On 16 August, 2012, South African police shot and killed 34 striking miners at Lonmin’s Marikana platinum mine. Lonmin is a British company – successor to Lonrho, which British Conservative Prime Minister Edward Heath called “the unacceptable face of capitalism” in 1973.
This year was the first time that London Mining Network has attended the Lonmin AGM. We did so in response to a request by Bishop Jo Seoka, former Anglican Bishop of Pretoria and Chairman of the Benchmarks Foundation in South Africa, who has been working with the miners at Marikana and with the widows of those workers who were killed.
Bishop Jo was accompanied to London by colleagues from Dachverband der Kritischen Aktionärinnen und Aktionäre (Association of Ethical Shareholders Germany) from Germany and the Apartheid Debt and Reparations Campaign from Switzerland.
Earlier in the week, the delegation met with Lonmin’s Chief Executive Officer (CEO) Ben Magara, and the discussion continued inside the company’s AGM on Thursday, 26 January. Before the AGM, a moving demonstration took place, commemorating the 34 striking mine workers killed by the police.
Media coverage of events can be found here.
Inside the AGM, I was especially struck by several things.
While the company seems happy to express ‘regret’ over the massacre, and Ben Magara has, as an individual, said he is ‘sorry’ (although he had nothing to do with the company when the massacre took place, only joining the following year), the company will not apologise. Company Chairman Brian Beamish spoke of the ‘the 2012 tragedy’. Repeatedly, both the Chairman and the CEO spoke as if the massacre was something over which the company had had no control, as though it were detached from it – almost as though it was pure accident that it occurred at Lonmin’s operations.
Presumably because it refuses to accept responsibility for the massacre, the company resolutely refuses to offer compensation to the families of the murdered workers. Brian Beamish said, “Compensation is not something that the company is, or should be, contemplating.” The company likes to talk about the various initiatives it has taken to provide education, employment or housing as though these were praiseworthy acts of charity. In reality, each of its initiatives is inadequate, and none is a substitute for the justice that is being denied.
Several of the shareholders clearly looked back with affection to the days of the notorious Lonrho Chairman Tiny Rowland and did not see Lonmin as in any way responsible for the sufferings of the workers. What did the workers want to spend their money on when they did not even have water and electricity bills to worry about? The trouble was all stirred up by the unions.
CEO Ben Magara talked of the company “spending capital which shareholders so painfully had to take out of their pockets,” given the lack of a dividend the past few years. After the AGM, I overheard several shareholders expressing the hope that by next AGM the company might have stopped behaving like a charity, in which they invested money and received nothing back. I wonder how they imagine their pain compares with underpaid workers and the families of those who were killed.
I usually look for, and find, at least something humorous at mining company AGMs. In the midst of such destruction and irresponsibility, it is important to retain the capacity to laugh. But there was none of that at the Lonmin AGM.
What follows is a fairly exhaustive account of what was said, with a few editorial comments in square brackets. Most of what was said truly speaks for itself. Readers of a sensitive disposition may wish to have a bucket by them in case they feel moved to throw up…
1. Company Chairman Brian Beamish began the AGM by saying he was pleased to meet the shareholders as the AGM was the only opportunity in the year to meet and hear our views. He introduced the ‘team’ at the table – which consisted of five middle aged white men, two slightly younger black men, one middle aged Asian man, one Asian woman and one white woman – perhaps a trifle more varied than most mining company boards. He noted that company CEO (since 2013) Ben Magara had held a senior position at Anglo Platinum and had been CEO of Anglo Coal South Africa. Other connections on the board included Anglo American, Rio Tinto, Barclays, Standard Chartered and De Beers – an impressive list of companies with deep roots in apartheid.
2. Brian Beamish said that the company had begun 2016 by successfully completing a rights issue and renewing debt facilities. There was a planned closure of less productive shafts at Marikana and a reduction in the workforce, which was regrettable but necessary, he said, to secure the employment of the majority of employees. This had been achieved through voluntary redundancies and re-skilling. It was evidence of the improved relations that the company had with employees and unions. This amicable agreement would enable the company to transform its operations.
3. In November, Lonmin had signed an agreement to buy Anglo American’s share of the Pandora Joint Venture, so Lonmin now owns over 90%.
