Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Sibanye Stillwater Ltd. halted work at its three gold mines in South Africa from Wednesday evening after workers began a strike over wages.
The Johannesburg-based miner implemented a so-called “lockout,” barring all workers, including those from the Solidarity labor union that accepted its wage offer, from accessing the sites, said spokesman James Wellsted.
Mining activities at Driefontein, Kloof and Beatrix mines were halted from Wednesday evening, except for essential services such as pumping water, he said. Sibanye had already temporarily stopped processing activities at Beatrix until April because of safety issues.
Wellsted said the strike, called by the Association of Mineworkers and Construction Union and the National Union of Mineworkers, could threaten the outlook for the mines and force further restructuring if the action is prolonged.
“We will have to restructure as the older shafts reach the end of reserves as per our life-of-mine plans and clearly a long strike could impact those current plans,” he said. “We are obviously trying to avoid additional restructuring, but it depends on how long the strike lasts and the impact.”
Sibanye’s shares slumped 4.8% by the close of trading in Johannesburg on Wednesday, paring this year’s gain to 37%. The company isn’t paying workers while they are on strike and it’s also suspended activities such as the ventilation of underground tunnels to help reduce electricity costs, the spokesman said.
The length of the strike could depend on negotiations between the unions and Sibanye, NUM acting General Secretary William Mabapa said by phone. Mabapa confirmed that workers are now prohibited from reporting for duty due to the lockout. Sibanye employs about 31,000 workers at some of the world’s deepest and highest-cost gold mines.
(By Felix Njini)
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