Sibanye-Stillwater extended its gains on the JSE by eight percent on Thursday, despite announcing a restructuring exercise that could catastrophically cull nearly 3,000 jobs under its South African gold operations that have been hit by operational, safety and viability challenges at the Kloof 4 shaft.
The diversified precious metals miner extended its run as one of the top performing shares on the JSE yesterday, with its stock closing 7.92 percent higher at R29.71.
Market analyst Martin Rogers said yesterday that Sibanye-Stillwater “has struggled to fix the productivity issues, which was compounded by the August incident which caused significant damage” to the shaft infrastructure.
The latest restructuring exercise announced by Sibanye yesterday could affect as many as 2,389 employees and 581 contract workers at Kloof 4 shaft.
The operation has an average output of around 9,650 ounces of gold per month, making it an important production line for Sibanye as it accounts for about 14 percent of its annual bullion output.
But now, the head of Sibanye’s South African gold operations, Richard Cox, said the company was embarking on an attempt to limit the impact of Kloof 4 shaft on the rest of the gold producing operations.
South African mining industry players said yesterday that it was key for Sibanye to protect the rest of its gold production operations from the toxicity of Kloof 4 shaft, which was also having safety issues.
“We will engage with all relevant stakeholders in an effort to avoid job losses while attempting to limit the impact on the remainder of the operations and employees at the SA gold operations,” said Cox in a statement.
To this end, Sibanye revealed that it was entering into consultation in terms of section 189A of the Labour Relations Act (S189) with workers unions and other affected stakeholders regarding the possibility of the restructuring of the affected operation.
It stated that this was pursuant to “ongoing losses over an extended period and operational constraints” at the Kloof 4 shaft. The initiation of the S189 consultations comes against the backdrop of failed attempts by the company to “address productivity issues and other operational constraints” at the operation.
The recent incident at Kloof 4 shaft, which damaged infrastructure, has also worsened the situation as the shaft infrastructure suffered impairments.
All these developments “have resulted in a severe deterioration in productivity and have jeopardised the financial viability” of the Kloof 4 shaft.
However, negotiations will seek out measures to “avoid and mitigate possible retrenchments and seek alternatives to the potential cessation or downscaling of operations” at the key asset.
The mining sector is under scrutiny after a dramatic surge in deaths this year, which has left unions up in arms.
Business Report reported earlier this month that Harmony Gold announced that two employees tragically lost their lives at its Kusasalethu mine, following a fall-of-ground incident caused by a seismic event on Tuesday, September 5.
Harmony recorded six fatalities in its financial year that ended on June 30. It registered 13 deaths in the previous financial year.
After the announcement, the National Union of Mineworkers, South Africa’s biggest mineworkers’ union, said the mining sector had recorded 27 fatal accidents so far this year, with gold miners accounting for 15 of them.
Last year, South Africa recorded 49 mine-related deaths, its safest year on record, down from seven fatalities in 2021.
Latest data shows that South Africa’s gold production sagged 2.6 percent on a month-on-month basis from June to July. Overall, all metals mining output over the same period was 1.7 percent lower.