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Lonmin
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Lonmin
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Lonmin plc, formerly Lonrho plc, was a British producer of platinum group metals operating in the Bushveld Complex of South Africa. It was listed on the London Stock Exchange. Its registered office was in London, and its operational headquarters were in Johannesburg, South Africa.[2]

Key Information

Lonmin rose to international attention following the Marikana miners' strike in August 2012, in which over 100 striking Lonmin employees were shot (36 killed and 78 wounded) by South African Police Service officers. On 10 June 2019, Sibanye-Stillwater completed the acquisition of Lonmin plc.[3][4]

History

[edit]

The company was incorporated in the United Kingdom on 13 May 1909 as the London and Rhodesian Mining and Land Company Limited.[5] It had a founding capital of £1300, which was raised by seven shareholders. Led by Julius Weil, the company started to invest in mining rights in Rhodesia. In 1912 Lonrho started to invest in farming land as well and by 1945 it had become Rhodesia's biggest company.[6]

Businessman Tiny Rowland was recruited as chief executive in 1962.[7] For many years during the second half of the twentieth century it was frequently in the news, not only due to the politically sensitive part of the world in which it had mining businesses, but also – as it strove to become a conglomerate not wholly dependent on these businesses – in a number of takeover battles, most notably for the Harrods of Knightsbridge department store.[7]

In 1968, Lonrho acquired Ashanti Goldfields Corporation, a gold mining business in Ghana.[8] The former Conservative minister Duncan Sandys, a director of Ashanti, became Lonrho's chairman in 1972.[9]

Sir Angus Ogilvy, married to a member of the British royal family (Princess Alexandra), was a Lonrho director and this increased media interest in the company's affairs. Ogilvy's career ended when Lonrho was involved in a sanctions-busting scandal concerning trade with Rhodesia. Prime Minister, Edward Heath, criticised the company, describing it in the House of Commons in 1973 as "an unpleasant and unacceptable face of capitalism."[10]

By 1979, Lonrho employed 140,000 people worldwide.[11]

During the 1980s, Lonrho entered the British newspaper market, buying the Sunday newspaper The Observer in 1981[12] and the newly launched daily Today in 1986.[13] Today was sold to News International the following year,[14] while the Guardian Media Group bought the Observer in 1993.[12]

Tiny Rowland was finally ejected from Lonrho in October 1993 after a boardroom tussle with director Dieter Bock.[15] He was replaced by Nick Morrell, a former chief executive of The Observer.[16]

Two months before Rowland's death (on 26 July 1998) the assets of Lonrho were split. Two publicly listed companies, Lonrho plc and Lonrho Africa plc were created – the former retaining all the non-African businesses and mining assets.[17] In 1999, Lonrho plc was renamed as Lonmin plc and a new era as a focused mining company began.[18] In 2000 Gordon Haslem became CEO.[19]

In 2004 Brad Mills became CEO: Mills in turn announced his intention to resign from his position in 2008. Mills leaves behind a "significant contribution in developing the company over the past four years" according to chairperson, Sir John Craven, as his introduction of mechanized mining has increased safety for the miners, as well as increasing productivity.[20] Lonmin indicated that former chief strategic officer responsible for the company's business development, Ian Farmer, would replace him.[21]

On 1 October 2008, after building a 24.9% stake in Lonmin, Xstrata announced it was not proceeding with a takeover pitched at £33 per Lonmin share, blaming the failure of its bid on "unprecedented uncertainty in financial markets" caused by the 2008 financial crisis.[22] Xstrata and its 24.9% stake in Lonmin was later acquired by Glencore on 2 May 2013.[23] Glencore announced on 11 February 2015 that it intends to divest its 23.9% stake in Lonmin, which it inherited through the acquisition of Xstrata. Glencore's divestment in Lonmin will be implemented by way of a distribution in specie to Glencore shareholders.[24]

Farmer resigned as CEO in 2012 for health reasons.[25]

In October 2017, the Mining Forum of South Africa (MFSA) and Bapo ba Mogale Investments (BBMI) pleaded to President Jacob Zuma to suspend Lonmin's operating licence over non-compliance with its social and labour plan (SLP) for the years 2014 to 2018.[26]

In 2019, Lonmin was acquired by Sibanye-Stillwater.

