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 said on Wednesday about 3,450 jobs would be lost in the proposed restructuring of the South African company’s gold mining operations, following financial losses at some of its mines since 2017.
The number of job losses is lower than a February forecast that put layoffs at about 5,870 employees and 800 contractors.
The precious metal miner said it had concluded talks with stakeholders on restructuring its gold operations following financial losses at the Beatrix 1 and Driefontein 2,6,7,8 shafts since 2017, with only 3,450 jobs now affected.
The number of job losses is lower than a February forecast that put layoffs at about 5,870 employees and 800 contractors
Voluntary separation, early retirement and natural attrition would account for the bulk of the affected jobs, with forced layoffs limited to about 800 employees and 550 contract workers, it said in a statement.
Gold producers in South Africa have had profits squeezed by rising costs, labour unrest and declining grades. But job cuts are politically sensitive in South Africa, where the unemployment rate is more than 27%.
“Although restructuring is a difficult and emotive process, the sustainability of our remaining operations is our primary focus,” Chief Executive Officer Neal Froneman said.
“To ensure further sustainability of the West Rand gold mines, avoiding premature mine closure will require an ongoing regional approach to reduce costs through the rationalisation of infrastructure and services, including a regional mine water management solution.”
As part of the agreements, Driefontein 8 shaft would remain in operation as long as it makes a profit, on average, over any continuous period of three months, after accounting for all-in sustaining costs, the miner said.
That shaft would provide extended employment for about 970 employees and 55 contractors, but in the event that the operation became loss making again, it would be placed on care and maintenance with immediate effect, Sibanye-Stillwater said.
Beatrix 1 and Driefontein 2 shafts would be placed on care and maintenance, while Driefontein 6 and 7 shafts and Beatrix 2 plant would be closed, the company said.
(By Nqobile Dludla; Editing by Louise Heavens and Edmund Blair)
