Sibanye Stillwater Ltd. said it will enter talks with labor unions over a possible restructuring at one of its South African gold mines that could impact almost 3,000 people.
(Bloomberg) — Sibanye Stillwater Ltd. said it will enter talks with labor unions over a possible restructuring at one of its South African gold mines that could impact almost 3,000 people.
The announcement is the latest blow for the company’s Kloof 4 shaft, where operations were suspended on Aug. 1 following an incident that damaged infrastructure. That “compounded” the challenges faced at the mine about 60 kilometers (37 miles) from Johannesburg, the company in a statement Thursday.
The initiation of formal consultations “follows numerous unsuccessful attempts to address productivity issues and other operational constraints,” which have contributed to sustained losses even at high gold prices, Sibanye said.
The setback comes after Sibanye turned around its previously loss-making gold operations in the first six months of the year. The company — spun off from Gold Fields’s oldest South African mines in 2013 — is struggling to squeeze profits from mines that are among the deepest in the world and are becoming more costly to run.
Sibanye – one of the biggest employers in South Africa – has diversified into platinum group metals and battery metals as it shifts away from its original dependence on gold mining. The company’s shares rose as much as 6.3% after the announcement, the biggest gain in almost five months.
A restructuring at the so-called Kloof 4 shaft could affect 2,389 employees and 581 contractors, Sibanye said. The Kloof mine — which has three shafts still in operation — accounted for nearly 30% of the approximately 417,000 ounces of gold produced by the company in the first six months of the year. Almost 10,500 people work at the mine.
“We will engage with all relevant stakeholders in an effort to avoid job losses,” Executive Vice President Richard Cox said in the statement. The parties will “consider measures to avoid and mitigate possible retrenchments and seek alternatives to the potential cessation or downscaling of operations,” the company said.
The National Union of Mineworkers is “not happy at all” with Sibanye’s announcement, spokesman Livhuwani Mammburu said by phone. The NUM is still being briefed about the company’s plans and is ready to represent its members employed at Kloof in the consultations that are legally required to last at least 60 days, he said.
A spokesperson for the Solidarity union said they couldn’t comment without seeing the full paperwork.
(Updated with labor union comments in final paragraph)
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