Operations

[edit]

The Company was a producer of platinum group metals operating mainly in the Bushveld Complex in South Africa. It had two multi-shaft mining operations, located respectively in:[27]

role salary bonus total
Ian P. Farmer[28] Chief Executive Officer £351,538 £213,990 £565,528
Alan Ferguson[29] Chief Financial Officer £422,500 £366,344 £788,844

Strikes

[edit]

Marikana miners' strike

[edit]
Main article: Marikana miners' strike

At the Marikana platinum mines, operated by Lonmin at Marikana near Rustenburg, 3,000 workers walked off the job on 10 August 2012 after Lonmin failed to meet with workers.[30][31] The event garnered international attention following a series of violent incidents which began when leaders from the National Union of Mineworkers (NUM) allegedly opened fire on striking NUM members on 11 August.[31][32]

The Marikana Massacre,[33] as referred to in the media, occurred when police broke up an occupation by striking Lonmin workers of a 'koppie' (hilltop) near Nkaneng shack settlement in Marikana on Thursday 16 August 2012. As a result of the police shootings, 34 miners died and an additional 78 miners were injured causing anger and outcry against the police and South African government. Further controversy emerged after it was discovered that most of the victims were shot in the back[34] and many victims were shot far from police lines.[35] The violence on 16 August 2012 was the single most lethal use of force by South African security forces against civilians since the end of the apartheid era.[36]

During the Marikana Commission, it also emerged that Lonmin management solicited Lonmin shareholder and ANC heavyweight, Cyril Ramaphosa, to coordinate "concomitant action" against "criminal" protesters and is seen by many as therefore being responsible for the massacre.[37][38] Submissions by the South African Police Service accused Lonmin of being responsible for the violence because of their failure to negotiate with striking miners.[39]

2014 South African platinum strike

[edit]
Main article: 2014 South African platinum strike

In late January 2014 thousands of employees belonging to Lonmin went on strike, demanding a basic salary of R12,500 ($1,180). This amount excludes so-called "living out allowances", for staff who choose not to stay in mine housing on the mine property. This is the same salary for which striking miners were shot and killed by the South African Police Service (SAPS) in 2012. Most of the miners belonged to the miners' union 'AMCU' which South African politician and Commander in Chief of the Economic Freedom Fighters had vowed to sponsor in order to allow the miners to continue striking. The platinum miners were mainly based in Marikana, the town in which Julius Malema jump-started his political party and gained popularity with most of the miners.[40]

The strike, the longest in the history of South Africa, ended in late June 2014 when the mineworkers union signed a 3-year settlement deal with the mine owners which saw the lowest paid workers, whose basic salary was less than R12,500, increased by R1,000 ($95) a month for two years, and by R950 per month in the third year. The agreement also ensured no platinum worker would earn less than R8,000 as a basic salary.[citation needed]

See also

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References

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[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia

Lonmin

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from Grokipedia
Lonmin plc, originally incorporated in 1909 as the , was a British-based that refocused on metals (PGMs) production after divesting non-core assets in 2000. Operating primarily from the in , including the Marikana and Mogalakwena mines, Lonmin ranked as the world's third-largest primary producer. The faced significant challenges from volatile PGM prices and recurrent labor unrest, culminating in its acquisition by in June 2019 via an all-share deal valued at around £285 million. A defining controversy was the 2012 Marikana incident at its mine, where a escalated into violence, resulting in 34 miners killed by police gunfire and 10 other deaths, including security personnel and officers, amid prior clashes involving armed workers.

History

Origins and Formation

The London & Rhodesia Mining & Land Company Limited was incorporated on 8 October 1909 in the to pursue mining operations and land acquisitions primarily in (modern-day ) and adjacent regions, marking the foundational entity that would evolve into Lonmin. Initially focused on diverse mineral exploration and agricultural ventures, the company expanded amid the colonial resource boom but faced challenges from political instability and economic shifts in during the mid-20th century. Under the aggressive management of , who assumed control in following a proxy battle, the renamed plc transformed into a sprawling multinational conglomerate with interests spanning , , , and trading across and beyond. By the , however, 's diversified structure drew criticism for underperformance and issues, prompting strategic ; in January 1996, the board announced plans to demerge its division to unlock and streamline operations. This demerger process accelerated in 1998, when Lonrho spun off its non-mining African trading operations as Lonrho Africa plc on 26 February, allowing the parent entity—still operating as Lonrho plc—to concentrate on extractive assets, particularly metals (PGMs) in South Africa's Bushveld Complex. In early 1999, the company rebranded as Lonmin plc to signal its renewed mining focus, followed by the divestiture of non-PGM holdings, such as Duiker Mining Ltd. in 2000, solidifying its identity as a specialized PGM producer with operations centered on high-grade platinum reefs.

