Sibanye to axe 1,110 after new-look deal
‘We were flexible in our thinking’
SIBANYE Gold management and unions have staved off thousands of jobs cuts at the struggling and fire-ravaged Beatrix West mine, in a fraught mining environment.
The announcement from SA’s largest gold producer came a day after Mineral Resources Minister Susan Shabangu said her department was urgently looking at a rescue plan for the troubled gold and platinum sectors.
Anglo American Platinum (Amplats), the world’s largest miner of the metal, has come under political pressure, not least from Ms Shabangu, to revisit its restructuring plans, causing unease among investors about state meddling in companies’ business decisions.
Amplats had initially proposed 14,000 job cuts, and has revised that down to 6,000 but Ms Shabangu wants to reduce that number still further.
Sibanye, formed when Gold Fields unbundled three old, deeplevel gold mines in SA into a newly listed company, had said that up to 3,000 jobs could be cut at Beatrix West after a fire shut the Free State mine in February.
Beatrix West contributed 80,000oz/year of gold, a quarter of Beatrix’s annual output.
Sibanye CEO Neal Froneman said yesterday that 1,110 jobs would be cut, with 330 workers used to develop and open new areas of the mine being affected.
Another 780 jobs would be cut from the entire Beatrix mining operation in the Free State.
Halting development expenditure cut costs sufficiently to return the mine to breaking even, if not making a small profit, at the prevailing gold price of R437,000/kg. There is enough development underground to keep the mine running for a year.
“A lot of positive things can happen, but companies can’t keep taking risks and being charitable
institutions because it has a knock-on effect for the rest of the business,” Mr Froneman said.
He praised the unions, including gold sector newcomer the Association of Mineworkers and Construction Union, for playing their part in keeping the mine open.
“We did it by the book. The unions came up with some solutions and we were flexible in our thinking. This is the end result,” he said.
“The commercial viability of businesses is extremely important and shareholders frown upon any interference that tries to prevent that.”
Asked if Sibanye had come under political pressure to curtail job cuts, Mr Froneman said: “We’ve got the national interest at heart, but will always try to do the right thing irrespective of criticism from our shareholders, the government or labour. We went out of our way to talk to the government and all stakeholders but you can’t always get their support because it’s a lousy thing to do.”
Imara SP Reid analyst Percy Takunda said Sibanye was treading carefully ahead of wage talks starting in the next few weeks.
“These mining companies are maybe playing a bigger PR (public relations) role than they care to admit because there’s all this pressure of impending wage strikes,” he said.
Solidarity secretary-general Gideon du Plessis said talks would be held under the auspices of the Commission for Conciliation, Mediation and Arbitration to decide how to cut the workforce without forced retrenchments.
The National Union of Mineworkers said it had not agreed to any retrenchments of workers at Beatrix West, saying it had agreed to a voluntary separation process to cut the workforce.