Sibanye-Stillwater’s planned restructuring exercise which could result in the retrenchment of 4095 employees at its South African platinum group metals operation will bring a “bleak and dark Christmas” for the 40 000 or so people dependent on the affected workers, said a labour union yesterday, describing the action by the company as “cold and clinical”.
Big mining companies such as Anglo American and Glencore have started culling jobs at South African head offices and operations, coinciding with a commodity price downturn. In September, Sibanye also announced a restructuring exercise that could lead to the laying off of as many as 3000 mineworkers at the Kloof 4 Shaft that is saddled by safety and viability challenges.
Mining operations at the Simunye shaft, Kroondal operation, ceased during quarter 2022 as planned.
Operations at the 4 Belt (4B) shaft, Marikana operation, which already faced closure during the restructuring of the Marikana operation in the second half of 2019, continued operating for the past four years, but has now depleted its economically extractable reserves and reached the end of its life.
The Rowland shaft, Marikana operation, had not delivered as planned for an extended period due to various operational constraints and had achieved only 64% of planned production in the year to date.
The Siphumelele shaft, Rustenburg operation, experienced significant seismic activity during 2022 which, for safety reasons, restricted access to certain planned production areas. As an alternative to closure, right sizing of the workforce to support the current reduced average annual production forecast was proposed.
Gideon du Plessis, the general secretary for Solidarity labour union, told Business Report yesterday that although the decision by Sibanye to retrench 4000 employees at its PGM operations in South Africa had not come as a surprise, it would have far-reaching implications on the economy and those affected.
“This doesn't come as a total surprise because (Sibanye CEO) Neil Froneman did hint towards it a few weeks ago that they are contemplating retrenchments. There are two things to look at: first of all, you apply the multiplying effect and look at 4000 employees times 10 dependants, which means it's already 40000 people affected, and then the local economy is being affected, and normally there are contractors affected,” Du Plessis said.
Attempts to reach the National Union of Mineworkers and Association of Mineworkers and Construction Union for comment were unsuccessful by the time of going to print.
Sibanye said yesterday that it would enter into consultations with organised labour and other affected non-unionised employees a possible restructuring of four shafts at its South Africa platinum operations. It described two of the affected shafts as mature, with one having already ceased production last year and the other nearing the end of its operating life due to depletion of economic ore reserves.
The other two were in need of a restructuring to achieve sustainable production, explained Sibanye, adding that “above inflation increases in key cost components such as electricity and water tariffs, wages, fuel and other consumables costs over several years” had impacted profitability of the PGM industry.
Investors in the resource firm’s stock on the JSE reacted indifferently to the news of a possible retrenchment, with Sibanye shedding 2.28% to R23.62 in yesterday’s trade session. The company’s stock appreciated 7.92% when it announced a restructuring exercise at the Kloof 4 Shaft last month.
Platinum prices have been softer this year, eating into miners’ bottom lines and reducing profitability. Platinum prices are currently trading below $900 (R17 158) per ounce compared to prices of around $920 for September 2023 and are set to close this quarter much lower at about $875 according to some projections.
As a result of these factors, some of Sibanye’s operating shafts are now making losses for the company, hence they “pose a risk to the sustainability of the remaining” operations. While operations at the Simunye shaft and the Kroondal operation stopped operating last year, there are some employees from these mines who had not been re-deployed to other shafts and could be impacted under the latest restructuring.
Du Plessis described the decision by Sibanye-Stillwater to institute a restructuring exercise that would impact 4000 mineworkers as “cold and clinical”, saying the miner “works with numbers as if it's not people” regarding the retrenchments.
“The thing that annoys me most is that there's no sympathy, no empathy. You look at the timing, it's just before Christmas; so it's a very bleak and dark Christmas for all affected,” he said.
Although Solidarity was open to going through with the process of consultations as outlined by Sibanye to ensure that retrenchments are an act of last resort, Du Plessis said the union would try and see how many jobs it could save through transfers. He also criticised Sibanye for putting profits ahead of the welfare of employees.
“On the one hand, you reduce staff, you put them in poverty, and on the other hand you then increase your profits and (pay) bigger bonuses for the executives,” he said.
Richard Stewart, Africa chief regional officer for Sibanye, said the company, which is also a major gold producer, did not “underestimate the potential impact of any form of restructuring”. He said Sibanye was committed to “constructively engaging with affected employees through their representatives in an effort to minimise” job losses.
“Unfortunately, it is imperative that we engage in this process to ensure the sustainability of our SA PGM operations and the benefits and value they bring to multiple stakeholders,” he said.