Growth and Key Acquisitions

Lonmin's growth phase intensified following the 1999 rebranding from plc to Lonmin plc, which marked a deliberate pivot toward core mining operations, particularly metals (PGMs) in , amid divestitures of diversified non-core assets like trading arms and coal interests. This refocus built on earlier expansions under , including the development and control of the Western Platinum mines on the Bushveld Complex, which by the late had positioned the company as the world's third-largest producer with annual output surpassing 250,000 ounces. A pivotal expansion occurred in with the establishment of the Pandora joint venture alongside Anglo American Platinum, targeting untapped PGM deposits in the Eastern Limb of the Bushveld Complex to augment Lonmin's resource pipeline and production potential. The company's most significant acquisition during this period came in 2005, when Lonmin purchased Southern Platinum Corp for a total consideration of US$263 million, encompassing US$190 million in equity, US$58 million in assumed debt, and a US$15 million off-take agreement for Messina concentrates with . This deal granted Lonmin control over the Messina platinum mine in province, approximately 300 km north of , adding substantial PGM reserves and enabling operational synergies through integration into its existing Bushveld portfolio; South African competition authorities approved the transaction in 2005, subject to conditions preserving market competition.

Financial Struggles and Acquisition by

Lonmin faced mounting financial pressures from the late 2000s onward, exacerbated by the 2008 global financial crisis, which triggered a sharp decline in prices and elevated operational costs in South Africa's mining sector. The company's shares reached their lowest levels since 1979 by mid-2015, reflecting accelerated cash burn compared to peers amid persistently low metal prices and rising labor expenses. Between 2010 and 2013, investor confidence eroded due to multiple rights issues and the suspension of dividends, forcing Lonmin to seek shareholder bailouts on at least two occasions in the preceding seven years to sustain liquidity. These challenges intensified with operational disruptions, including strikes that contributed to profit volatility; for instance, underlying operating profits halved to $34 million in the six months to March 2014 from $93 million the prior year. By fiscal 2012, Lonmin reported a $698 million annual loss, prompting an $817 million to reduce debt burdens. Pre-tax losses widened further to $199 million in the six months to March 2017, up from $21 million the year before, as the company repeatedly negotiated waivers to avoid breaching debt covenants amid thin margins and high leverage. In response to these ongoing difficulties, Sibanye-Stillwater launched a recommended all-share offer for Lonmin on December 14, 2017, valuing each Lonmin share at approximately 86.3 pence based on prevailing exchange rates and share prices at the time. The deal, structured as a $286 million takeover, received shareholder approval on May 28, 2019, following amendments to address valuation concerns from key investors. Completion occurred on June 10, 2019, integrating Lonmin's assets—primarily its Marikana operations—into Sibanye-Stillwater, with provisions for repaying a $150 million term loan and canceling related facilities upon closing. This acquisition effectively ended Lonmin's independent operations after over a century, consolidating South Africa's platinum group metals production under fewer entities.

Operations

Core Mining Assets

Lonmin's core mining assets were concentrated in the Marikana mining complex, located in the Marikana district approximately 40 km east of in South Africa's North West Province, within the western limb of the . This complex represented about 95% of Lonmin's total output and comprised interlinked underground operations targeting metals (PGMs) primarily from the Merensky and UG2 reefs. The Marikana operations were divided into two primary subsidiaries: Western Platinum Limited (WPL) and Eastern Platinum Limited (EPL), which together included up to 13 major shafts and inclines, along with supporting infrastructure such as eight concentrators, a smelter, and a base metals refinery. Key components encompassed the Karee Mine, Western Platinum Mine, and Eastern Platinum Mine, with access via shallow inclines and deeper vertical shafts at average depths of around 500 meters. Mining methods were predominantly underground, employing conventional breast mining and hybrid techniques for simultaneous extraction of Merensky and UG2 layers, supplemented by limited opencast operations in earlier phases. Specific active shafts included high-output ones like K3, Rowland, and 4B, while others such as K4 were placed on care and maintenance by 2012 due to operational challenges. The complex featured 10-11 operational shafts at peak, with and Saffy focused exclusively on UG2 reef extraction. Ownership of the mining rights was held primarily by Lonmin at 82%, with the remaining 18% attributable to Resources, a partner. As of 2018, Lonmin's attributable mineral reserves across its assets totaled 31.2 million ounces of 3PGE+Au (, , plus ), with Marikana specifically holding proven and probable reserves of 29.9 million ounces of PGMs from 227.2 million tonnes of ore graded at 4.09 g/t 4E. These assets underscored Lonmin's position as a major PGM producer until its acquisition by in 2019.
Key Shafts and FocusMining Reefs TargetedStatus (Pre-2019)
K3, RowlandMerensky and UG2Active
E3, SaffyUG2 onlyActive
K4Merensky and UG2Care and maintenance
4BMerensky and UG2Active

