South African watchdog orders 6 month hold on job cuts in Sibanye-Lonmin deal
South Africa’s Sibanye has proposed to buy Lonmin for about USD 365 million to create the world’s No. 2 platinum producer in a bid to ride out depressed prices for the metal.
“The public interest will be best served if a moratorium were placed on all retrenchments for a period of 6 months,” the Tribunal, which has the final say on deals, said in a statement.
Layoffs in South Africa are a politically sensitive issue and regulators have in the past placed caps on lay-offs as a condition of deals being approved. Unemployment in Africa’s most developed economy runs at around 28 percent.
Sibanye’s spokesman Mr James Wellsted said that “They took into account all stakeholders but ultimately this is the right decision for the region, for Lonmin’s assets and for the industry generally.”
Mr Ben Magara CEO of Lonmin said in a statement that he believed consolidation was a way to find a “sustainable solution to the industry’s challenges”.
Association of Mineworkers and Construction Union (AMCU) president Mr Joseph Mathunjwa, who previously said the union would consider mass action to oppose the takeover, could not immediately be reached for comment. ■