Mine company listed in London and Johannesburg faces questions over massacre
By David Pallister | 12 September 2012
Lonmin is the world’s third largest producer of platinum and is based in in London. It was born out of Tiny Rowland’s conglomerate, Lonrho, dubbed in 1973 by Ted Heath, when he was UK prime minister, as the “unacceptable face of capitalism”.
Rowland was ousted in a boardroom battle in 1993. Two months before his death in 1998, the company was split in two, with Lonrho retaining all the mining assets.
The company changed its name to Lonmin a year later, and focussed exclusively on mining platinum.
“Lonmin welcomes the terms of reference announced by president Jacob Zuma” – Lonmin statement
It employs nearly 28,000 workers at its platinum shafts in the Bushveld Complex of the South Africa’s North West province. Before the end of apartheid in 1994, its operations included the notorious Bantustan, or black African homeland, of Bophuthatswana.
Listed on the London and Johannesburg stock exchanges, Lonmin had revenues of just under $2 billion in the financial year to September 2011, and pre-tax profits of $293 million.
Senior management includes several South Africans with dual British nationality. The chief executive, Ian Farmer, is an old Lonrho hand, joining in 1986. Last year, he received a salary package of £1.2 million.
The company announced last month that he is in hospital with a serious illness and Simon Scott, chief financial officer, has taken over his responsibilities.
The non-executive directors include Karen de Segundo, who is Dutch and worked for Shell for 30 years, rising to be chief executive of the oil giant’s global ‘gas and power’ business. She also chairs the corporate social responsibility committee as a director of British American Tobacco.
Cyril Ramaphosa, the charismatic secretary general of the ruling African National Congress during negotiations to end apartheid, is another Lonmin non-executive director. He is also a former general secretary of the National Union of Mineworkers.
Although many expected that he would continue in a political role, he turned instead to business. He was nominated to the board by his company Shanduka, Lonmin’s principal ‘black economic empowerment’ partner.
The chairman, Roger Phillimore, was appointed in 2009 after serving as a non-executive director since 1997.
Last month, paramilitary police shot dead 34 striking miners at Lonmin’s mine in Marikana. It marked the worst use of lethal force against civilians in South Africa since the end of apartheid.
Dire conditions that fuelled unrest among communities around Lonmin’s operations in South Africa were revealed in an internal report commissioned by the company.
Following the killings, Phillimore distanced the company from any responsibility, saying: “The South African Police Service has been in charge of public order and safety on the ground since the violence between competing labour factions,” adding, “It goes without saying that we deeply regret the further loss of life in what is clearly a public-order, rather than labour-relations, associated matter.”
However, the terms of reference in the judicial commission of inquiry set up by Jacob Zuma, South Africa’s president, includes a comprehensive list of questions about Lonmin’s conduct:
• whether it exercised its best endeavours to resolve any disputes that may have arisen between Lonmin and its labour force on the one hand, and generally among its labour force on the other;
• whether it responded appropriately to the threat and outbreak of violence that occurred at its premises;
• whether the company, by act or omission, created an environment that was conducive to the creation of tension, labour unrest, disunity among its employees or other harmful conduct;
• whether it employed sufficient safeguards and measures to ensure the safety of its employees and property and the prevention of the outbreak of violence between any parties.
In response, the company said in a statement: “Lonmin welcomes the terms of reference announced by president Jacob Zuma for the judicial commission of inquiry on the Marikana tragedy, and will co-operate fully with the commission.”
Zuma has asked the commission to report within five months, but the pressing problem for Lonmin is to persuade its workers back under ground. Production is halted, the strike is nearing its fifth week, and the rock-drill operators who began it are in no mood for compromise in their wage demands.