Production Processes and Technological Advancements

Lonmin's production processes for platinum group metals (PGMs) primarily involved underground mining in the Bushveld Igneous Complex, targeting the UG2 chromitite layer and Merensky Reef, with over 75% of output sourced from UG2 ore by the early 2010s. Ore extraction utilized conventional breast stoping and hybrid methods in multi-shaft operations at sites like Marikana and Limpitlaw, yielding run-of-mine ore that underwent primary crushing, secondary milling, and flotation to produce a PGM concentrate containing approximately 200-300 grams per tonne of 4E PGMs (platinum, palladium, rhodium, iridium). This concentrate was then smelted in submerged arc furnaces to generate converter matte, which fed the base metal refinery for separation into nickel sulfate crystals, copper cathodes, and a PGM-rich residue via pressure leaching, selenium removal, and electrowinning steps. Final PGM refining employed a precipitation process to isolate individual metals, distinguishing Lonmin from peers using solvent extraction. Technological advancements at Lonmin emphasized adapting to UG2-dominant feeds, which posed challenges due to higher content and lower PGM grades compared to Merensky . By the early 2000s, Lonmin pioneered smelter modifications, including off-gas handling systems and milling for chrome recovery, enabling efficient processing of UG2-rich concentrates ahead of other producers. In , a 2005 partnership with targeted , aiming for 50% of underground production via trackless by 2010 to reduce manual labor risks and improve recovery rates, though implementation faced delays from labor disputes and infrastructure constraints. Process control advancements included integration for mill and flotation optimization, enhancing throughput at the Marikana facility, which accounted for over 95% of output. These efforts supported Lonmin's fully integrated operations but were hampered by high energy costs and variability, contributing to production variability in the .

Resource Reserves and Output Metrics

Lonmin's mineral resources and reserves were concentrated in the , primarily at its Marikana operations, encompassing the and UG2 chromitite layer, with smaller contributions from projects like Akanani, , and the Pandora joint venture. As of 30 September 2018, attributable mineral resources stood at 160.8 million ounces (Moz) of 3PGE+Au (, palladium, rhodium, plus gold), down from 178.3 Moz in 2017, reflecting depletion, reclassification, and economic cut-off adjustments. Mineral reserves totaled 31.2 Moz of 3PGE+Au in 2018, marginally lower than 31.8 Moz in 2017, with the majority (30.5 Moz) at Marikana, including 18.5 Moz attributable to .
YearMineral Resources (3PGE+Au, Moz)Mineral Reserves (3PGE+Au, Moz)
201518132
2016180.631.7
201718336
2018160.831.2
These figures were reported under SAMREC Code guidelines, using long-term PGE prices such as $1,000–$1,200 per ounce for platinum and economic factors including a ZAR:USD exchange rate of 13.30. Resources at Marikana included 33.4 Moz on the Merensky Reef and 73.5 Moz on UG2, while reserves focused on economically viable portions, excluding undeveloped projects like Akanani due to higher stripping ratios and costs. In terms of output, Lonmin's production centered on PGMs, with as the primary metal. For the ended 30 September 2018, saleable refined production reached 678,588 ounces, alongside 315,486 ounces of and 103,782 ounces of , contributing to total refined PGM output of 1,318,618 ounces (6E basis, including minor metals). This represented a slight decline from 2017, when refined output was 687,529 ounces and total PGMs 1,320,802 ounces, impacted by labor disruptions, shaft closures, and efforts to rationalize high-cost Generation 1 operations. Monthly ore throughput at key shafts like and K4 targeted 57,000–225,000 tonnes, predominantly from UG2 (over 75% of feed), yielding built-up grades of 4–6 g/t 3PGE+Au. Bulk retreatment supplemented output, adding approximately 14,593 ounces of total PGMs in 2018. Following 's acquisition in June 2019, Lonmin's assets integrated into broader operations, with Q2 2019 production at 125,803 ounces (metals-in-concentrate).

Economic Role

Contributions to Platinum Supply and South African Economy

Lonmin was a significant contributor to global supply through its operations in South Africa's , producing approximately 679,000 ounces of refined in its fiscal year ending September 2018, alongside total metals (PGMs) output of about 1.3 million ounces. As one of South Africa's three largest producers—alongside Anglo American Platinum and —Lonmin's output helped sustain the country's dominant role, which accounted for roughly 70-75% of worldwide production during the . This positioned Lonmin's annual volumes at an estimated 10-15% of South Africa's total, bolstering supply for industrial applications such as catalytic converters and jewelry amid fluctuating global demand. In the South African economy, Lonmin supported employment for around 30,000 workers, including 23,000 direct employees and 7,000 contractors as of 2018, many in high-unemployment regions like the North West Province. The company generated revenues of $1.345 billion in 2018, with operations contributing to local procurement exceeding R5.6 billion directed toward (BEE) entities and community investments of R59 million in health, education, and infrastructure projects. Fiscal contributions included approximately $54 million in government taxes and $8 million in royalties paid to South African authorities that year, aiding public revenues from the sector, which historically provided 8-15% of GDP through direct and indirect effects. Despite challenges like labor disputes and commodity price volatility, these inputs sustained supply chains and export earnings, with PGMs forming a key pillar of South Africa's trade balance.