4. Contracts had been awarded to members of the Bapo community and this had led to exceeding the commitments made to the community. Housing required resources in excess of what the company had, and this meant joint activity with various other agencies including the government. Employees deserved decent living conditions and to have a choice in how and where they live. No one company could achieve this by itself especially in the context of low prices for platinum.
5. He said that there had been a great deal of interest in the dependants of the victims of “the 2012 tragedy”. He noted that there was a demonstration outside the AGM. He said that the board held these matters as of highest importance. Lonmin is working to improve conditions so employees have a decent standard of living. It has made a significant commitment and investment to address these issues.
6. As always, he said, the safety of colleagues is the company’s first priority. The overall safety indicators were showing improvement, but he said he had to report the tragic loss of four workers in 2016 and, since the year end, another death. The board wished to send its deepest sympathy to the families and friends of the deceased. It is making sure that lessons are learned and shared and implemented after each death. It believes that zero harm is possible.
7. Ben Magara then said that the company continued to experience challenging times with prices, the political environment and the labour environment. It withstands these as it has resilient people and a great asset base. The company is balancing social, economic and environmental challenges to create a shared vision which is crucial to generate shared value for all its stakeholders, in particular including communities, employees and shareholders.
8. Ben Magara referred to the protesters outside the AGM and offered a “warm welcome” to Bishop Seoka, who, having spoken during the protest, was now present inside the AGM. He said that there were some facts that some people may not be aware of. The conclusion of the five month strike in 2014 with the majority union was a “tough journey” and culminated in a midnight agreement in which Bishop Seoka had played a part. Ben Magara said that “this was part, for me, of an emerging maturity in generating partnership in addressing the challenges of our less privileged.”
9. He said, “It is important, with all these challenges, that we share who Lonmin is and have a sense of what this company is all about.” He said that the company had over 33,000 workers, including its contractors. The platinum price was down since 2009 and the company continued to weather tough storms of low prices, political, labour and community challenges. He showed a presentation (see ‘2017 Annual General Meeting’ at https://www.lonmin.com/investors/reports-and-presentations) explaining how the $1.1 billion cash generated in 2016 was shared. He said that this sustained 33,000 workers and many dependants. Shareholders had put in $7 billion and only received $60 million in that period. He thanked shareholders for supporting the company.
10. He said that “2012 happened at Lonmin’s doorstep. It could have happened anywhere. I hope that all leaders work hard, not only at Lonmin, to ensure that this never happens again anywhere else, if we are to be humane. Lonmin acknowledges its past and continues to work at it.” He said that in August 2012, ten employees were hacked to death by strikers and 34 were gunned down [he did not say by whom, though it was the police, called in by the company] and a total of 44 people lost their lives. He said that he visited the children of all 44 dead miners in his first week as Lonmin’s CEO in 2013. “The visit was to go and say sorry for the loss of your breadwinner, father, husband, uncle. We cannot bring them back but we can make life better in future.”
11. He explained that employees need accommodation. “We are 50% there but it is an endemic challenge for the developing world and in particular South Africa.”
12. “When I travelled in 2013,” he said, “I met all the widows, and Lonmin offered a job to the family of each of the deceased. Most of the widows chose to take the opportunity for jobs. Some are doing general work, one is a nurse, another an administrator. We assisted each family with all pension and death benefit schemes so they can enjoy all the statutory benefits they deserve.” He said that Lonmin also formed the 1608 Memorial Education Trust fund. It committed immediately as children could not afford to lose a year in school. Lonmin is paying for uniforms, fees and incidentals for all those eligible to go to school or creche. Education for a child is setting them up for a great future.
13. He explained that the company was also providing psychological counselling to parents and others so that it could minimise the impact of their pain and loss. With all that commitment, the company has its first graduate, with a BSc in agriculture – Mandla Yawa. One colleague visits all the children to make sure they are in class and getting all the benefits they need.
14. Lonmin was also working with communities so they could get some benefit from what it is doing. The Bapo community owns 2.24% of Lonmin and procurement services worth 1.65 billion rand (because at present they derive no economic benefit from the shares).
