Workers at Lonmin PLC (LON:LMI), the world's third-biggest platinum producer, walked off the job Tuesday morning while protesting the killing of a union worker, halting production at the company's massive platinum mine in Marikana, South Africa.
"Employees arrived at work but did not proceed underground," said Lonmin spokesperson Sue Vey, according to media reports. She said that none of the company's 13 shafts were operational.
The National Union of Mineworkers (NUM) believes the strike against Lonmin stems from a violent weekend in Rustenburg where a regional organizer for NUM's rival union, Association of Mineworkers and Construction Union (AMCU), was killed near a mine belonging to a different company, Anglo American Platinum Ltd. AMCU's Mawethu Steven, 46, was the union's regional organizer.
Hours later, two other men were killed at Lonmin's Marikana mine. However, neither police nor union officials know the union affiliation of those men, according to the Wall Street Journal.
The platinum, palladium, rhodium and gold mine holds 1.57 million ounces (oz) of mineral reserves, according to Mining Technology. Lonmin employs 27,000 people and 10,000 contractors. The wildcat strike -- an impromptu walkout not planned by the union -- comes just ahead of wage negotiations between the company and labor unions to replace existing two-year wage agreements. It is also in the wake of a large strike at the same site in 2012 that resulted in a police shooting that left 34 people dead and sparked labor unrest across South Africa's mining sector.
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A NUM spokesman said the workers intend to remain on strike until a memorial for the organizer is held. The Lonmin spokeswoman said the company planned to meet with union organizers on Tuesday afternoon.
Unrest and disruption of precious metal production represent a major risk for South Africa's economy. Following violent strikes in 2012, Standard & Poor’s, Moody’s Investors Service and Fitch Ratings all downgraded their credit ratings for South Africa.
Lonmin shares were down more than 7 percent in London in the afternoon.