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File picture: Siphiwe Sibeko/Reuters
File picture: Siphiwe Sibeko/Reuters

JOHANNESBURG - The Jobs bloodbath continued in the mining industry with Sibanye-Stillwater yesterday (Wednesday) confirming that almost 7 000 job would be shed at its Cooke underground mine, a gold and uranium producer in Randfontein. Sibanye-Stillwater said that 6 976 would be cut at Cooke as part of the restructuring of Cooke and Beatrix which were necessary to stem the cycle of losses at the mines. 

It said more than 2 000 employees would be retrenched with an additional 1 350 having already elected to take voluntary separation packages, the company said. It also said that a total 3 601 contractors had been ‘displaced’ while an additional 620 employees would replace contractors involved in non-critical activities across the group.

Sibanye-Stillwater chief executive Neal Froneman said the decision retrench workers was not taken lightly. “It is pleasing to note that we have managed to ameliorate job losses through the consultation process,” Froneman said, adding that the company saved 3 282 jobs, while ensuring the sustainability of our remaining operations and thereby securing over 60 000 jobs in South Africa. In the past five years alone, mining companies have cut 70 000 jobs as they battled to remain viable. Impala Platinum, Lonmin, AngloGold

Ashanti and Anglo American Platinum’s joint venture Bokoni also announced plans to shed jobs this year. 

File picture: Siphiwe Sibeko/Reuters

Sibanye-Stillwater, also said it had concluded the consultations with stakeholders in terms of Section 189 of the Labour Relations Act in which it was agreed that it would  place underground mining operations at the Cooke 1, 2 and 3 shafts on care and maintenance with effect from end October .

Beatrix West would continue to employ 1 640 people.  "In the event that Beatrix West becomes loss making, both the underground operation
and Beatrix 2 Plant will be put on care and maintenance with immediate effect," the company said.

Both the underground operation and Beatrix 2 Plant would be put on care and maintenance with immediate effect, while Beatrix West would remain in operation for as long as it made a profit.

Peter Major, a director for mining at Cadiz Corporate Solutions, blamed the politicians and unions for destroying the gold mining industry.

"It really does not matter where the gold price is, it is uneconomic to mine because the environment is toxic.Mineral Resources Minister for example has passed laws without any experience," he said referring to the strengthening of the gold price in the year to date to $1 278 an ounce.

Sibany-Stillwater, acquired Cooke underground and surface assets from Gold One, in May 2014 for its uranium and gold mineral resources and reserves contained in the surface tailings.

However, Cooke had underperformed, and fell short of production targets  which saw the closure of the Cooke 4 underground operations  last year.

The Cooke operations were hit by an illegal strike in June which started after the company stopped food from being taken underground after illegal miners also known as zama-zamas colluded with  Sibanye-Stillwater employees to gain entry into the operation.
Sibanye-Stillwater was established in 2012 after Gold Fields unbundled its ageing Beatrix, Cooke and Driefontein operations and rebranded after its acquisition of the Stillwater platinum asset in the US.

Rene Hochreiter, a mining analyst at NOAH Capital Markets, said that the retrenchments would stop the losses.

“The decision cut jobs is going to stop the losses and ensure that the gold division gets back in shape,” said Hochreiter. 

“Sibanye bought the asset for the tailings facilities and not the underground shafts,” adding that the Cooke assets had been performing badly and have a flood of illegal miners.
He also said that in the next five years it was likely that Sibanye-Stillwater would evolve into an exclusive platinum producer as its gold assets Kloof, Driefontein, and Beatrix were ageing.

- BUSINESS REPORT