Myriad issues spur Sibanye to cut output forecast
Sibanye said on Monday it had lowered its 2018 South African gold output forecast by 6% to between 1.17-million and 1.21-million ounces because of the safety incidents, the halt of mining at part of the Masakhane mine affected by a seismic event in May and a power disruption at its Beatrix mine.
Of the 43 fatalities at SA’s mines in 2018, 21 were at Sibanye’s gold mines, drawing stinging criticism from unions, nongovernmental organisations and a class action suit in New York seeking a trial by jury of CEO Neal Froneman and chief financial officer Charl Keyter who are alleged to have been "aware of or recklessly disregarded the fact that the false and misleading statements were being issued concerning the company" around safety.
On Monday, Froneman and his management team hosted a conference call with South African and US analysts to tackle concerns around the firm’s dismal safety performance, outlining meetings with unions and the Department of Mineral Resources to agree on a joint strategy to make its mines safe.
Part of the plan was an independent investigation of its gold mines, which would also focus on the safety of underground areas deliberately left untouched by Gold Fields, which unbundled three deep-level gold mines into newly listed Sibanye in 2013.
Citi analyst Johann Steyn has criticised Sibanye for mining what the industry calls "pillars", blocks of unmined ore designed to stabilise working areas.
Froneman was at pains to stress that Sibanye was not mining pillars but "white areas", which were blocks of ore left behind because they were low grade and geologically difficult to access and mine.
Froneman said the board had given its full support to the executive despite the slump in safety statistics, with all the fatalities occurring in areas or during events unrelated to mining the white areas. He declined to comment on the US class action beyond saying it would be "vigorously" defended.