15. He said that the company’s employees were asking for a basic salary of 12,500 rand a month. Lonmin felt challenged with its employees because of problems with “financial literacy”. The main reason for the salary request was that much money was being paid to loan sharks. Lonmin is now serving its employees to the tune of five million rand a year through tackling the loan sharks. Its employee share ownership scheme has given employees 3.8% of the company, and whenever it makes a profit they will get 3.8% – but they will not face losses when no profit is made. There has been a reduction in AIDS deaths because of the focus on employee well-being. Lonmin had worked hard on housing. South Africa had a sad legacy in the hostels which existed in the mining industry. The government had legislated to get rid of these. Lonmin had completed the conversion of single sex hostels by the end of 2014. The company had introduced a living out allowance for all employees without company accommodation. They get 2,200 rand a month. The company had also facilitated home ownership schemes and was building rental accommodation in the form of apartments.
16. A key issue in 2012 had been the salaries of rock drill operators. The company and the workers had signed an agreement last year without losing a single day to strikes or actions. There was an improving relationship with workers and the union but it was still fragile. From 2012 to July 2018, rock drill operators will have doubled their basic salary from 6,200 to 12,300 rand. The total package including medical and pension benefits, would be nearly 19,500 rand. The platinum price in that period had been coming down. The company was trying to sustain 33,000 jobs.
17. He said that the company had started providing better housing well before democracy was introduced in South Africa in 1994. He said that 6,757 houses had been built since 1977. The backlog was still huge but they were 50% there. The strategy is to provide housing in five ‘pillars’. The first was the removal of hostels according to law. There were no more single sex hostels at Lonmin. The company was now building apartments within old hostel areas so that the same bulk services could be used. 325 units had been built in phase 1 and 168 in phase 2. The company would also promote home ownership and then assist improvement of informal settlements, but this would need the help of local government – settlement land belongs to the traditional council, and to do work on it would require the government to rezone it. Lonmin believed that employees deserved better conditions, but without a profitable business there would be no employees who would need the houses.
18. The company had had to retrench around 6,000 jobs in 2016. It had signed an agreement with the government and other parties to minimise job losses. It was “spending capital which shareholders so painfully had to take out of their pockets”. But it was crucial that the company address the problems. Lonmin had to find how to mitigate job losses. The pace of house building was slow but the company needs to build and sustain jobs for the future.
19. He said that the company had worked hard at building relationships, building houses and making sure that children could go to school. The “challenges that led to August 2012 are endemic,” he said, “but while Lonmin is addressing these challenges, I hope that all employers and the government can do their bit. There is no employer without an employee needing better accommodation. Lonmin acknowledges its past and wants to build a better future and are looking for partners. Adversaries never achieve anything but partners can achieve a lot more.”
20. The Chairman then opened the meeting up to questions.
21. Miss Arbuthnot, a shareholder, said that the overview given had been very helpful and interesting. She said she supported a number of people in South Africa, and that when she had read the press release of the demonstrators outside the AGM she had been troubled and had done some research and found an online article alleging that one of the promoters “had form for financial irregularity and assault.” [After the AGM, when I questioned her, she said that these allegations had been made about Bishop Jo Seoka. In fact, Bishop Jo had been completely exonerated, and the charges against him found to be a complete fabrication.]
22. Miss Arbuthnot said that without the trade union movement, the ANC would not stay in power. At Marikana, many people had been brought in to support the protesters. The financial demands of the strikers had been very high. She had consulted a retired bishop in South Africa [she declined to say who] and he had told her that there was a great push for the country to become more socialist and communist. There was a push to take land from whites. She said that none of above takes away from the need of Marikana miners to get decent pay. But she had thought that the demands of the protesters were unreasonable. She said that the protesters wanted miners to be paid more than her pension and disability living allowance, and she lived in central London, which is very expensive. She could not understand what the strikers wanted to spend the money on. But Mr Magara had made it clear that they wanted to spend it on paying back loan sharks. She asked that clean running water and basic sanitation be made a priority, along with face masks for workers who have to breathe in polluted dust. People are working in polluted conditions. There is also the problem of noise – miners need ear muffs. Could the company prioritise these things?
