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Lonmin rubbishes report of 5,700 job cuts

Ben+Magara+xxxBEN Magara, CEO of Lonmin, on Monday denied a Reuters report that the platinum producer plans to cut 5,700 jobs to improve profitability after the five-month strike that crippled the sector.

Citing two mining sources in Johannesburg and London familiar with the plan, Reuters reported it entailed the closure of four to six of the company’s 11 shafts.

“There is not an iota of truth in this story,” Mr Magara told Business Day. “We are ramping up our operations according to plan. We are reviewing our profitability and costs and we’ll update the market in due course.”

Lonmin spokeswoman Sue Vey said the world’s third-largest platinum producer had made it clear it was reviewing its assets but that she had “no knowledge” of the plans on which Reuters was reporting.

“As we have said in our interims (half-year results), restructuring is inevitable because of the five-month strike, but until we reach steady state production we cannot assess the extent of the restructuring, if it is at all necessary,” she said. Steady state production could be reached towards the end of the year, she said.

Lonmin’s largest shareholder, Glencore, with a 24.5% stake, has become more active on the board where it has two seats. It wants Lonmin to make more profit so that it can sell its stake for a reasonable price.

Lonmin’s shares are trading at the bottom of a 52-week range, ending Monday’s session down 0.2% at R38.40 a share.

A well-placed source at Lonmin said there could be cuts to “overheads” at head office. “But this would be nowhere close to hundreds of jobs, let alone thousands.”

Glencore is believed to be behind the appointment of a new chief operating officer, former AngloGold Ashanti executive and mining veteran Johan Viljoen, and the return of Ben Moolman to Lonmin to drive the turnaround strategy devised by Mr Viljoen.

Lonmin said in June the strike and low platinum prices meant “restructuring of our business has become inevitable”.

Job cuts could trigger more labour unrest, including potential strikes by the Association of Mineworkers and Construction Union (Amcu), whose members have downed tools in the past to protest against planned lay-offs.

Lonmin rubbishes report of 5,700 job cuts Reviewed by on . BEN Magara, CEO of Lonmin, on Monday denied a Reuters report that the platinum producer plans to cut 5,700 jobs to improve profitability after the five-month st BEN Magara, CEO of Lonmin, on Monday denied a Reuters report that the platinum producer plans to cut 5,700 jobs to improve profitability after the five-month st Rating:
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