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Lonmin

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Lonmin plc
Company typePublic company
LSE: LMI, JSE: LON
IndustryMining
Founded1909
HeadquartersLondon, England, UK
Key people
Brian Beamish (Chairman)
Ben Magara (CEO)
Simon Scott (CFO)
Mahomed Seedat (COO)
ProductsPlatinum Group Metals
RevenueUS$965 million (2014)[1]
US$52 million (2014)[1]
US$(203) million (2014)[1]
Websitewww.lonmin.com

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

Lonmin rose to international attention following the Marikana miners' strike in August, 2012, in which over 100 striking Lonmin employees were shot (36 killed, 78 wounded) by South African Police Service officers.

History

The Company was incorporated in the United Kingdom on 13 May 1909 as the London and Rhodesian Mining and Land Company Limited.[3]

Businessman Tiny Rowland was recruited as chief executive in 1962.[4] 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.[4]

In 1968, Lonrho acquired Ashanti Goldfields Corporation, a gold mining business in Ghana.[5] The former Conservative minister Duncan Sandys, a director of Ashanti, became Lonrho's chairman in 1972.[6]

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."[7]

By 1979, Lonrho employed 140,000 people worldwide.[8]

During the 80s, Lonrho entered the British newspaper market, buying the Sunday newspaper The Observer in 1981[9] and the newly launched daily Today in 1986.[10] Today was sold to News International the following year,[11] while the Guardian Media Group bought the Observer in 1993.[9]

Tiny Rowland was finally ejected from Lonrho in October 1993 after a boardroom tussle with director Dieter Bock.[12] He was replaced by Nick Morrell, a former chief executive of The Observer.[13]

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.[14] In 1999, Lonrho plc was renamed as Lonmin plc and a new era as a focused mining company began.[15] In 2000 Gordon Haslem became CEO.[16]

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.[17] Lonmin indicated that former chief strategic officer responsible for the company’s business development, Ian Farmer, would replace him.[18]

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 Global financial crisis.[19] Xstrata and its 24.9% stake in Lonmin was later acquired by Glencore on 2 May 2013.[20] 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.[21]

Farmer resigned as CEO in 2012 for health reasons.[22]

Operations

The Company is a producer of platinum group metals operating mainly in the Bushveld Complex in South Africa. It has two multi-shaft mining operations, located respectively in:[23]

role salary bonus total
Ian P. Farmer[24] Chief Executive Officer £351,538 £213,990 £565,528
Alan Ferguson[25] Chief Financial Officer £422,500 £366,344 £788,844

Strikes

Marikana miners' strike

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.[26][27] 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.[27][28]

The Marikana Massacre,[29] as referred to in the media, occurred when police broke up an occupation by striking Lonmin workers of a 'koppie' (hiltop) 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[30] and many victims were shot far from police lines.[31] 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.[32]

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.[33][34] Submissions by the South African Police Service accused Lonmin of being responsible for the violence because of their failure to negotiate with striking miners.[35]

2014 South African platinum strike

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 Malema jump started his political party and gained popularity with most of the miners.[36]

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.[37]