Financial Performance and Market Challenges

Lonmin's financial performance deteriorated significantly from the mid-2010s onward, shifting from relative profitability in earlier years to persistent losses amid volatile metals (PGM) markets. In 2010, the company reported of $1.6 billion and underlying EBIT of $228 million, reflecting stronger PGM pricing and operational stability. However, by fiscal 2014–2018, revenues fluctuated between $965 million and $1,345 million, with substantial operating and net losses driven by impairments and cost pressures, except for a modest profit recovery in 2018.
Fiscal YearRevenue (USD m)Operating Profit/(Loss) (USD m)Net Profit/(Loss) (USD m)Net Debt (USD m)
2014965(255)(188)Not specified
20151,293(2,018)(1,661)185
20161,118(322)(342)Not specified
20171,166(1,079)(1,152)150
20181,34510142150 (repaid post-year)
Market challenges intensified these trends, primarily through sustained low PGM prices following a post-2008 peak, with averaging $1,095 per ounce in and remaining depressed due to oversupply, increased , and reduced demand from diesel vehicle regulations. Lonmin burned approximately $1.6 billion in investor-raised cash since prices plunged around 60% from prior highs, exacerbating cash outflows of $240 million annually at mid-decade spot levels. High unit costs, fueled by exceeding 8%, Rand-denominated expenses amid USD revenues, and operational disruptions like 36 safety stoppages (173 lost days) in , further eroded margins. Labor strikes compounded financial strain, with the 2014 five-month platinum sector action slashing production and triggering impairments, while underlying costs reached R14.55 billion in 2015 despite reduction efforts. Debt hovered at $150–185 million by 2017–2018 but required rights issues and restructurings, including a $400 million equity raise in 2015, to avert covenant breaches. These pressures culminated in Lonmin's 2019 acquisition by Sibanye-Stillwater via a share swap (0.967 new shares per Lonmin share), valued at around $286 million after revisions, positioning it as a distress merger to consolidate assets amid unviable standalone operations.

Labor Dynamics

Workforce Composition and Union Influence

Lonmin's workforce primarily consisted of South African nationals, with a significant proportion being migrant workers from rural areas, reflecting the structure of the platinum mining sector. As of 2011, the company employed 27,796 workers, of whom approximately 24,152 were classified as historically disadvantaged South Africans (HDSAs), predominantly black employees, comprising about 87% of the total. By 2012, Lonmin reported around 28,000 full-time employees supplemented by approximately 10,000 contractors, with contract labor accounting for 20-25% of the overall workforce since 2002. Women represented less than 8% of employees, consistent with broader challenges in increasing female participation in underground mining roles. Skill levels varied, with many workers, particularly rock drill operators, requiring adult basic education and training (ABET) programs due to low literacy rates and proficiency in multiple South African languages, hindering communication and team cohesion. Lonmin invested in skills development to address shortages, including mechanization training that improved operator competencies and reduced equipment damage. Union influence at Lonmin was dominated by the National Union of Mineworkers (NUM) until the early 2010s, when the Association of Mineworkers and Construction Union (AMCU) emerged as a rival, particularly among lower-skilled and rock drill operators. By 2012, AMCU had recruited a substantial portion of dissatisfied workers, claiming representation of up to 70% of lower-level employees at Lonmin's operations, leading to tensions and illegal strikes. In August 2013, Lonmin formally recognized AMCU as the majority union after NUM failed to maintain sufficient membership, averting further strike threats and marking a shift in . This transition amplified AMCU's leverage in wage negotiations and dispute resolution, contributing to sector-wide instability, as evidenced by AMCU's role in mobilizing workers during labor actions and opposing retrenchments tied to financial pressures. AMCU's ascendancy reflected broader dissatisfaction with NUM's perceived alignment with management, enabling more militant representation but also heightening risks of production disruptions.

