Lonmin Media Release: Wage Settlement

Lonmin is pleased to confirm that over 80% of employees returned to work at our Marikana mine today. This follows the agreement reached between management, trade unions and workers' delegates on an amendment to the existing wage agreement on Tuesday which brought to an end over five weeks of uncertainty, hardship and tragedy.

Given the complex and fluid environment of the past few weeks we would like to explain clearly how we came to this point and to clarify the nature of the agreement.

On 10 August 2012 about 3000 workers embarked on an illegal strike which resulted in the loss of 10 lives including 2 policemen during violent clashes over 3 days. On 16 August a further 34 people were killed in a tragic incident between police and workers. Following subsequent marches another two lives were lost. Given the circumstances, the primary focus of the company was to ensure that peace was secured in the area and a peace accord was subsequently signed on 6 September.

While intimidation unfortunately continued, it was with peace front of mind that we agreed to embark on negotiations with all parties around an amendment to the existing wage agreement. Lonmin and the CCMA were in agreement that any such negotiations should take place within the existing bargaining framework and all discussions took place with the full cooperation and support of our partners in the bargaining forum - the NUM, UASA and Solidarity. We could not have reached an agreement without the support of our bargaining partners who showed extraordinary patience under very difficult circumstances. It was with their consent that AMCU and the workers delegates were included in the discussions in order to secure peaceful resolution to the strike.

The amendment to the wage agreement, which is explained in the attached factsheet, was signed by all parties namely the National Union of Mineworkers, AMCU, Solidarity, and UASA as well as the employee' delegates.

The strike was the second unprotected strike embarked upon by workers in the industry this year. Following its conclusion, Government, unions and mining companies need to work together to ensure that bargaining arrangements are adhered to by all parties. As part of this task Lonmin welcomes the opening of a conversation on centralised bargaining and pledges to be a full participant in that conversation. We are also committed to working with the Farlam Commission and all other participants who are committed to ensuring that the root causes of the events of recent weeks are addressed.

We would like to once again thank the CCMA, the NUM, UASA, Solidarity, AMCU and the worker delegates as well as religious, traditional and community leaders for their respective roles in the negotiations which resulted in the conclusion of the strike.

LONMIN WAGE AGREEMENT

Lonmin negotiates in a responsible manner with all recognised unions.

Key features of the agreement reached on 18 September 2012

• The agreement protects the integrity of our current wage agreement.
• The settlement is an addendum to the existing agreement (reached in December 2011).
• The addendum does not replace the existing agreement.
• It was facilitated by the CCMA and negotiated with full cooperation of our bargaining partners.
• As this was an extraordinary situation, all current unions namely National Union of Mineworkers, AMCU, Solidarity, and UASA as well as the employee' delegates, participated and were signatories to the agreement.
• Lonmin's wage bill is expected to rise by about 14% from 1 October 2012.

What this means for employees

• Total wage package increases are reflected on the following page.
• In addition to wage increases , general workers and Rock Drill Operators will be promoted to one level up.
• Rock Drill Operators will also receive a monthly drilling allowance.
• Workers will receive a R2000 bonus, which will be paid on or before 1 October 2012.

The way forward

• We are focused on restarting and ramping up production safely. 

• We have a first class asset and we continue to believe in the long term future for platinum.

LONMIN'S SIGNED OFFER

Underground rates including October 2012 increase

+ R2000 once off (before tax)

WAGE BREAKDOWN

As a percentage of total package (Underground rates)

Total Guaranteed Pay = basic + housing allowance + medical aid + provident fund + HLA

Excluding bonus

+ R2000 once off (before tax)

Issued by Lonmin, September 20 2012

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