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01 Dec 2008Business: Lonmin Platinum Starts Section 189 Process
Recent Gauteng Business News
The trade union Solidarity today received the official Section 189 notice from platinum producer Lonmin. According to this, 4 000 employees, including 3 000 at Western Platinum Ltd and 1 000 at Eastern Platinum Ltd, could lose their jobs.
Meanwhile, the Department of Minerals and Energy called for an urgent meeting with the Chamber of Mines and all trade unions in the mining industry to discuss the impact of the worldwide economic crisis on the South African mining sector.
According to the Section 189 notice Solidarity received from Lonmin today, employees in all job categories will be seriously affected by the planned retrenchments. In addition, Lonmin is proposing only the minimum severance pay of one week’s salary for every year of service.
The retrenchments are mainly the result of the drastic decrease in the demand for platinum. The consumption of platinum largely depends on the manufacturing and sale of new vehicles, since about 54% of all platinum produced is used for car exhausts. Also, the drop in the platinum price has placed further pressure on the industry.
“The planned retrenchments are expected to directly affect more than 15% of Lonmin’s total workforce,” according to Solidarity spokesperson Jaco Kleynhans. “The South African mining industry is facing an enormous crisis and all possible avenues need to be explored to prevent retrenchments. A larger solution is urgently needed to counter further ripples of the economic crisis in the industry,” he says.
According to the notice, the Section 189A consultation process will be referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) in order for the Commission to act as mediator between Lonmin and the trade unions.
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