Negotiation Practices and Dispute Resolution

Lonmin's negotiation practices with labor unions emphasized adherence to South Africa's Labour Relations Act, which mandated through recognized unions and prohibited direct engagement with workers during unprotected strikes. The company primarily negotiated wage increases, working conditions, and recognition rights at the enterprise level, often involving the National Union of Mineworkers (NUM) as the dominant partner until the rise of the Association of Mineworkers and Construction Union (AMCU). In multi-employer contexts, such as the 2014 platinum sector strike, Lonmin participated in joint bargaining forums with peers like Anglo American Platinum and to standardize offers and avoid undercutting competitors. Dispute resolution mechanisms relied heavily on the Commission for Conciliation, Mediation and Arbitration (CCMA), which handled conciliation for interest disputes like wage demands and arbitration for rights disputes, including union recognition thresholds. Collective agreements with unions incorporated internal grievance procedures, but these proved insufficient during inter-union rivalries, leading to CCMA interventions; for instance, in 2013, the CCMA postponed hearings on AMCU's recognition dispute with Lonmin, NUM, and others amid ongoing unprotected actions. Lonmin invoked legal protections against unprotected strikes, as in the 2012 Marikana incident, where it refrained from bilateral talks to preserve bargaining structures, resulting in escalated tensions resolved only post-police intervention via mediated wage pacts. Specific resolutions included the September 18, 2012, agreement following Marikana, which reaffirmed existing structures without new concessions to unprotected strikers, signed with NUM and others while excluding AMCU initially. By June 27, 2014, Lonmin and AMCU concluded a mediated settlement to the five-month strike, incorporating phased adjustments and recognition commitments after CCMA-facilitated talks, though subsequent rulings invalidated certain deductions under the pact. These processes highlighted systemic challenges, including union fragmentation that undermined centralized bargaining and prolonged disputes, as evidenced by repeated CCMA referrals for interpretation conflicts in agreements lacking robust internal resolution clauses.

2012 Marikana Strike and Police Intervention

The 2012 Marikana strike at Lonmin's mine in , , began as an unprotected action on August 9–10, when approximately 3,000 workers, primarily rock drill operators, downed tools and gathered on a nearby hill known as the koppie at Wonderkop. The strikers demanded a monthly basic salary of R12,500, up from their existing earnings of around R4,000–R5,000, citing inadequate compensation relative to hazardous conditions and comparisons to wage hikes at rival mines like . Underlying factors included inter-union rivalry between the dominant National Union of Mineworkers (NUM), which opposed the strike and lacked leverage to meet demands under existing agreements, and the emerging Association of Mineworkers and Construction Union (AMCU), alongside Lonmin's failure to fulfill commitments in its Social and Labour Plan, such as converting only 60 of 114 hostels and building just 3 of 5,500 promised family units by mid-2012. Lonmin management declined direct negotiations with the strikers, adhering instead to established bargaining forums, while production halted on amid escalating tensions. Violence preceded the main police intervention, with strikers arming themselves with traditional weapons such as pangas (machetes), knobkerries, and some firearms to enforce the through intimidation. On August 10, two miners were killed by live during clashes near a NUM office. Between August 11 and 13, further confrontations resulted in 10 deaths, including four miners, two (SAPS) officers, and two Lonmin security guards, as strikers blocked roads and clashed with non-strikers and authorities. On August 13, a police attempt to disperse the group using and grenades led to the killing of three additional strikers and two officers in close-quarters fighting. These incidents heightened fears of an armed standoff, with strikers issuing threats of confrontation and refusing mediated talks involving unions and Lonmin executives. The decisive police intervention occurred on August 16, when over 400 SAPS members, including tactical units equipped with R5 rifles, executed a hastily planned "tactical option" to disarm and disperse the strikers at two locations near the koppie. At Scene 1 (a kraal area), the Tactical Response Team fired 328 rounds in 8–12 seconds after deploying barbed wire and perceiving an imminent charge by armed strikers, killing 12–16. At Scene 2 (Koppie 3), uncoordinated units fired 295 rounds following failed dispersal attempts, resulting in 17 more deaths as strikers advanced toward police lines. SAPS leadership justified the use of maximum force as self-defense against an armed group that had already killed officers and security personnel, with National Commissioner Riah Phiyega stating that protesters had charged while firing shots and brandishing weapons. The operation breached principles of minimum force and lacked adequate command structure, as noted by the subsequent Farlam Commission of Inquiry. The August 16 shooting killed 34 strikers, injured 78 others, and led to 259 arrests, bringing total strike-related deaths to 44 including prior violence. The Farlam Commission, appointed to probe the events, found that while individual officers acted in perceived self-defense against advancing threats at key moments, the overall planning was defective, with excessive ammunition use and violations of operational protocols contributing to the tragedy. It criticized Lonmin's inadequate response to unrest, including security lapses and unaddressed grievances like housing, recommending prosecution probes into the company's reckless conduct and enforcement of its social obligations. No SAPS members were killed during the operation, though the commission highlighted misleading post-event narratives by police leadership. The strike persisted until September 18, resolving with wage increases of 11–22%—short of the R12,500 demand—but the police action marked a pivotal escalation in the dispute.

