Lonmin to cut 3,500 jobs in South Africa

7 May 2015 (Last Updated May 7th, 2015 18:30)

Platinum mining major Lonmin is planning to cut 3,500 jobs across its South African mines in response to slump in platinum group metal prices (PMG).

Platinum mining major Lonmin is planning to cut 3,500 jobs across its South African mines in response to slump in platinum group metal prices (PMG).

The company is in negotiations with unions and employees over the redundancies.

Lonmin CEO Ben Magara said: "The mining industry is going through another challenging economic cycle and we need to make difficult decisions to maintain the resilience of our business and protect employment.

"Nobody wants this, but we all have to protect the future of the business for as many employees as possible."

"Nobody wants this, but we all have to protect the future of the business for as many employees as possible."

The company plans to offer voluntary terminations from its workforce, which accounts for around 60% of its total costs.

Lonmin will provide further details in its interim result report next week.

Meanwhile, Glencore has gained shareholders approval to sell its 23.9% stake in the South African producer.

In February, the Swiss firm proposed divesting its ownership in Lonmin after it deemed it a non-core asset.

Last year, Lonmin along with Anglo American Platinum and Impala Platinum, faced production interruptions after Amcu-led workers initiated a five-month strike over wages.

The strike ended when a salary revision was agreed, which increased the labour costs for the companies.

For the fiscal year 2015, Lonmin reduced capital spending in-line with efforts to achieve cost savings of around ZAR2bn ($166m).