Neal Froneman. Picture: SUNDAY TIMES
Neal Froneman. Picture: SUNDAY TIMES

Sibanye-Stillwater has launched a formal process to restructure a number of its unprofitable gold mines, with the potential loss of up to 6,670 jobs.

Sibanye, which advised the market its full-year loss would narrow to R1bn for the 12 months to end-December from R4.4bn a year earlier, has been hit by a three-month strike at its gold assets.

However, the restructuring of the shafts is not directly related to the strike called by the Association of Mineworkers and Construction Union (Amcu) on November 21 to demand a wage increase of R1,000 a month, said company spokesperson James Wellsted.

“We’ve been talking to the unions at monthly ‘future forum’ meetings about this matter, so it’s not new and not directly as a result of the strike,” he said.

“The strike has meant that we’ve not had the unions coming forward to suggest ways to resolve the problems the way they did at Beatrix a few years ago,” he said.

The affected shafts are Beatrix 1 in the Free State and numbers 2, 6, 7 and 8 at Driefontein. There are 5,870 employees at the mines and a further 800 contractors.

“Our best attempts to address the ongoing losses at these operations have, however, been unsuccessful and sustaining these losses may threaten the viability of our other operations,” said CEO Neal Froneman. “We hope to engage constructively with our stakeholders to find ways to minimise and avoid job losses during this process, while ensuring that additional jobs are not placed at risk in future.” 

Sibanye has twice saved its Beatrix 4 shaft by talking to unions and finding ways to keep the mine profitable, he said.

Sibanye has notified the department of mineral resources in terms of the Mineral and Petroleum Resources Development Act (MPRDA) that the shafts are unprofitable and that it is talking to unions at those mines, Wellsted said, adding that due to the ongoing difficulties at the shafts the company has embarked on a Section 189 process to restructure the mines in terms of the Labour Relations Act.

Image: Iress

Meanwhile, Sibanye has said its full-year loss narrowed because of stronger prices for its platinum group metals (PGMs) that were offset by losses at the gold operations. It will report full-year results on February 21 when Froneman will elaborate on the impact of the strike on the gold business.

Sibanye's shares increased by 4% to R14.98 each on Thursday morning on its results outlook. This was a 12-month high for the R34bn company which has gold mines in SA and platinum group metal mines and plants in SA, Zimbabwe and the United States.

There were large impairments against the discontinued Cooke mines and assets at Beatrix during 2017 that would not be repeated in 2018’s numbers.

Sibanye will report a deferred tax credit of R511m for 2018 against a R3.5bn deferred tax credit in the previous year because of lower corporate taxes in the US, where it owns the Stillwater Mining palladium and platinum mining and recycling operation.

Sibanye has made an all-share bid for world number three platinum miner Lonmin, a process that has stalled because of an appeal by Amcu against the Competition Tribunal granting highly conditional approval for the deal to go ahead.

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.