Lonmin Announces Significant Change
Roger Phillimore, Chairman of Lonmin, today committed the Company to a process of fundamental change to rebuild trust with employees and employees' representatives. Speaking at the Platinum Group Metals Company's annual general meeting he said that Lonmin's Board was determined "to improve the creation of value for all our stakeholders, and by doing that to enhance our long-term wealth-creation and investment potential."
Mr Phillimore told shareholders that the Company and the industry needed to address the fault lines in South African society that were laid bare after the tragic events at Marikana in 2012. He stated that the mining industry had to work with the Government, unions and employees to rebuild trust and strengthen relationships in the mining sector aligned with the vision and objectives set out in the National Development Plan. He said it would "require a fundamental change in the way we do things. We require a collaborative model of decision-making that will help to resolve problems and disagreements before they turn into violence."
"The mining industry in South Africa is at a cross roads. It is imperative that Lonmin does its part to contribute to improved relations with its employees both in and outside the workplace. We are committing to a long-term process of fundamental change," Mr Phillimore said.
The Company has established dedicated project teams which are looking at each of the following key areas:
1. Employee relations - in particular, a renegotiation of its current union recognition dispensation. The objective is to conclude an agreement that provides appropriate representation to all the unions and associations having the support of a significant proportion of our employee base. The Company is also participating in industry discussions for the establishment of an industry forum for centralised engagement.
2. Empowerment - amongst other proposals Lonmin is considering the implementation of an employee share ownership plan (ESOP), a community ownership trust; and closer co-operation on procurement and small medium and micro enterprise development (SMME) for the Greater Lonmin Community.
3. Migrant and local labour - the Company will review the viability of alternative shift and leave patterns that will enable employees to return to their families much more regularly than has been possible. It will also look at setting targets for the proportion of its employees who come from the local community. The Company will consult widely with all internal and external stakeholders including Government to ensure that any unintended consequences are appropriately understood.
4. Use of invested capital and infrastructure - Lonmin is investigating how to work with our unions and industry peers to find ways to make better use of our infrastructure and hence invested capital, reforming the shift system to improve the current situation. The aim is to generate the additional wealth required to provide better employment and living conditions in addition to possibly providing additional job opportunities.
5. Housing and accommodation - Lonmin will complete the conversion of all its hostels to decent and affordable family or single accommodation units by 2014. In addition, the project team will identify the most effective ways of improving employees' living conditions and create programmes to deliver on these commitments. We have launched a comprehensive review of requirements to create sustainable communities. The team will review infrastructure requirements, number, location and type of accommodation units required, the rental/ownership mix and the financial commitment necessary to achieve this. We will partner with all levels of local Government, the Department of Human Settlements and projects such as the Presidential Task team's Rustenburg living conditions initiative.
Commenting on the housing initiative Mr Phillimore said "employees must have access to decent accommodation with access to fresh water, proper sanitation and electricity."
Lonmin is committed to the substantive change required in the industry and to working with all other stakeholders to achieve this. Mr Phillimore noted that "creating functional and healthy mining communities must be a collaborative effort with Government, communities and industry to find a sustainable long-term solution. Lonmin's Board is making a clear statement of intent in respect of each of these initiatives. We have expressed no commitment on expenditure or timeline: to have done so before the necessary research and consultation with relevant stakeholders has been advanced would be rash and unconvincing."
"Dedicated working groups have been established and charged with the responsibility of advancing each of these initiatives as a matter of urgency and we will report on progress as soon as possible. The solutions that emerge must be practically achievable in the sense that they are both affordable and effective. We look forward to engaging with all our stakeholders in building a new way forward for the mining industry."
Statement issued by Lonmin, January 31 2013
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