23. Brian Beamish said that safety and health were at the top of Lonmin’s priorities. One of the initial drives was to provide running water in informal settlements, together with sanitation and removal of refuse. Everyone now has access to running water. The company spends a lot of time measuring the environment in which employees work. There is no threat of silicosis. Ventilation requirements are spelt out and managed. In the crushing plants they make sure workers wear masks. If they find people who take their masks off, action is taken to ensure they put them on again. The company is struggling to get total control of noise and hearing loss problems. It has struggled to bring down the noise levels of equipment. Ear muffs and ear plugs are issued but people do not always wear them, so there is a need to reduce the noise to which workers are subjected, and management is working on this while trying to ensure that people do wear the necessary safety equipment.
24. Peter Frankental, of Amnesty International UK, congratulated the company for developing in 2015 a human rights policy which reflected the UN guiding principles on business and human rights. One of these is access to adequate housing. Ben Magara had said that there had been slow progress on housing and the squalid conditions in informal housing. Peter also noted Ben Magara’s call for partnership. Peter said that The 2015 Farlam Commission’s report into the 2012 massacre of 34 employees at Lonmin’s Marikana mine found that the company had “created an environment conducive to the creation of tension and labour unrest” by not addressing the housing situation at Marikana. Despite legally binding responsibilities to address the chronic problem of squalid living conditions dating back over a decade, Lonmin has consistently failed to live up to its obligations, and the problem of appalling housing conditions for the majority of its workers continues unaddressed.
25. Peter said that Amnesty International’s 2016 report on the housing conditions at Marikana underlined the seriousness of the situation, detailing not only the failure of Lonmin to deliver on its promises but also exposed the hollowness of the company’s excuses, and raised concerns that in a number of instances Lonmin provided false or misleading information to its shareholders and stakeholders.
26. Most recently, he said, the South African authorities had threatened in December 2016 to either suspend or revoke the company’s mining licence unless a credible housing plan to finally address this situation is forthcoming. In response Lonmin has stated it is confident that it will submit a compliant plan, but the history of the company’s actions suggests that it will continue to try and pursue the path of prevarication and unfulfilled promises about meeting its obligations under the Social and Labour Plan.
27. In view of this and of what is at stake for affected workers and for the company itself, which has a long term licence, Peter asked the Board to give concrete assurances that it would
* address the appalling housing conditions of its workers as a matter of urgency, in a way that respects the rights of its employees to adequate housing and in consultation with them;
* end the practice of misleading reporting that has characterised the company’s annual Sustainability report from 2005-2015;
* and commit to publishing all its reports to the Department of Mineral Resources since 2006 and all future reports in the interests of transparency.
28. Brian Beamish said that this must be understood in the context of what the company can and cannot afford. He said that the company wants to provide a good standard of living. It is not easy to provide housing for 33,000 people with the resources of the company, involving financing and the necessary rezoning. Initially Lonmin built houses which were extremely competitively priced, but employees did not want to buy them. The company had thought hard how to address this. It is providing accommodation for rental and will give workers decent places to live. The problem is not unique to Lonmin. The company has not given a cent back to shareholders since 2009, so the problem cannot be solved immediately. The company cares about its employees and is doing its best to provide as much as it can from its own resources. Management would be happy to engage with anyone who can help them. If people have resources or suggestions that they think can tackle this problem, management would be happy to hear from them.
29. Another shareholder said he had held shares from the days of Tiny Rowland. He was interested in what the company was trying to do for its workers and interested to hear of the housing situation. The company was building a town around the mines. What was it doing to involve workers to create their own social outlets. After work, is there anything for workers to do? He said that he could go to the cinema, watch television or go to a pub or club. What were Lonmin and the unions doing together to get such things in place?
30. Brian Beamish said that a lot of employees do not wish to retire around the mining operations. A large percentage have homes elsewhere in the country and return to those homes. Communities around the operations are communities with facilities, shops, television and other things. Life after work is not sitting doing nothing. There is poverty and some squalid living conditions but all the amenities that might be expected are there.
31. Bishop Jo Seoka, former Anglican Bishop of Pretoria, explained that Marikana fell within his episcopal jurisdiction. When the massacre occurred, he was there. He presented the workers’ demands to the company.
