Lonmin-Sibanye: Precious matter of 30,000 jobs at stake
Bump in palladium price has helped of late, but Lonmin really, badly needs the Sibanye takeover to go through
It’s difficult to get a good look at the performance of the Lonmin assets as the miner awaits finalisation of the takeover bid by Sibanye-Stillwater.
The increased palladium and rhodium prices in the basket of platinum group metals (PGMs) that SA’s miners produce have come at a critical time for the industry. A decade of subdued platinum prices – swamped by electricity, labour and other input costs – has left the SA PGM industry in a difficult position, unable to spend capital on optimal growth, forcing assets sales and shaft closures and the loss of jobs.
It’s against this backdrop that a number of efforts at Lonmin, the world’s third-largest platinum miner, raised billions of rands from shareholders to no avail.
It has been unable to complete vitally important projects such as the partially built K4 shaft, which promised to turn around the company’s fortunes. Lonmin was right up against the wall and more than 30,000 jobs were at risk.
Sibanye came riding in as the white knight, offering an all-share takeover, saving mines, jobs and, most importantly to Sibanye, getting its hands on a rare and expensive smelting and refining business that would set it apart from all but two of its peers, Anglo American Platinum and Impala Platinum.
Lonmin’s board has steadfastly encouraged shareholders to approve the transaction.
It was interesting that most of shareholders at Lonmin’s AGM, 74% of the two-thirds of represented shareholders, voted against approving the directors’ remuneration report. If the transaction does not go ahead, it is an issue the Lonmin board will have to address urgently.