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South African Billionaire Patrice Motsepe Eyes Embattled Lonmin Mine

Patrice Motsepe
Patrice Motsepe

South African mining billionaire Patrice Motsepe has indicated interest in British platinum producer Lonmin’s Marikana mine, which is facing a four week strike that has halted production.

Motsepe who is also the chairman of the African Rainbow Minerals (ARM), a leading South African diversified mining and minerals company, said despite the challenges in South Africa’s platinum industry, it presents opportunities for businesses.

ARM has interests in gold, ferrous metals, base metals, and platinum.

“We believe in the long-term fundamentals of platinum and that it will be a big money spinner as part of our future portfolio,” Motsepe was quoted as saying.

Motsepe is estimated to be worth $2.7 billion. He was born in the sprawling Black township of Soweto. He trained as a lawyer and became the first Black partner at Bowman Gilfillan law firm in Johannesburg. Motsepe ventured into mining in 1994 buying low-producing gold mine shafts and turning them profitable using a lean management style.

He is one of Africa’s leading entrepreneurs and was voted 2002 South Africa’s Business Leader of the Year by the CEOs of the top 100 companies in South Africa. In the same year, he was the winner of the Ernst & Young Best Entrepreneur of the Year Award.

According to Motsepe the uncertainty and turbulence in the platinum industry occasioned by workers unrest and industrial action would result in acquisition opportunities.

Although ARM chief executive Mike Schmidt did not confirm possible acquisition of Lonmin’s Marikana mine, he noted that it was a “consideration”.

“While we are inquisitive about acquisitions, we are not prepared to overpay,” Schmidt said.

If ARM acquired Marikana it will add on to the three platinum mines the firm operates, Modikwa, Two Rivers and Nkomati in South Africa.

Lonmin, which is the the world’s third-biggest platinum producer is loosing 2,500 ounces of platinum every day the mine is closed and has already warned it might not reach its annual production target of 750 000 ounces. The Marikana mine accounts for about 96 percent Lonmin’s output.

Lonmin has warned that an indefinite strike will threaten the jobs of more than 40,000 workers.Thousands of the firms workers defied a Monday deadline to return to work with the company reporting barely 6.3 percent of its shift workers had reported for work.

About 4,000 of Lonmin strikers marched today at one of Lonmins shafts armed with sticks, spears or machetes to confront colleagues who reported for work, as they pressed on with demands for wage increases.

On August 16 police shot and killed 34 striking workers at the Marikana mine and injured 78 others. The mine workers have threatened not to return to work until they get a $1,500 salary wage hike.

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