The much-anticipated listing of Sibanye Gold, the company formed after Gold Fields spun off most of its South African assets in December, is expected to be an indicator of the appetite for local mining assets among international investors.
Sibanye Gold will list on the JSE and the New York Stock Exchange on Monday with an estimated market capitalisation of R13 billion.
The separation of assets and subsequent listing comes after pressure from shareholders for alternative investment opportunities. Gold Fields will retain its international operations and the fully mechanised South Deep gold mine near Westonaria.
Sibanye comprises the Kloof-Driefontein Complex and the ageing Beatrix mine near Carletonville. The listing will allow shareholders to choose to invest in Gold Fields or Sibanye or both shares.
Valuations from brokers for Sibanye varied between R6 and R25 a share, Michael Schroder, the Old Mutual group equities portfolio manager, said yesterday. “My own guess is that Sibanye will trade at the lower end of this range because 75 percent of the shares will be owned offshore,” he added.
The local gold sector is grappling with deep level ore bodies, which are labour intensive and costly to mine. Mines have also struggled to contain labour unrest, in which more than 50 people died last year.
Should it be well received, Sibanye’s listing could become a catalyst for other gold producers to hive off their South African assets.
“If Gold Fields is successful, there might be an incentive for other companies to do the same. However, there is no guarantee that the listing will be a success,” Percy Takunda at Imara SP Reid said.
The National Union of Mineworkers (NUM) said yesterday that workers were expected to hand over a memorandum to Gold Fields today, to demand a commitment that the unbundling would not cost workers their jobs and that the same conditions of service would be guaranteed.
The NUM has accused the company of resisting calls to enter into an agreement that could avert job losses as a result of the unbundling and refusing to commit to retain current conditions of service.
Gold Fields dropped 0.8 percent to close at R104.64 on the JSE yesterday, giving it a market cap of R77bn.