Bloomberg News

South Africa Appoints Commission to Probe Lonmin Killings

August 23, 2012

South African President Jacob Zuma appointed a judicial commission to probe the killing of 34 Lonmin Plc (LMI) workers by police as government officials left a memorial service after it was disrupted by chanting unionists.

The commission of inquiry will be led by Ian Farlam, a retired Supreme Court of Appeal judge, Zuma told reporters today in Pretoria, the capital. The group will investigate the conduct of police, labor unions and Lonmin Plc before and during the Aug. 16 violence at the company’s Marikana mine, the deadliest police action since the end of apartheid. Prior to the shooting, 10 died in fighting during an illegal strike that began Aug. 10.

About a fifth of global platinum production capacity was idled in South Africa as workers mourned the deaths. Impala Platinum Holdings Ltd. (IMP), the second-largest producer, suspended work for a day at its Rustenburg operation to let workers to attend memorial services, it said in a statement. Rustenburg and Lonmin’s Marikana both tap the world’s biggest platinum field, the Bushveld Complex, northwest of Johannesburg.

“The commission shall complete its work within a period of four months and must submit its final report within a month” of finishing its investigation, Zuma said. Bantubonke Tokota and Pingla Hemraj, who are both judges, are the other members, he said.

Machetes, Spears

Today’s memorial was disrupted after Julius Malema, the expelled president of the youth league of the ruling African National Congress, told the crowd that Zuma’s government was responsible for the deaths. Demonstrators wearing Association of Mineworkers and Construction Union T-shirts marched in front of the stage chanting and carrying traditional fighting sticks. Government officials including Nathi Mthethwa, the country’s police minister, then left before proceedings were complete.

“The memorial service started out peacefully until it unfortunately degenerated into a party political platform,” Zuma’s office said in an e-mailed statement. “The event lost its purpose and desecrated the memory of the departed who were supposed to be remembered in dignity.”

Footage broadcast on Johannesburg’s eNCA television channel showed people in the marquee where the memorial took place dancing and waving sticks and chairs.

“It is Jacob Zuma’s government that is responsible for killing our people,” Malema told the mourners. “Our government is becoming a pig that is eating its own children. Our government is failing to intervene in mines because our leaders are involved in mines.”

Shanduka Group Ltd., a company founded by former politician Cyril Ramaphosa, owns a stake in the Lonmin mine.

Crying Families

Zuma declared a week of mourning after police fired on protesting workers armed with machetes, spears and pistols. The police said they were fired upon by some in the crowd.

“It is not acceptable for people to die where talks can be held,” Zuma told more than 1,000 striking miners yesterday, about 250 meters (820 feet) from the outcrop where the killings took place.

About 6,000 people attended the memorial service at Marikana, where groups of crying family members of those killed performed burial rituals in the field where the miners were shot. Strike leaders led the crowd in war songs and vowed to keep to demands for wage increases. More services are being held throughout the country.

“Even you murderers, we welcome you here,” said Zolani Bhodlani, a Lonmin worker representative, referring to police in a speech. “As long as you’re not wearing that uniform.” There was no visible police presence at the ceremony.

The violence highlighted investor concern about law and order in an economy that relies on mining for almost two-thirds of its exports. Producers of platinum in South Africa, which has the world’s largest reserves, have cut spending and idled mines following above-inflation cost increases and lower prices for the metal, used in jewelry and anti-pollution devices.

Higher Pay

The rock-drill operators are demanding that Lonmin increase their pay to 12,500 rand a month ($1,504). The protests turned violent because of rivalry between the emerging Association of Mineworkers and Construction Union and the dominant NUM, according to Lonmin. The operators will earn a basic wage of 5,891.89 rand next month, when an increase comes into effect from a previous agreement, and a total package with medical, housing and other allowances, of 10,512 rand, Johannesburg-based New Age newspaper reported, citing Solidarity labor union.

Strikes Spread

Worker discontent spread to a nearby mine owned by Royal Bafokeng Platinum Ltd (RBP), yesterday, with operations interrupted at the company’s North shaft, it said in a statement. Police said employees were demanding higher pay. The miners returned today, the National Union of Mineworkers said in an e-mailed statement.

Anglo American Plc (AAL)’s platinum unit, the world’s largest producer of the metal, said workers in South Africa made demands directly to the company on Aug. 17.

Lonmin, the world’s third-biggest platinum producer, has the capacity to produce about 750,000 ounces a year, mostly at its Marikana mine. Impala’s Rustenburg mine produced the same amount in its last financial year after production was cut by a strike.

Platinum for immediate delivery has gained as much as 12 percent to $1,561.50 an ounce since the shooting. It was trading at $1,555.25 an ounce at 5:32 p.m. in London. Lonmin shares have fallen 8 percent in that period and closed trade at 640 pence in London today.

To contact the reporters on this story: Carli Cooke in Johannesburg at clourens@bloomberg.net; Sikonathi Mantshantsha in Johannesburg at sikonathim@bloomberg.net; Andres R. Martinez in Johannesburg at amartinez28@bloomberg.net

To contact the editors responsible for this story: Amanda Jordan at ajordan11@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net


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