2014 Platinum Sector Strike Involvement

The 2014 platinum sector strike, which began on January 23 and involved approximately 70,000 workers across South Africa's major producers, significantly impacted Lonmin's operations in the area. Lonmin employees, primarily represented by the Association of Mineworkers and Construction Union (AMCU), joined the unprotected in early , halting production at key shafts such as those at Marikana. The walkout stemmed from demands for a basic monthly salary increase to R12,500, amid ongoing tensions following the 2012 Marikana events where AMCU had supplanted the National Union of Mineworkers as the dominant union at Lonmin. Negotiations between Lonmin, alongside Anglo American Platinum and , and AMCU proved protracted, with the companies offering phased increases tied to productivity and benefits rather than immediate blanket hikes. By May, AMCU rejected a proposal for R12,500 attainment by 2017, prolonging the deadlock despite government mediation efforts. Incidents of marred the strike at Lonmin sites, including the killing of two workers in May clashes, exacerbating operational disruptions and highlighting persistent labor militancy. The strike concluded on June 23 when AMCU accepted a deal providing for the R12,500 target within three years through annual increases averaging 8-10% plus allowances. For Lonmin, the five-month disruption resulted in $322 million in extraordinary costs, a 41% drop in platinum production during the affected half-year, and earnings halving from $93 million to $34 million. Unit costs per platinum group metal ounce surged 60%, contributing to broader sector losses estimated at over R9 billion for producers while workers forwent nearly R4 billion in wages. The event underscored vulnerabilities in South Africa's platinum supply, which constitutes 40% of global output, and intensified scrutiny on union bargaining tactics post-Marikana.

Controversies

Violence in Labor Disputes: Multiple Perspectives

Violence in Lonmin's labor disputes, particularly during the 2012 Marikana events, involved armed confrontations, killings of non-strikers, and subsequent that resulted in 34 miner deaths on August 16. Prior to the , strikers—primarily rock-drill operators demanding wage increases from around R4,000 to R12,500 monthly—had engaged in , including the murders of two Lonmin security guards on August 12, two police officers on August 13, and attacks on National Union of Mineworkers (NUM) officials perceived as opposing the . These acts were linked to inter-union rivalry between the NUM and the emerging Association of Mineworkers and Construction Union (AMCU), with strikers wielding traditional weapons like pangas and spears, often gathered at a hilltop koppie. From the management's perspective, the violence stemmed from "criminal" elements among strikers who rejected established , intimidated non-strikers, and created anarchy, necessitating intervention to protect operations and lives; Lonmin executives, including director , urged police action against what they termed a "plainly violent situation" fueled by unprotected actions outside union mandates. This view attributed unrest to AMCU's aggressive recruitment tactics and failure of workers to use legal dispute channels, exacerbating a pattern of militancy in South African . Workers and supporting unions, conversely, framed the violence as a desperate response to exploitative conditions, including stagnant low wages amid rising living costs, reliance on precarious contract labor (comprising nearly a third of Lonmin's workforce), and perceived disrespect from management and the dominant NUM, which they accused of colluding with employers to suppress demands. AMCU leaders highlighted how failed negotiations and historical underpayment—rooted in post-apartheid inequalities—pushed unarmed protesters (despite arms possession claims) into confrontation, with prior deaths blamed on NUM-aligned attackers targeting AMCU supporters. The Farlam Commission of Inquiry, established post-Marikana, attributed the escalation to multiple failures: flawed police tactical planning that cornered strikers without dispersal options, inadequate intelligence on armed gatherings, and initial initiated by miners against security and rivals, though it cleared police of murder charges while recommending accountability for operational lapses. Broader analyses point to structural causes like in the extractive sector, where global commodity booms failed to translate to worker gains, combined with a breakdown in tripartite bargaining and echoes of colonial-era mine , underscoring how business-state disconnects amplified militancy beyond wage disputes. Similar dynamics persisted in later Lonmin-involved strikes, such as the platinum sector action, where arose from renewed wage pressures but was mitigated by industry-wide negotiations, highlighting persistent tensions without resolution.

