Lonmin says Strike Halts South Africa Platinum Mine

A strike over a pay dispute by more than 2,000 union members halted production at a mine owned by the world's No.3 platinum producer Lonmin, union and company officials said on Wednesday.

Lonmin said the mine was relatively small, producing around 100 platinum ounces a day.

"I can confirm that the employees at the Limpopo operation are out on strike. There are around 1,600 employees at the operation and obviously we are not producing at the moment," spokeswoman Alex Shorland-Ball told Reuters.

"We're working with the National Union of Mineworkers to resolve the issue as soon as possible." She said the strike was not linked to Lonmin's plans for restructuring, which may be announced later this month.

Lonmin shares fell 6.67% in London and 4.45% in Johannesburg, against a 0.96% rise in the platinum sector index in South Africa.

South Africa's biggest mineworker union said the strike started on Tuesday evening, and would last until a solution was found to the dispute.

The strike was triggered by the collapse of long negotiations on the equalisation of pay for workers at Lonmin's Limpopo mine and its other operations, Lesiba Seshoka, the spokesman for the National Union of Mineworkers (NUM) said.

The union said in a statement that it wants Lonmin to equalise pay between the Lonmin workforce in Limpopo and its workforce in Rustenburg.

"The strike will last as long as the problems are there and as long as the company does not come up with a solution," Seshoka told Reuters.

"There are huge gaps in wages that are earned by these people; 2,000 members means a total closure as we speak. It started with the night shift last night at 6pm."

Lonmin has advised trade unions of possible lay offs due to a big drop in demand for the metal from car makers, worsened by the current global economic meltdown.

Car makers consume more than half of the annual global platinum output to make catalysts that help clean exhaust fumes.

Lonmin also told unions in a letter dated 24 October that it would present a revised structure of a "more effective and smaller Lonmin" to its employees. The firm has said it was currently evaluating its mines, and would speak about the process on 18 November, when it publishes its annual results.

Reporting by Agnieszka Flak and Eric Onstad in London; writing by James Macharia, Reuters.