Disgruntled employees have once again disrupted mining operations on South Africa’s Bushveld Complex, with Platmin (PPN-T) being the latest target.
The platinum group metals (PGMs) producer reports that it suspended mining operations on June 23 at its Pilanesburg mine, after employees of mining contractor MCC started an illegal strike that allegedly included damaging equipment and property, and intimidating supervisors.
The company is using the mine’s stockpiled ore to continue processing operations while the mining is suspended.
Platmin’s stock has dropped 9¢ to 57¢ since the strike was announced. The company has a 52-week share price range between 53¢ and $1.17, and has 910.4 million shares outstanding.
The news comes less than two months after Eastern Platinum (ELR-T) reported a series of illegal strikes at its Crocodile River PGMs mine on the Bushveld.
At Crocodile, employees apparently drove company vehicles through the security gate on May 6 and “embarked on unprotected industrial action.” Eastplats reports that underground services at both its Zandfontein and Maroelabult mines were damaged, including the electrical, ventilation and pumping equipment, with the mine then flooding. As part of the strike, 155 employees occupied the mine.
The events followed the rejection of the company’s latest wage offer by members of the National Union of Mineworkers.
Eastplats resumed full operations at Crocodile on May 20 after reaching a two-year wage agreement with the union. The agreement amounted to a cost-to-company wage increase of 10% year-on-year, while the company reckons the work stoppage reduced output by 7,000 oz. PGM.
However, Eastplats now looks to be the subject of a class action lawsuit that alleges it failed to disclose “material changes” at its Crocodile River mine.
The $66-million lawsuit, filed by Siskinds LLP of London, Ont., deals not with the strike but with the period between Jan. 1 and April 15 that saw reduced production from Crocodile River.
Eastplats produced 25,387 oz. in the first quarter of 2011, a 16.8% drop from the same quarter the year before and a 22% drop from the previous quarter.
The company stated that work on shoring up the roof supports at its mine, combined with the “traditional slow start in January,” resulted in a significant decrease in production for the quarter. At the time the company stated it was confident the impact was short term, but that was before the strike.
Eastplats’ share price dropped 20¢, or 15.4%, to $1.10 after the output numbers were released, with 25.8 million shares traded. The company’s stock dropped a further 14¢, or 13.5%, to 90¢ with 61.5 million shares on news of the strike action. The company closed at 80¢ the day the lawsuit was announced, and has 908.2 million shares outstanding.
Elsewhere on the Bushveld, Lonmin (LMI-L) cut its 2011 production target by 30,000 oz. platinum and increased its expected unit costs by 8% after a strike at its Karee mine on May 17. The company responded to the illegal strike by firing all 9,000 workers, and then went about rehiring many of them. It reported on June 10 that it had “largely completed the process of recruitment, and production at Karee has resumed and is ramping up.”