5,500 jobs to go at platinum miner Lonmin

UK mining firm, Lonmin, is set to reduce headcount by 5,500 at its South African operations as the mining sector is hit by challenging economic conditions.

The company, which is the third largest platinum producer, said the job cuts have been finalised after months of negotiations with trade unions. Around 4,000 jobs could go in Marikana and a further 1,500 in the Limpopo province.

The mining sector has been hit by a slump in demand for raw materials but Lonmin has also been hit by falling demand in the car industry, since platinum is used in catalysts for car exhausts.

Ian Farmer, chief executive, said “With the current backdrop of challenging economic conditions, these agreements are an important milestone in our objective of restructuring the company.”

Meanwhile, according to a report in The Times, shares in Lonmin have risen due to speculation that Xstrata, which owns around a quarter of the company, is planning a bid for the remainder of it.

The news of Lonmin’s job losses come just one week after Anglo Platinum, which is the world’s biggest platinum miner, announced it is to shed 10,000 jobs.

Meanwhile, Rio Tinto, which is the world’s second largest mining group, will also shed 14,000 job losses worldwide.

Story link: 5,500 jobs to go at platinum miner Lonmin