Sibanye losses will be bigger than expected

SIBANYE Gold said yesterday that its losses for the six months to June would be bigger than expected as a stronger rand as well as a R2.8 billion impairment against its unprofitable Cooke shafts and Beatrix West mines hits its bottom line.

The group, which is to publish its interim results today, said it expected a loss of 324 cents per share and a headline loss of 147c per share for the period, which it said represented a 1 450 percent decrease in earnings per share and a 286 percent decrease in headline earnings per share.

Sibanye shares rose 6.94 percent on the JSE to close at R21.89 yesterday.

The company said that it had previously underestimated its performance in the period under review.

“Further to the trading statement released on August 17, 2017, shareholders are advised that Sibanye expects to report an attributable loss of R4.8bn for the six months ended June. Profit attributable to shareholders for the six months ended June 30, 2016, was R333 million,” the company said.

Earlier this month, the group attributed the expected loss to numerous non-recurring items as well as the rand strengthening 14 percent against the dollar in the period.

The company also said that it had recorded an R2.8bn impairment against the Cooke shafts and Beatrix West. The miner also incurred R402m in costs when it acquired US-based palladium miner Stillwater Mining.

It also expected to report a normalised loss of R1bn for the period, against an R2bn normalised earnings it reported in the comparative period.

Earlier this month Sibanye said it planned to shed about 7 400 of its employees at its Gauteng and Free State operations. The company has 58 000 employees in gold and platinum mines in South Africa. It also said it would set aside R1.1bn for a possible settlement with miners who contracted lung diseases at work in a class action suit, mostly relating to the fatal lung disease silicosis, filed on behalf of miners in 2012.

Its rivals, Gold Fields and Anglo American, have also put aside millions of rands in a possible settlement.

Meanwhile, Harmony Gold said yesterday that its rescue operations was just metres away from the place it thought the two unaccounted miners were trapped as the company looked at restarting operations as soon as possible.

Lauren Fourie, the Investor Relations Manager at Harmony said that the search and rescue efforts were making significant progress and expected the remaining two trapped to be brought to the surface soon.

Paul Mardon, the deputy general secretary of the occupational health and safety division at Solidarity, said 2017 had been a difficult year in the mining industry and several incidents had occurred.

“When the recent mine deaths are taken into account, it seems as if the number of deaths will exceed those of 2016. It appears as if the mining industry is losing its focus and dedication with regard to health and safety,” Mardon said.