Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
South African producer Lonmin (LON: LMI) hired more security staff for all of its mines in response to recent violence and job action that threatens to expand as the Association of Mineworkers and Construction Union (AMCU) voted Thursday to go on strike at the company’s mines.
According to Eye Witness News, union leaders failed to reach an agreement with Lonmin regarding being recognized as the majority union, and have requested a meeting with the company for Monday. If no agreement is reached by Tuesday, AMCU said its members would down tools.
This would be the third strike this year affecting the platinum miner, which has said it will not tolerate further violence, as well as called for more police on the ground and the removal of weapons in the areas around its operations, Reuters reports.
As the annual wage bargaining season begins, authorities fear violence and strikes will increase and are said to be “seriously considering” the deployment of peacekeeping forces to maintain the order.
South Africa accounts for 75% of world PGM output. The country’s mining sector, which accounts for 6% of gross domestic product, has been repeatedly hit by disputes over low wages that reflect widespread anger over enduring inequalities in the economy.
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