History is slowly repeating itself at Lonmin as members of the community forces the mine to shut down one of it’s shaft. Lonmin, indicated that some of its mining shafts have been shut for a week after members of the local community disrupted operations while protesting for jobs.
Lonmin’s E2 and E3 shafts near Bapong in South Africa’s North West province have not been operational since May 3 to protect employees. Wendy Tlou, a spokeswoman for Johannesburg-based Lonmin, said by phone on Wednesday. The company so far suffered the equivalent of 40 million rands ($3 million) in lost output, she said.
In 2014 Lonmin unveiled an R546 million share transaction with the Bapo ba Mogale community as well as an R100m cash payment to the community as the company attempted to meet its black economic empowerment (BEE) targets by the end of the year.
The Lonmin deal with the community has been experiencing challenged as a result now members of the Bapo Ba Mogale community have been demanding 1 500 jobs at Lonmin’s operations, training and access to mine certain areas.
Ben Magara, has cut 6 000 jobs in the past two years to try to arrest Lonmin’s decline since taking the CEO job in 2013. He closed high-cost mining areas and reduced capital expenditure to save cash.
Tlou said, a BapoTrans bus, a joint venture between Lonmin and the community, was set alight in Bapong as part of the protest on Wednesday. The driver escaped unhurt, Mpeile Talane, a warrant officer, said by phone Thursday.
“We have been engaging with this part of the community, holding multiple meetings over the past month, but have not been able to reach a resolution,” Tlou said. “We have explained to them that we cannot hire 1,500 people given current market conditions.”
The production outage comes as Lonmin, which raised about $400 million in a life-saving rights offer in 2015, burned through 70 percent of its cash in the final quarter of last year after a low platinum price combined with falling production from its biggest shaft.
In November, Lonmin pledged to spend 1.6 billion rands on procurement from the Bapo community over the next five years. The agreement was part of a 2014 black-empowerment deal that saw the community swap royalty payments for equity in the company.