Background:
JSE and NYSE-listed Sibanye-Stillwater has initiated consultations with organized labor and other stakeholders regarding the potential restructuring of its South African gold operations.
The decision to consider restructuring comes in response to sustained losses and operational challenges at the Kloof 4 shaft in Gauteng, South Africa.
Sibanye-Stillwater has faced difficulties at the Kloof 4 shaft, including seismicity issues and cooling constraints linked to the chilled water reticulation circuit.
In late July, significant damage occurred to shaft infrastructure when an ascending counterweight encountered an obstruction in the shaft during a safety trial run, although no injuries were reported.
These issues have led to a deterioration in productivity and have jeopardized the financial viability of the Kloof 4 shaft, which produces over 115,000 ounces of gold annually.
Possible Impact and Measures:
The potential restructuring could affect approximately 2,389 employees and 581 contractor employees.
Sibanye-Stillwater aims to mitigate possible retrenchments through the formal consultation process, following Section 189A of the Labour Relations Act.
The company will engage with stakeholders to explore alternatives to potential cessation or downscaling of operations and services.
The goal is to avoid job losses and minimize the impact on the remaining operations and employees at the South African gold operations.
This announcement follows a similar situation last year when the company issued Section 189 notices at its Beatrix mine and Kloof 1 plant. The process resulted in approximately 170 workers being retrenched, compared to the initial threat to about 19,500 jobs.
Sibanye-Stillwater’s half-year results ending in June saw improved earnings from its South African gold business due to higher gold prices.
CEO’s Statement:
CEO Neal Froneman previously stated that the gold business faced generalizations about being high-cost and unprofitable but noted that significant portions of the business were performing well. Areas with challenges were being addressed, with various scenarios under consideration.
