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.
South Africa’s Sibanye-Stillwater (JSE:SGL) (NYSE:SBGL) is letting go 5,270 workers at its Marikana platinum mine, as the company restructures the operation, which has been running at a loss.
The Johannesburg-based precious metals miner, which took possession of Marikana through a recent merger with struggling rival Lonmin, said the goal was to return the mine to profit and ensure the sustainability of the remaining shafts.
The precious metals miner said that 3,904 were permanent positions, while 1,366 were contractors
“Overall, the outcome will be a more sustainable business which is able to secure employment for the majority of the Marikana workforce for a much longer period,” chief executive Neal Froneman said in a statement.
The number of jobs losses are significantly higher than the 3,000 originally estimated as a result of the Sibanye-Lonmin merger, which created the world’s largest platinum producer and the second-biggest palladium miner.
The company, however, said the cuts were less than what Lonmin had communicated in 2017 and that they would be subject to a consultation process aimed at mitigating retrenchments and seeking options to the closure or downscaling of operations at the affected shafts.
Job cuts in Africa’s most industrialized economy are politically sensitive, with the unemployment rate hitting a 11-year high of 29% in the second quarter of the year, affecting mostly poor local workers.
The Marikana mine, located near Rustenburg, about 112km from Johannesburg, was the scenario of an infamous workers massacre. The shootings took place in August 2012 and are considered the most lethal use of force by South African security forces against civilians since 1976.
