Lonmin fears sackings could re-ignite South Africa violence

By Sherilee Lakmidas

JOHANNESBURG (Reuters) - The world's third-biggest platinum producer, South Africa's Lonmin, on Tuesday backed down from its threat to sack 3,000 striking mine workers, fearing the move could provoke more violence after police last week shot dead 34 miners in scenes reminiscent of apartheid bloodshed.

Most of the strikers, who faced a Tuesday ultimatum to return, stayed off the job as police helicopters hovered over Lonmin's Marikana mine, about 100 km (60 miles) northwest of Johannesburg.

Hit by lost production and revenues, the company said it may issue new shares "to strengthen its financial structure".

Analysts have speculated the company may turn to shareholders to raise new capital as it will reach its borrowing limits at the end of next month.

Lonmin said about a third of its 28,000 workers at the Marikana mine had returned to work. It had previously threatened employees with immediate dismissal for ignoring its ultimatum.

The 3,000 strikers are mostly rock drill operators, who say they should be paid more for their arduous underground work.

"Working underground is like making a fire in a room and closing all the windows and doors," said Isaac, a striking rock drill operator.

Thousands more employees had not returned to work because of worries about security and uncertainty whether there would be anything for them to do while most drilling remains shut down.