32. Bishop Jo said that Mr Magara was doing all he could do to try to respond to the needs of the community. All that Mr Magara had said in his address was true. But there was another side to the story, and this needed to be heard as well. The bishop had come to the AGM because he was one of the leaders nominated by workers, in a public meeting at which Mr Magara was present, to deal with the Marikana issue. Bishop Jo said that he wanted to appeal to the conscience of the board and shareholders to support Mr Magara in his efforts. He was a new broom, and Bishop Jo believed that this broom could sweep better. Responsibilities go with leadership. Bishop Jo engaged with Mr Magara occasionally. He also continued to visit the Marikana area to provide pastoral care. He was appalled at the conditions there. They were not what he would expect after five years. Something more could be done, and the board knew it could be done. Only last month Bishop Jo had taken took a photograph of a child outside Ganeng scavenging on a heap of rubbish, looking for something to eat. He had taken an exactly similar photograph just after the massacre. This should not be happening. The bishop said he was appealing to the conscience of Mr Magara and Mr Beamish to do what they were saying they were doing. He said he wanted to put before them simple things that could be done. Mr Magara had said sorry for what had happened but the company had not expressed regret or given an apology. People had been waiting for this for the past five years. People wanted the company to take responsibility. Contrary to the Farlam Commission, the bishop and the community believed the company was instrumental in calling in the police who killed the workers. They know there was a confrontation between workers and ten were killed prior to the massacre of 16 August 2012, but this would not have happened if the company had provided security and opened the door to talk to the workers. “I think I was the last person to speak to the man in the green blanket,” said the bishop, referring to one of the strike leaders. “He called me to say they were being killed, and all I heard on my cell phone was the sound of guns. We are asking on behalf of the widows orphans, the injured and arrested, that you provide leadership by saying, ‘We regret what happened on 16 August 2012’, and apologise and ask others to co-operate to build a new Lonmin in a new South Africa.”
33. Bishop Jo went on to say that the koppe, or hill, on which the striking workers had gathered, was still as it had been at the time of the massacre except that the plain around it had been cleaned. Bishop Jo said that he and the community believed that if Lonmin meant well, it still had the opportunity to show good will by building a monument as a symbolic gesture to honour the deceased. Thirty-four lives had been lost at that hill. The company could build a monument where the names of all who died that day could be inscribed together with their picture, as is customary for Africans, so that people can go and visit and show respect and meditate on what happened. The company could say to workers and the community that it is dealing with people in good faith. That gesture would be a good thing to do and would contribute to the healing of memories. People are hurting as they go by that area and they need something that assures them that the company is dealing with them in good faith. It would not be expensive, not unaffordable, not foreign to Lonmin as a company. It is something the company could actually do, working with all the other stakeholders. Lonmin could work with the union, AMCU, and civil society and listen to what the community is asking, and see what community leadership could bring. Bishop Jo appealed to the company not to make assumptions about what people want but to consult them.
34. Bishop Jo concluded by reiterating that two things were needed – an apology and a monument. He then presented the board with a DVD of the film by Rehad Desai, ‘Miners Shot Down’, saying that it was painful to watch but that it was important that the board watch it.
35. Brian Beamish replied: “I appreciate, and board appreciates, the recognition you have given to Ben and his team and the company for the work done and being done to address the issues. Ben has the full support of the board. The issues are on the agenda at every board meeting and we look to Ben and the management team to move as fast as possible on these issues. For our licence to operate we need to address these issues. There is no doubt that the board and every single South African regret what happened at Marikana in 2012. It goes without saying.” And with regard to the proposed memorial, he said: “The company would be keen to progress this as long as we can satisfy all stakeholders over what form it should take.”
36. Ben Magara said that the Inkaneng informal settlement is next to the smelter. The koppe where 34 miners died on 16 August 2012, and the other ten who died in various parts of the property – that land does not belong to Lonmin but to the traditional authority of the Bapo community. In South African law the custodian of traditional land is the provincial government and in this case the people there are there informally, and until that land is zoned, no bulk services can be provided, as the traditional council would need to give agreement and be compensated, so collaboration with the government is crucial. Lonmin has explored the potential for a museum around the koppe. The company believes this should happen and this could be part of a platinum industry museum, as the industry does not have one at present. But it remains contested ground. Rivalry between unions continues. Political parties continue to jostle for ownership of that area. It is difficult for a company like Lonmin to play peace broker to its rulers. If civil society has it in them to put the parties together, Lonmin is committed to find an opportunity for this museum. The company has had some design concepts for this museum, but the project is hampered by rivalries beyond the company’s control.
