs being lost,” Lesiba Seshoka, spokesperson for the National Union of Mineworkers said.
Meanwhile, spokesman for the trade union know as Solidarity Gideon du Plessis told Reuters that he believes fears may be premature, as given the financial pressures on the company contrasted with the need to maintain strong production, it may be the middle-management level of Lonmin’s workforce that will be first in line for job cuts.
