Lonmin shares crash on fear Amcu will scupper crucial Sibanye deal
Number of job cuts could become a sticking point, after the union’s submission to the Competition Tribunal
Lonmin’s share price fell 8.85% to R7 on Wednesday morning on fears its largest union will block its proposed acquisition by Sibanye-Stillwater. On Tuesday the Association of Mineworkers and Construction Union (Amcu) asked the Competition Tribunal to make it a condition that the merged company should not be allowed to cut more than 10,000 jobs. Lonmin has proposed 12,459 job cuts at mines that will run out of commercial deposits in the next three years. Lonmin has already cut about 2,000 jobs to weather a rout in platinum prices.
The magnitude of the planned cuts “warrant that the transaction be prohibited”, Amcu said in submissions to the tribunal. The union also said that the outlook for platinum group metals has improved and a weaker rand means Lonmin could operate profitably. If the merger does not take place, Lonmin would require $450m-$500m to remain in operation, CFO Barrie van der Merwe said at the tribunal hearing Monday. The company was not in a position to return to...