South African miner Lonmin has confirmed today (4th November) that jobs may be cut when it announces its restructuring plans to the market in two weeks' time.

The world's third-largest producer of platinum has had a tough quarter, seeing its share price slide dramatically after Xstrata pulled out of a proposed £5 billion takeover bid last month.

Now it has confirmed in a memo to the country's Solidarity trade union that there is a "need to be smaller and more efficient" and that it will initially "focus on the senior leadership as well as London-based staff".

Structural changes such as downsizing and possible redundancies look set to be outlined when the company publishes its annual results on 18th November after a review by new CEO Ian Farmer.

Lonmin also noted in the memo that there has been "a huge slowdown in sales in the car manufacturing industry and as a consequence…a decreased demand in our product".

Although it is currently unclear how many jobs could be lost, Solidarity spokesman Jaco Kleynhans said: "It is very clear in their letter that they need to reduce their staff. They will offer voluntary packages and also say they may resort to retrenchments."

Despite the union's claims, Alex Shortland-Ball, the firm's London-based spokeswoman, refused to confirm that a letter has been sent and would only say that Lonmin is evaluating its mines.

"We are in the middle of a review of our operations looking at ways to add value and we won't be reporting back on that until the 18th of November," she said.

If redundancies do form part of the restructuring, Lonmin will become the first major miner to take such action in market conditions which have seen the platinum price halve in the past three months.



Source:

Lonmin plans job cuts to be 'more efficient' (04/11/08)
http://www.ft.com/cms/s/0/96dbfa12-a9d4-11dd-958b-000077b07658.html

Lonmin first platinum major to announce possible worker layoffs (04/11/08)
http://www.mineweb.com/mineweb/view/mineweb/en/page35?oid=72040&sn=Detail