JOHANNESBURG, Sept 20 (Reuters) – The world’s No. 3 platinum
producer Lonmin said on Thursday its wage bill
would rise 14 percent from Oct. 1 because of a pay deal reached
this week to end a violent 6-week strike.
Lonmin, faced with soaring costs, did not give precise
numbers, so it was not clear what the wage increases would
ultimately cost the company. Lonmin had an $18 million profit in
the first half of 2012.
The company said a one-time bonus of 2,000 rand ($240) would
be paid on or before Oct. 1 to each worker for returning to
duty.
Forty-five people were killed last month in violence
unleashed by the illegal strike, including 34 shot dead by
police in a single incident on Aug. 16 near Lonmin’s Marikana
mine 100 kms (60 miles) northwest of Johannesburg.
Analysts expect the company to go to the market with a
rights issue to inject cash into its operations after the loss
of production.
Lonmin made the announcement after markets had closed in
London and Johannesburg, but its share price fell over 6 percent
on Thursday as concerns mounted about the costs and thousands of
its employees returned to work.
Much of the platinum sector in South Africa, which is home
to about 80 percent of known reserves of the precious metal, is
struggling with thin margins because of low demand and rising
costs for things like power and wages.
Wildcat strike action has also spread to the world’s top
producer Anglo American Platinum.
There are concerns that the Lonmin deal, which will provide
pay hikes of 11 percent to 21 percent, will encourage other
workers in a country marked by glaring income disparities almost
two decades after the end of apartheid.
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