Lonmin to shut two shafts, affecting about 6,000 jobs

Platinum producer Lonmin Plc -8.43% said on Friday it was planning to close or mothball several mine shafts, putting 6,000 South African jobs at risk, because of depressed metal prices.

The company added that it would put a number of other shafts on care and maintenance, some of which are now managed by contractors. It will cut jobs across the board to cope with a smaller production base.

The company’s CEO Ben Magara said in a statement the short term plan is necessary to ensure long term viability.

Lonmin said the planned closures would likely affect a total of 6,000 employees including contractors.

“Our objective is to save the majority of the positions in the company and create a sustainable business by taking urgent action and maximising liquidity to protect the business”, it said.

Lonmin said the platinum price has fallen by 14 percent since May and it’s embarking on the restructuring process to safeguard its long term investments.

Lonmin will review its capital structure and will make an announcement by November, it said.