Dineo Faku
Sibanye Gold is in talks with labour unions and the government on possibly cutting 3 000 jobs at its Beatrix West Section in the Free State, following a fire that ravaged its underground operations last month.
Sibanye, which was formed in November after Gold Fields spun off its local assets, yesterday issued a section 189A notice in terms of the Labour Relations Act to its stakeholders, including the Department of Mineral Resources and labour unions, that signalled possible retrenchments.
The underground fire, which started on February 19, was a tipping point for Sibanye’s restructuring as the company lost 61 kilograms of gold a month, totalling about R28 million in revenue a month, the company said.
“The location of the underground fire has also prevented critical ore reserve development from taking place, thus impacting on the sustainability of the Beatrix West Section, and hence the long-term future of the operation,” James Wellsted, a Sibanye spokesman, said in a statement.
The fire, which continued to burn, had made matters worse as indications were that operations would probably not resume until June next year.
The cause of the fire was not known as the company had not been able to get back into the area for an assessment.
“This mine has never made much money and in fact never even managed to recover the capital that shareholders put up to develop the infrastructure and to sink the shaft. A sad story,” an analyst said yesterday.
Beatrix West was no longer viable because of the fire, Wellsted said.
“The Beatrix West Section cost R2.6 billion to develop, but has always been marginal and to date, has not been able to recover the initial capital spent,” he said. “It is clear that this situation needs to be addressed.”
Previously, a number of initiatives to address the production decline and rising costs were implemented by Gold Fields and the Beatrix West Section was kept operational in the hope that the situation would improve, he added.
The fire had affected 38 percent of the planned production area and resulted in the Beatrix West Section incurring cash losses currently and likely in the future, Wellsted said.
Lesiba Seshoka, the National Union of Mineworkers spokesman, was disappointed.
“When Gold Fields spoke of unbundling we raised concern that it was a short cut to retrenchments,” Seshoka said yesterday.
Of the 3 100 employees at Beatrix West, 2 800 were Sibanye employees and 300 were contractors, Wellsted said. Sibanye had 35 000 employees at its Kloof Driefontein complex and Beatrix mines.
As part of the process, the company will negotiate with stakeholders, including the Department of Mineral Resources and unions, to find alternatives over the 90 days before any action is taken.
According to Sibanye, Beatrix began as the Beisa Uranium Mine, which was commissioned in 1981 and idled in 1984 due to the low uranium price. In 1987, the mine was converted into a gold mine, and renamed Oryx Mine. Oryx was incorporated into the Beatrix Gold Mine and renamed as Beatrix 4 Shaft and subsequently Beatrix West Section.
Also engaged in retrenchment talks is Anglo American Platinum which announced 14 000 possible jobs cuts in January. It is still in consultation with its stakeholders.