Sibanye to ‘win hearts and minds of workers, seek platinum assets’
SIBANYE Gold will focus on winning the hearts and minds of its employees and outlined a plan yesterday to diversify into the platinum sector as well as grow its uranium business.
The firm posted an improved performance in the six months to June, with operating profit rising 4 percent to R3.5 billion despite the fall in the gold price.
Sibanye, South Africa’s second-biggest gold producer, was listed on the JSE last year after unbundling from Gold Fields and has outperformed its peers as a low-cost producer. The unbundling was aimed at giving shareholders the flexibility to invest internationally.
The company declared a 50c interim dividend.
“Based on the total number of shares in issue this dividend is equivalent to 42 percent of normalised earnings, which is above the 25 percent to 35 percent range defined in Sibanye’s dividend policy,” Sibanye chief executive Neal Froneman said.
The firm was confident it would maintain the dividend up until 2028 based on its gold mineral reserves.
“We’ve broadened our focus and are addressing issues [that are key to] winning the hearts and minds of our employees and stakeholders… for longterm success,” Froneman said.
This included assisting staff with personal financial management, especially indebtedness and home ownership.
In June, the Labour Court upheld an interdict to prevent a plan to strike for wages by the Association of Mineworkers and Construction Union.
Sibanye has previously aired its intention to invest in platinum, saying its operations shared many similarities with platinum, including experience in hard rock and tabular and conventional mining methods.
Froneman said the longterm platinum market outlook was robust and deals would be funded by either debt or equity.
A plan to buy platinum assets this year would be delayed and a deal would not be sealed for up to six months as public sales took time, Froneman said.
He was was referring to Anglo American Platinum’s plan to disinvest from its labour-intensive Rustenburg and Union operations, and possibly pull out of two joint ventures, which would take some time.
Sibanye has announced a R151 million loss relating to its 33.1 percent share in Rand Refinery. Last week South Africa’s leading gold producers, including Sibanye, gave Rand Refinery a R1.2bn loan after it reported that 87 000 ounces of gold went missing in an accounting discrepancy.
Sibanye forecast that uranium production at its newly acquired Cooke plant would be 500 000 pounds a year by 2016. It has a uranium mineral resource of 283.3 million pounds.
Production at Kloof rose 15 percent to 239 800 ounces, while output at Driefontein rose 3 percent to 247 400 ounces. The fire at Driefontein in the March quarter cost the company 40 mining shifts.
The shares fell 6c to R25.44.