|South African strikes damage reputation of mining companies|
|Thursday, 23 August 2012 12:17|
Forty-four miners have been killed in South Africa in the past week as 3,000 platinum miners continue to strike. The violence and labour dispute has wreaked havoc on the reputation of South Africa’s mining industry and on the reputation of Lonmin, the company at the centre of the dispute.
Following the initial human and economic damage, South African mining companies will be beset by a blighted reputation in the eyes of international platinum consumers. Industry analysts have already noted that platinum may have a decreased appeal with conscious consumers, particularly affecting the jewelry industry.
it may be a long road to recovery in rebuilding the reputation of South Africa's mining companies.
Lonmin saw its share price in the FTSE 250 bottom-out from £695 on 15 August to a yearly nadir of £610 this week.
“A stable mining sector is vital to the economic future of this country. If the industry continues to be damaged by illegal actions it is not just the economy that suffers, but all our employees, their families and dependents,” CFO of Lonmin Simon Scott said. “We must start to rebuild those relationships, starting today, building back trust and trying to move forwards.”
Executive VP for Mining, Mike Munroe said in a press release that Lonmin will reinforce its standing commitment to dialogue with its stakeholders in the near future.
Lonmin called for all its striking workers to return to work on 21 August in an attempt to stabilise the situation and reassure foreign interests in South Africa’s mining industry. Two other mining companies, including one owned by Anglo-American, fielded strike threats from workers this week.