37. Another shareholder said that any loss of life was obviously regrettable, whatever the cause. He said that he appreciated what the company had been doing to support the widows and to provide housing and education. But he asked, “In financial terms, how much compensation has the company paid, and when do you foresee there will be a full and final financial settlement?
38. Brian Beamish asked, “With whom?”
39. The shareholder replied, “The families of those who lost their lives.”
40. Brian Beamish said, “When the unfortunate events of 2012 occurred, we acted quickly to see what help we could offer. We found that children needed education, families who had lost their breadwinner needed jobs, and statutory compensation needed to be paid quickly.” The company was looking at the bigger issues of housing and putting resources into that, but “Compensation is not something that the company is, or should be, contemplating.” He said that the unions, the company and the police all had involvement in “what happened in 2012”. The Farlam Commission had looked at all of this. The company was now trying to “uplift the area and look after those families.”
41. Barbara Mueller, of Apartheid Debt and Reparations Campaign, said she had been involved with a solidarity campaign with the widows and injured workers at Marikana and had interacted with the widows. She said that the widows were very unhappy to have to work in the mining industry, far from their homes and families. Barbara had visited Marikana and one widow in her home in the Eastern Cape. For them, working in the mine is not a solution. They would like to set up independent small businesses that would allow them to stay together as families. Families have lost their fathers, and now their mothers are hundreds of kilometres away, and families are falling apart. This is what the apartheid system did. Barbara said she had listened attentively to what had been said in the AGM and believed that there was a new spirit in Lonmin, but that it would take more to strengthen that belief and would depend on what happened over the coming year.
42, Brian Beamish said that he had not met with all of the families of the deceased, and it was hard for him to say what they feel. The company had offered employment to a family member: it had not been the intention that the deceased miner’s spouse would come and work at the mine, but the intention was to replace the family’s income. The intention was to have each family nominate a family member. The bulk of the families ended up with the deceased’s wife working. This was not ideal but was a solution to bring back money into the family unit. He said he would discuss this matter with Ben Magara.
43. Ben Magara said that the company had enabled all the families to receive all the applicable state benefits including pensions and death benefits. When Lonmin offered these jobs it was because many of the families had asked if they could get jobs, and most widows had opted to take the employment themselves. On small business and enterprises, not everyone can do this overnight. Lonmin has a hub to assist any entrepreneurial family member, whose idea is judged. Not everyone has the appropriate entrepreneurial mindset. One worker is a nurse, another an administrator. If anyone comes with a skill that they can offer, the company considers it.
44. Markus Dufner, Manager of the Association of Ethical Shareholders Germany, said that he had become involved because of BASF, a German company which is Lonmin’s biggest customer because it manufactures catalysts for vehicles. BASF cannot be without platinum. It was Markus’ view that BASF also plays a role in Marikana, and that the way BASF behaved, or used to behave, was not pleasant, In 2015 and 2016 Bishop Seoka had come to Mannheim in Germany, to the company’s AGM, and it appeared that shareholders did not know about Marikana, or platinum, or Lonmin, so Bishop Jo and Markus’ organisation had informed them. Company management knew about it but had not made things transparent to shareholders. But all shareholders should know where profits come from. BASF shareholders regretted the situation at Marikana and said that BASF should intervene. BASF then spoke to Ben Magara and had an audit done. Markus did not know if Lonmin was aware of the audit or whether the company had informed shareholders of its outcome. As the audit was not open to the public, Markus suggested that it was Lonmin’s responsibility to tell shareholders. BASF said they had found problems in the shafts and that they were experts who could counsel Lonmin about how to improve matters. Markus and his colleagues had thought the audit was to be about workers and housing, but perhaps not. Markus said that his question was about housing needs. He supported what many others had said. He urged that the company resolve workers’ housing needs, as 30,000 workers live in tin huts without access to electricity, basic sanitation or regular drinking water. This needs to be resolved in consultation with workers. It needs to include subsidised rental accommodation and improvements in informal settlements. He also urged the company to pay a living wage as early as possible and to reconsider its decision to increase pay for workers progressively. It should, he said, be paying the living wage by mid-2018, not mid-2019.
