LONMIN PLC - Lonmin signs three-year wage agreement with AMCU

Lonmin signs three-year wage agreement with AMCU

Lonmin Plc (Incorporated in England and Wales)
(Registered in the Republic of South Africa under registration number 1969/000015/10)
JSE code: LON
Issuer Code: LOLMI & ISIN : GB0031192486 ("Lonmin")


REGULATORY RELEASE


31 October 2016


Lonmin signs three-year wage agreement with AMCU

Lonmin Plc (“Lonmin” or “the Company”) announces the conclusion of negotiations with the Association of
Mineworkers and Construction Union (“AMCU”) about wages and conditions of service. The agreement
applies to all employees within the bargaining unit in job grades Paterson A4 to C4. The three-year
agreement, which is effective from 1 July 2016 to 30 June 2019, provides employees with a realistic and
competitive settlement and ensures the continued sustainability of Lonmin.

Commenting on the signing today Chief Executive Ben Magara said: “We are delighted to have achieved a
multi-year agreement. We have all worked hard to engage each other honestly and respectfully since the
long strike of 2014 and this agreement illustrates the emerging maturity of the relationship between the
Company, employees and their union representatives. Testament to this level of maturity is the reorganisation
process that took place last year which lowered our costs and took place without any labour disruption or work
stoppages as well as the current wage negotiation process which has been concluded amicably. We must all now
concentrate on improving productivity and reducing costs and ensuring a sustainable basis for future
employment.”


The key points of the agreement are:

    -   Increases for Cat 4 to 9: R1,000 per year or 7% (whichever is greater) on basic salary
    -   Increases for Officials (B and C band): 7% on Total Cost to Company for each year of the agreement
    -   Living Out Allowance increases by R100 in each year of the agreement
    -   Allowances calculated off pensionable basic
    -   Rock Drill Operator allowance increases by 6% in each year
    -   Holiday Leave Allowance (HLA) calculated off Normal Basic from year 2 (1 July 2017)
    -   Medical contributions for Cat 4-9 employees will increase in January of each year. The medical aid
        contributions increase will be based on the medical aid inflation as determined by the Board of Trustees of
        the medical aid. The increase is estimated to be 13.5%.

At the end of this wage agreement, a Rock Drill Operator at Lonmin will earn R12 296 (basic salary) and a
guaranteed package of R19 455.

The impact of the wage agreement for this bargaining unit is an increase of 7.8% in financial year one,
8.0% in financial year two and 7.1% in financial year three or an average of 7.6% over the three-year
period.



                                                          
Below is an example of the basic agreed guaranteed packages for Cat 4 – 9 employees. These figures
exclude overtime and safe production bonuses which make up a significant part of employees’ wages.




                        LOWEST PAID ENTRY LEVEL UNDERGROUND EMPLOYEE
                               Basic                Cash                   Guaranteed
              Date             Salary           Remuneration                Package
             Current           8 713               11 614                    13 452
              1 July           9 713               12 768                    14 672
              2016
              1 July           10 713               14 126                   16 199
              2017
              1 July           11 713               15 328                   17 588
              2018



                                        ROCK DRILL OPERATORS
                                Basic               Cash                   Guaranteed
              Date             Salary           Remuneration                Package
             Current           9 296               13 152                    15 085
              1 July           10 296              14 363                    16 368
              2016
              1 July           11 296               15 770                   17 950
              2017
              1 July           12 296               17 043                   19 455
              2018




                                                       
ENQUIRIES

Investors / Analysts:
Tanya Chikanza (Head of Investor Relations)      +27 11 218 8358 /+44 207 201 6007

Andrew Mari (Investor Relations Manager)         +27 11 218 8420

Media:
Wendy Tlou                                          +27 83 301 9663



Cardew Group                                        +44 207 930 0777
Anthony Cardew/Emma Crawshaw


Notes to editors

Lonmin, which is listed on both the London Stock Exchange and the Johannesburg Stock Exchange, is one
of the world's largest primary producers of PGMs. These metals are essential for many industrial
applications, especially catalytic converters for internal combustion engine emissions, as well as their
widespread use in jewellery.

Lonmin’s operations are situated in the Bushveld Igneous Complex in South Africa, where more than 70%
of known global PGM resources are located.

The Company creates value through mining, refining and marketing PGMs and has a vertically integrated
operational structure - from mine to market. Underpinning the operations is the Shared Services
function which provides high quality levels of support and infrastructure across the operations.

For further information please visit our website: http://www.lonmin.com


 Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd




                                                   

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