Union opposes Lonmin-Sibanye merger
Sibanye-Stillwater CEO Neal Froneman told the Competition Tribunal at the hearing of the company’s proposed merger with Lonmin that consolidation is the ‘bitter medicine’ the SA platinum industry needs if it is to be saved. Business Day reports the deal would breathe new life into the financially distressed Lonmin, which has started a restructuring process that will result in 12 459 job losses.
Sibanye-Stillwater’s takeover would bring that number to 13 344, the merging parties said.
The Association of Mineworkers and Construction Union (Amcu), however, claims that bad management was the source of Lonmin’s ills and an improving outlook of the platinum price could see it recover very soon. In its submission to the tribunal, Amcu said that not only had Sibanye refused to commit any capital investments in Lonmin as part of the merger, but its involvement also caused the number of job cuts at Lonmin to rise, though the merging parties refute this.
‘Lonmin will not be exiting the market any time soon and is not a failing firm,’ Amcu said in its submission.
But Froneman said the key measure was the company’s cash balance month to month, which was just enough to ‘wash its face’.
As far as management was concerned, he said, he believed Lonmin was well run. The report says Sibanye committed to the tribunal panel that it would apply its mind to possible terms for a moratorium on job losses, and would revert today.
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