45. Brian Beamish said that BASF was an important customer and that it was only because of such customers that Lonmin could employ workers and given them an income. He was not aware of any audit on the mine about the safety of the shafts.
46. Ben Magara said that and audit had been done by BASF, not on the shafts but on social and human rights issues. Lonmin had done work on updating its human rights policies, as Amnesty had said. The BASF audit had identified several things and Lonmin had acted on all its findings, and continued to work with BASF. A team of BASF auditors was in place to make sure that the companies’ long term relationship was not only commercial but constituted a ‘togetherness for sustainability’. The audit was not an operational audit but investigated social and environmental issues identified by the Farlam Commission. He said that it was not correct to say that 33,000 workers live in squatter camps. Of Lonmin ‘s own 25,000 direct employees, 11,000 sadly still do not have decent accommodation, but the company is committed to delivering it.
47. Brian Beamish said that rental accommodation and initiatives described earlier covered the rest of Markus’ question. Regarding wage increases, they had been way above inflation. Rock drill operators in 2018 would be earning over 19,000 rand a month.
48. I suggested that Ben Magar’s answer to Bishop Jo’s request for a memorial had been indicative of a failure on the part of the company to listen to what workers and communities were actually saying. Bishop Jo had suggested a memorial to the workers killed in the Massacre. Ben had answered by talking about plans for a museum. It was important, I suggested, that the company considered what was actually being suggested, other wise company and communities would be talking past each other rather than to each other.
49. Ben Magara replied that design work had been done on the proposed memorial but that the company was also working on plans for a museum. He said that Bishop Jo was not the only community representative and that the company was working with all. What it does is responsive to all. He said that he did answer Bishop Jo’s point. There was a life beyond mining, and the company had to think of the bigger picture. That was the context.
50. Richard Harkinson, from London Mining Network, said he had questions about risk assessment, about how Lonmin dealt with problems of waste management, and its plans to build a new tailings dam. The company’s Sustainable Development report suggested that the company was 50% of the way through permitting and feasibility studies. Tailings dams posed a safety risk – as in the case of the Samarco disaster in Brazil in 2015 and the dam collapse in Hungary in 2010. Many lives had also been lost in South Africa. In the 2013 ‘Closing the Gap’ involvement with the Benchmarks Foundation, Lonmin had moved to deal with some of the huge pollution problems caused by its smelter. The company had used calcium oxide to reduce emissions and now had a huge problem of disposing of calcium sulphide. This was being disposed of in a tailings dam. Is the rezoning of land a problem for construction of the tailings dam? Is there a problem of finance? The International Finance Corporation (IFC) owns 1% of Lonmin, and the company was in negotiations for a 100 million US dollar loan from them for increased mechanisation and a social development plan. According to the website of the IFC’s Compliance Advisor Ombudsman (CAO), the IFC had never disbursed the proposed loans but had kept equity in the company. Were they being consulted on the technical aspects of waste management? What regulatory agencies had given Lonmin permission to go ahead and what had the company still got to do?
51. Brian Beamish replied that the management of waste and tailings was an ongoing part of the operation, all well managed. There were very professional designs by specialists and professional operators to ensure that the tailings facilities were well operated. The overall management of tailings was very professional and complied with all laws. The company was working on dust suppression on the dams but generally they were very well designed, planned and operated. Regarding the smelter, the company had done a lot of work on control of fugitive gas emissions, primarily sulphur dioxide. Fugitive gases were problematic for communities around the smelter, so there was a project to capture those gases, and in next five years the company would upgrade to comply with increasing legal requirements.
52. Ben Magara said that the company was currently reclaiming one of the old, compacted tailings dams, TD 1. This was deposited some decades ago, and in those days the technological capacity to extract minerals was lower than it is now, so the company was reprocessing tailings to collect more chrome and platinum group metals. Eventually there would be nothing left at the dam, and the site could be future ground for housing or another tailings dam. All that the company is doing is part of the life of mine agreement with the government and is regulated by the government. The IFC is no longer an investor in Lonmin. The 1% they once owned had gone, he believed, by the time he had joined Lonmin. The IFC were no longer shareholders.
