Lonmin plans 3500 South African job cuts as platinum price slumps

The world's third-largest platinum producer Lonmin is planning to cut 3,500 jobs in South Africa through voluntary layoffs in a bid to slash costs as the price of the metal falls, it said Monday.

"We are in talks with our employees, our unions... about reducing labour costs by 10 percent which may result in a reduction of head count of 3,500 colleagues," Lonmin CEO Ben Magara told a news conference.

Lonmin, which owns the Marikana mine in South Africa where 34 workers were shot dead by police during a wildcat strike in 2012, said it had held "constructive" talks with trade unions over its plans.

"We are having to take this tough decision because it is important to protect the majority of our jobs," said Magara.

The company hopes that unions can convince the workers to consider voluntary layoffs or early retirement.

But the National Union of Mineworkers (NUM), the minority union at Lonmin, has vowed to fight against any job losses.

"We are not happy with the decision," NUM secretary general Frans Baleni told AFP.

"To us it doesn't matter if it's voluntary, retrenchment is still job losses."

Platinum prices have fallen by a third over the past four years.

South Africa accounts for 80 percent of the world's platinum supply -- a mineral used in jewellery and in catalytic converters.

The largest union at Lonmin, the Association of Mineworkers and Construction Union (AMCU), which last year led the country's longest mining work stoppage, is yet to react.

The five-month strike by 70,000 platinum workers last year hit production in the world's top platinum-exporting country, with companies reporting a combined loss of over two billion dollars in earnings.