Tanisha Heiberg, REUTERS – 15 January 2019
Sibanye-Stillwater could cut nearly 6,000 jobs in a potential restructuring of the company’s gold mining operations following losses at some of its mines last year.
The precious metal miner said it had entered into talks with stakeholders on restructuring its gold operations following financial losses at the Beatrix 1 and Driefontein 2,6,7,8 shafts during 2018, which could affect around 5,870 employees and 800 contractors.
The company, which has both gold and platinum mines in South Africa, employs more than 61,000 people in its local operations.
“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,” Chief Executive Neal Froneman said in a statement.
Sibanye said above inflation cost increases, including labour and electricity, over the years and large mining areas had contributed to the erosion of operating margins.
“The mining areas are getting further and further away and more scattered so you are operating on a bigger and bigger footprint but producing less volume of gold so that all impacts on the profitability,” Sibanye spokesman James Wellsted said.
Gold producers in South Africa have had their profits squeezed by rising costs, labour unrest and declining grades.
But job cuts are politically sensitive in South Africa, where the unemployment rate is more than 27 percent, and especially ahead of national elections this year.
Mines minister Gwede Mantashe issued a statement noting the company’s decision. “Minister Mantashe urges stakeholders to engage in good faith to save jobs.”
The Association of Mineworkers and Construction Union (AMCU), the largest union at Sibanye’s gold operations which employs about 37,000 people, could not immediately be reached for comment.
Sibanye-Stillwater’s potential cutbacks are the latest in a round of job losses in the country’s mining industry.
Gold Fields said last year it planned to cut costs and 1,100 jobs at its South Deep mine and Impala Platinum said it planned to cut its workforce by a third over two years.
Sibanye said last month that its 2018 bullion production would miss forecasts and come in at 1.1 million ounces, even after the company implemented plans to curb losses following a strike.
A number of miners died at Sibanye’s South African mines last year, including seven who were killed in May after an earthquake caused a cave-in.
“Obviously issues like the safety instances and the strike does add to the financial pressure,” Wellsted said, adding that these were not the main cause for the operation’s troubles.
Sibanye’s shares rose 3.61 percent to 14.94 rand by 1335 GMT, outpacing the mining index which was up 1.6 percent, boosted the prospect that restructuring could improve its gold operations performance.
“A lot of the gold mines within Sibanye’s business aren’t profitable at this current level so they need to be in a position to contain costs and be able to improve their top line,” said Paul Chakaduka, trader at Global Trader.
Sibanye Stillwater issues section 189 notice
AMCU strike must end now because of life and job losses
Gideon du Plessis, General Secretary of Solidarity, said that the section 189 notice issued by Sibanye Stillwater which could lead to 6 678 (contractors included) job losses, did not come as a surprise. In June 2018, Sibanye had already indicated at the start of the salary negotiations that an unsatisfactory wage settlement could lead to thousands of job losses. The result in the end was that the trade unions Solidarity, Uasa and Num, after three months of intensive negotiations, signed a wage agreement towards the end of last year with Sibanye with the aim of limiting job losses, or to prevent the losses.
According to Du Plessis, it is regrettable that AMCU’s competent negotiators were replaced after three months of negotiations by new negotiators who did not even want to consider the sustainability of the gold sector and especially Sibyane, and clearly had ulterior motives. “The result was a destructive strike which has been going on since 21 November 2018,” Du Plessis said.
According to Du Plessis, the leadership teams of Solidarity and Num warned AMCU just after the strike commenced not to strike because of the imminent catastrophic results on all workers. “However, our appeals were not taken seriously, and the sad irony is that it is now mainly AMCU members who will be hit the hardest by the retrenchments,” Du Plessis said.
Du Plessis indicated further that it is mainly AMCU members who are working at the shafts operating at a loss and that these members have already lost three months’ salaries because of the strike. “If we use the multiplying factor of an average of 10 dependants per mineworker, AMCU has now dumped thousands of people in poverty. Apart from the job losses, a number of people have already been murdered and numerous houses were burnt down, which is directly related to the strike,” Du Plessis added.
Solidarity once again appeals to AMCU’s leadership team to, together with Eskom, stop being the biggest job destroyer in the mining sector and to end the strike. “The trade unions in the mining sector will rather have to sit side by side during the retrenchment consultations to find alternatives and solutions to prevent retrenchments, or at least limit them,” Du Plessis concluded.
~ Solidarity, 14 February 2019