53. Richard Harkinson said that the World Bank’s CAO had a website and that the latest postings on it concerning Lonmin were from December 2016. This website said that Lonmin had an ongoing dispute resolution process with widows at Marikana. It also says that the IFC holds 0.9% of Lonmin.
54. Ben Magara said that this was historical but that he could discuss this and then put an answer on Lonmin’s website. The company had done a lot of work around that. Some women in the community had brought a complaint and the company was happy to engage with them and you.
55. Another shareholder, Bertram Hyde, said that his sister had worked for Lonmin for forty years as a secretary. The company had had a very good relationship with its shareholders and they got dividends every year. He said that the previous year he had attended the AGM and had not realised until then that his 24,000 ordinary shares had been reduced to 240. If 100 shares were knocked down to one, each share should be worth 100 times as much. He had subsequently bought some more shares more cheaply.
56. He said that Tiny Rowland, during the days of Lonrho, had told shareholders that he looked after miners in South Africa. It was not Lonrho that caused the trouble but the unions having a battle. They chose Lonmin as the site for their battle. They incited people around there, and there was an outbreak of violence, and police were called in, and it was they who did the shooting. Lonmin, he said, is not responsible.
57. He said that the US dollar is very high, gold is very high, and platinum is next to gold. Platinum is still being got out of the ground. There must be quite a stockpile. What is the value of Lonmin’s stockpile? Shareholders hold shares in order to get dividends and get capital appreciation. But the dividend was non-existent. When would it be resumed? He said that he had followed Lonrho for many years, when everything was peaceful when Tiny Rowland was in charge. Shareholders used to see films showing the company helping local people. Where had it all gone wrong? It was not the company but the unions inciting the local people. Lonmin was helping out, doing the best it could. What other mining companies in South Africa were being bothered with all this unionisation?
58. Brian Beamish said that the company greatly valued its long-term shareholders. When shares were consolidated, it did not affect the percentage of a shareholder’s ownership in the company, but was to restrict the number of shares being issued to a reasonable number. If you had 100 shares at 1p you ended up with one share at £1. The value of investment and the percentage of holding remained the same.
59. With regard to unions, Brian Beamish said that South Africa was a complex place to do business, and labour and social issues were complicated. It was quite right that in 2012 what happened with the unions did not happen only at Lonmin, and what happened at Marikana could have happened anywhere. It happened at Lonmin, and ended up with police shooting 34 people, but the same issues affected Lonmin’s competitors equally. Lonmin should not be uniquely tarred with the brush. Regarding dividends, the company would like nothing more than to pay shareholders a dividend, but this is entirely dependent on the price of the company’s product. If the price increases, it can pay a dividend. At present Lonmin is just breaking even. It is highly geared and cannot pay a dividend, but if the price improves it should be able to do so. Other companies, including Impala and Anglo Platinum, are involved in community activities and housing and are facing the same pressures on salaries. The settlement with AMCU was essentially the same for all producers. Whatever Lonmin mines, it processes, refines and sells. The company has released ounces out of its pipeline and tries to reduce what it has in storage. It is useful to have a minimum stockpile, as the mineral can be sold.
60. Another shareholder, Paul Etheridge, said that he wanted to support the board and all the people at Lonrho over the issues at Marikana. [It was interesting that he used the former name of the company.] Mr Etheridge said that the company had 22 months of reserve ore. Could it not reduce the reserve ore to make use of capital in the company to reinstate dividends? 22 months of reserve ore seemed a lot.
61. Brian Beamish explained that in the kind of mining that Lonmin does, the norm is to provide flexibility. Underground there may be unforeseen events, and it is hard to predict precisely what would happen, so the company needs a minimum 18 months of reserves so that as an area was depleted and a new area begun, there would be some leeway. It was fortunate, he said, that Lonmin had built up to 22 months of reserves to accommodate the existing operations, so it could react faster if metal prices went up. The value is relatively small in comparison to overall costs and it would reduce flexibility if the reserve were reduced in order to pay a dividend.
62. Brian Beamish then said that the board would be available after the meeting to deal with any other questions, and called a poll on the various resolutions – all of which were carried by large majorities, as usual. And we were able to emerge from the darkness into the bright light of day again.