JOHANNESBURG: The world’s third-biggest platinum producer shut down its South African operations on Tuesday after violent clashes left at least nine people dead at its principal mine. Lonmin’s shares dropped almost 5 per cent in London and 4 per cent in Johannesburg as production ceased as a result of a turf war between rival trade unions. They closed 4.39 per cent down at 708.5p in London.
Protests at the Marikana mine, 60 miles from Johannesburg, began last week when workers walked out seeking a pay increase to 12,500 rand a month. The trouble intensified over the weekend, driven by a wider feud between two unions.
Two policemen died in a machete attack by a mob near the mine, two security guards were hacked to death and a union said one of its members was killed while trying to report for duty. The body of a middle-aged man who had been bludgeoned to death could be seen in the area on Tuesday, the Associated Press reported, as several thousand miners held another protest over working conditions.
Lonmin executives said all its shafts across the South African platinum belt, which account for 12 per cent of the global supply, were closed to all but essential services, such as ventilation. Although the price of platinum has fallen steeply in the past six months, the spot price rose 2 per cent on Tuesday following the violence. Barnard Mokwena, Lonmin's executivevice-president, said: “Until the place is safe, we don't want to talk about production.”South Africa produces about three-quarters of the world's platinum, which is used to make catalytic converters in cars. It has one of the most unionised workforces in the world and has recently seen a rise in inter-union violence at mines.
The flare-up at Lonmin, the deadliest so far, pitches the well established National Union of Mineworkers against the newer militant Association of Mineworkers and Construction Union. London-based Lonmin says 96 per cent of its production comes from Marikana. The platinum sector is grappling with declining world prices for the metal and a surge in union militancy in South Africa.
By arrangement with the Guardian