Corporate Governance and Financialization Critiques

Critics of Lonmin's corporate governance have highlighted a pattern of prioritizing shareholder returns and executive compensation over investments in worker welfare and operational stability, particularly in the years leading up to the 2012 Marikana strike. Between 2008 and 2011, the company distributed approximately $607 million in dividends to shareholders, including major investors like Glencore and Investec, despite chronic underinvestment in promised housing for its workforce and amid rising labor tensions. This approach was seen by activists and analysts as emblematic of financialization, where short-term financial engineering—such as dividend payouts funded partly by debt—exacerbated vulnerabilities in a volatile platinum market, leaving Lonmin with a weakened balance sheet by 2012. Financialization critiques intensified around Lonmin's debt accumulation and profit allocation strategies, which allegedly diverted resources from core operations to benefit investors and executives. From to , Lonmin paid out $510 million in dividends while amassing debt used for share buybacks and special payouts, rather than addressing deficits like and that contributed to worker grievances. The Alternative Information and Development Centre (AIDC) accused Lonmin of employing to shift profits out of , estimating that retained earnings could have covered workers' wage demands during the 2012 strike without financial strain. Such practices, critics argued, reflected a governance model overly attuned to pressures, where price fluctuations amplified risks without corresponding safeguards for long-term sustainability. Executive remuneration drew sharp rebukes for misalignment with performance and social outcomes. In 2019, shareholders, including South Africa's Public Investment Corporation holding a 29% stake, voted against Lonmin's remuneration report at the annual general meeting, protesting packages that rewarded directors amid operational losses and job cuts. Earlier, CEO Ian Farmer received bonuses totaling millions despite safety lapses and production halts; one analysis equated the value of his pay to what an average underground worker would earn over 325 years. Governance defenders, including company filings, countered that incentives tied to production targets aimed to align management with shareholder value, but detractors from labor advocacy groups viewed this as perpetuating inequality, with executive gains decoupled from resolutions to community and environmental compliance failures documented in World Bank investigations. These critiques underscore broader concerns about Lonmin's board oversight, where British-listed status facilitated financial maneuvers that strained South African operations. Post-Marikana inquiries, such as those by the Compliance Advisor Ombudsman, faulted for inadequate monitoring of social license risks, including unfulfilled housing plans under mining charters, which eroded trust and fueled disputes. By 2015, persistent high-cost production and debt servicing—exacerbated by earlier payouts—prompted a dilutive share issuance, further eroding confidence and highlighting how priorities had undermined resilience. While Lonmin's defenders emphasized market-driven necessities, the consensus among critical reports is that governance shortcomings amplified causal links between financial decisions and on-ground failures in labor and community relations.

Environmental and Community Impact Assessments

Lonmin's platinum mining operations in , particularly at Marikana and , were subject to Environmental Management Programme Reports (EMPRs) mandated under the Mineral and Petroleum Resources Development Act, which required assessments of risks and impacts including air emissions, water usage, , and land rehabilitation. Independent analyses of Lonmin's Reports revealed consistent exceedances of dust emission limits—both residential and industrial standards—for most years between 2003 and 2012, alongside sulphur dioxide (SO₂) emissions surpassing permitted thresholds in the majority of those years. Annual unplanned discharges into local rivers occurred from 2003 to 2012, with calcium sulphite waste from scrubbing processes contaminating , , and . A notable incident in February 2018 involved a Level 4 environmental spill of approximately 4,000 tonnes of slurry from a facility into a of the Maretlwana River, prompting a remediation plan submitted to the Department of Mineral Resources, with completion targeted for 2019. Lonmin maintained an ISO 14001-certified across all operations since 2003, reporting SO₂ emissions at the smelter averaging 7.2 to 13.06 tonnes per day in 2018 and committing to compliance with National Environmental Management: Air Quality Act standards by April 2020; however, community and NGO assessments highlighted persistent non-compliance and inadequate mitigation. consumption stood at 6.23 cubic meters per metals ounce in 2018, with total freshwater use of 8.2 million cubic meters and 14.1 million cubic meters recycled or reused at Marikana, though concerns persisted. Community impact assessments, including Social and Labour Plans (SLPs), evaluated housing, access, and effects, but revealed significant shortfalls. In Marikana, affected residents filed complaints with the IFC's Compliance Advisor Ombudsman in 2015, citing from dust and smelter emissions causing respiratory issues like coughing and , alongside contamination affecting daily life. Lonmin pledged 5,000 houses by 2011 under its SLP but delivered only three, while converting just 60 of 114 hostel blocks; and commitments saw only R14.5 million spent of a promised R25 million, leaving residents reliant on purchased at R1.00–1.50 per 20-liter and walking 10–15 minutes for access. Community perception surveys from 2004–2008 indicated no improvement in views of , , and conditions since 2005, attributing ongoing issues to activities. Lonmin responded with community investments totaling R59.5 million in 2018 for like upgrades (R21 million for three s) and construction, alongside launching the "Buang Le Rona" grievance mechanism in April 2018 to address local concerns. Despite these efforts, independent evaluations, such as those by the Bench Marks Foundation, underscored a gap between reported corporate initiatives and verifiable outcomes, with limits routinely breached and perceptions remaining negative.

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