Johannesburg - Lonmin said it will have to cut jobs unless workers end a strike that has crippled the company’s South African platinum mines for more than 15 weeks.

“The business will have to be restructured with a consequence on job losses” if there’s further delay, chief executive Ben Magara said today on a conference call.

The third-largest platinum producer appealed directly to workers by text message and voicemail after the Association of Mineworkers and Construction Union rejected the industry’s pay offer this month.

Lonmin has “overwhelming support” from employees for a return to work from May 14, Magara said.

“We will have a better sense of the take-up towards the end of this month and whether we have the correct mix of skills to enable us to safely restart operations,” he said.

Anglo American Platinum, Impala Platinum and Lonmin have lost 17.5 billion rand in revenue because of the country’s longest mining strike and workers have forfeited 7.8 billion rand in wages, according to a website the companies run.

The AMCU wants a 12,500 rand basic monthly wage plus benefits by 2017, while companies want cash allowances included.

Lonmin has skilled workers in place to resume processing in May before an expected ramp-up of output in June, Magara said.

About 9 percent to 11 percent of employees reported for duty on May 9, Vice-President for Public Affairs Lerato Molebatsi said.


Threat of Violence


Threats of violence may slow any return to work.

The National Union of Mineworkers, a minority union, said one of its members and his wife were killed today with machetes at Lonmin’s Eastern Platinum mines.

“We are extremely sad and shocked at the killing of our members today,” Livuwhani Mammburu, an NUM spokesman, said by phone.

“You can’t say you want employees to come back and then they’re killed.”

Workers need to feel safe to return to work, Magara said.

“We have engaged with the government, we have engaged with mine securities to ensure that there can be enough visible enforcement and policing,” he said.

Magara, from Zimbabwe, became Lonmin chief executive in July 2013, 11 months after 34 protesters demonstrating over conditions were killed by police in a single day near the company’s Marikana operations.

The AMCU has surged in membership since the killings and is now the dominant union in South Africa’s platinum industry.

“Management is experienced at recovering from such disruption,” Investec Ltd. said in a note today.

“However, until workers return, estimating the operational performance in the year ahead is exceptionally challenging.”

Lonmin posted a loss of 35.5 cents a share in the half year ended March 31, after a profit of 13.3 cents a year earlier, it said today in a statement.

The strike by the dominant union at its operations since Jan. 23 has resulted in 155,720 platinum ounces being lost, the Johannesburg-based company said.

Lonmin reduced spending about 60 percent and may cut it further to preserve cash during the strike, Magara said.

Net cash totaled $71 million at March 31, with available debt facilities of $589 million, according to the statement. - Bloomberg News