See also

References

  1. ^ a b c "Preliminary Results 2014" (PDF). Retrieved 30 March 2015.
  2. ^ "Contact Us." Lonmin. Retrieved on 1 January 2011. "London – Registered Office Lonmin Plc 4 Grosvenor Place London SW1X 7YL" and "South Africa – Operational Headquarters 1st Floor 34 Melrose Boulevard Melrose Arch Johannesburg Republic of South Africa"
  3. ^ Page, Melvin E., ed. (2003). Colonialism: an International Social, Cultural and Political Encyclopedia. Santa Barbara: ABC-CLIO. pp. 350–351. ISBN 1-57607-335-1.
  4. ^ a b Tiny in name, not in nature BBC News, July 1998
  5. ^ Berry Ritchie (24 October 1968). "Ashanti-Lonrho: terms agreed". The Times.
  6. ^ Duncan Sandys. A&C Black. January 2007. {{cite book}}: |work= ignored (help)
  7. ^ Tiny Rowland: African Giant, BBC News, July 1998
  8. ^ Geoffrey Jones (2000). Merchants to Multinationals: British Trading Companies in the Nineteenth and Twentieth Centuries. Oxford University Press. p. 156. ISBN 978-0-19-829450-4.
  9. ^ a b "Observer text timeline". Guardian. UK. 16 December 2008. Retrieved 18 April 2011.
  10. ^ Steve Lohr (11 November 1988). "A second life!". New York Times. Retrieved 18 April 2011.
  11. ^ "Murdoch". Ketupa. Retrieved 18 April 2011.
  12. ^ Ipsen, Erik (20 October 1993). "Boardroom rebellion demotes Tiny Rowland". International Herald Tribune. Retrieved 18 April 2011.
  13. ^ "Morrell swaps platinum for financial PR". The Telegraph. 10 December 2000. Retrieved 25 March 2013.
  14. ^ "Lonhro Africa keen not to lose its flair". Btimes.co.za. Retrieved 18 April 2011.
  15. ^ The Investment Case – Lonmin plc Moneyweb, 1 April 2011
  16. ^ "Gordon Edward Haslam". Business Week. Retrieved 25 March 2013.
  17. ^ Chanel de Bruyn. "Farmer named CEO". Miningweekly.com. Retrieved 18 April 2011.
  18. ^ Chanel de Bruyn. "Lonmin's Mills quits as Xstrata deadline approaches, Farmer named CEO". Miningweekly.com. Retrieved 18 April 2011.
  19. ^ MacAlister, Terry (2 October 2008). "Credit crisis forces Xstrata to ditch Lonmin bid". London: The Guardian. Retrieved 18 April 2011.
  20. ^ "Glencore finishes takeover of Xstrata". FT.com. 2 May 2013. Retrieved 3 May 2013.
  21. ^ "Glencore's 23.9% stake in Lonmin plc". glencore.com. 11 February 2015. Retrieved 11 February 2015.
  22. ^ "Platinum miner Lonmin CEO Ian Farmer stands down". BBC. 28 December 2012. Retrieved 18 April 2011.
  23. ^ "Current operations". Lonmin.com. Retrieved 18 April 2011.
  24. ^ "Ian P. Farmer: Executive Profile & Biography". BusinessWeek. Retrieved 17 September 2009.
  25. ^ "Alan Ferguson: Executive Profile & Biography". BusinessWeek. Retrieved 17 September 2009.
  26. ^ "NUM: Lethal force ahead of Marikana shootings was justified". Mail & Guardian. 22 October 2012. Retrieved 23 October 2012.
  27. ^ a b "Marikana prequel: NUM and the murders that started it all". Daily Maverick. 12 October 2012. Retrieved 25 March 2013.
  28. ^ "NUM: Lethal force ahead of Marikana shootings was justified | News | National | Mail & Guardian". Mg.co.za. 22 October 2012. Retrieved 25 March 2013.
  29. ^ "South Africa's ANC to discuss mine shootings row". BBC News. 27 August 2012. Retrieved 27 August 2012.
  30. ^ Striking South African miners 'were shot in the back', The Daily Telegraph, 27 August 2012
  31. ^ The murder fields of Marikana: the cold murder fields of Marikana, by Greg Marinovich, The Daily Maverick, 8 September 2012
  32. ^ "South African police open fire as striking miners charge, killing and wounding workers". The Washington Post. Associated Press. 16 August 2012. Retrieved 16 August 2012.
  33. ^ Cyril Ramaphosa: The true betrayal, by Ranjeni Munusamy, The Daily Maverick, 25 October 2012
  34. ^ 'Ramaphosa must say sorry', iAfrica.com, 24 October 2012
  35. ^ SAPS blames Lonmin for Marikana strikers deaths, Business Day, 23 October 2012
  36. ^ Gillian Parker (25 June 2014). "S. Africa Platinum Strike Ends, But Not Its Impact". Voice of America. Retrieved 29 June 2014.
  37. ^ "Platinum mine workers in South Africa return to work". Africa Leader. Retrieved 25 June 2014. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
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