The world's third-largest platinum producer Lonmin announced at the end of November 2008 that it had advised its employees and representative unions that in response to the current economic climate, it has started a process which may lead to job losses at its Marikana operations.

At that early stage, it was estimated that up to 4 000 permanent Lonmin employees may be affected. Lonmin is committed to constructively engaging with its representative unions in a process to try to mitigate job losses. In terms of the South African Labour Relations Act, a section 189 notice has been forwarded to the respective offices of the unions.

The trade union Solidarity states that it received the official Section 189 notice from Lonmin. The notice said that 4 000 employees, including 3 000 at Western Platinum and 1 000 at Eastern Platinum, could lose their jobs.

Meanwhile, the Department of Minerals and Energy called for an urgent meeting with the Chamber of Mines and all trade unions in the mining industry to discuss the impact of the worldwide economic crisis on the South African mining sector.

The Section 189 notice Solidarity received from Lonmin stated that employees in all job categories will be seriously affected by the planned retrenchments. In addition, Lonmin is proposing only the minimum severance pay of one week's salary for every year of service.

The retrenchments are mainly the result of the drastic decrease in the demand for platinum. The consumption of platinum largely depends on the manufacturing and sale of new vehicles, since about 54% of all platinum produced is used for car exhausts. Also, the drop in the platinum price has placed further pressure on the industry.

"The planned retrenchments are expected to directly affect more than 15% of Lonmin's total workforce. The South African mining industry is facing an enormous crisis and all possible avenues need to be explored to prevent retrenchments. A larger solution is urgently needed to counter further ripples of the economic crisis in the industry," says Solidarity spokesperson Jaco Kleynhans.

The notice states that the Section 189A consultation process will be referred to the Commission for Conciliation, Mediation and Arbitration in order for the Commission to act as mediator between Lonmin and the trade unions.