Sibanye unveils R50m profit plan for Cooke 4

[miningmx.com] – SIBANYE Gold said it would increase the profitability of its Cooke 4 section by up to R50m following a restructuring in which job losses were kept to 430 out of a possible 1,776 that were first at risk.

The firm unveiled a range of measures including adopting a new work cycle, voluntary retrenchments and, interestingly, an agreement with the National Union of Mineworkers that Cooke 4 desist from strike action in the event of a pay dispute.

Neal Froneman, CEO of Sibanye, hailed the pact with workers and added that “.. the measures we agreed on have been implemented at the Cooke 4 mine”.

This is despite ongoing discussions with the Competition Commission regarding “… certain elements of Section 189 [restructuring notice],” said James Wellsted, head of corporate affairs for Sibanye Gold. “This agreement is valid,” he said.

It emerged in November that the commission questioned Sibanye Gold’s decision to reduce the workforce at the shaft arguing that Sibanye had undertaken not to restructure the asset for two years following completion of the takeover.

The centrepiece of the agreement is the new work cycle which in essence is an agreement to work six days a week every week and on four public holidays which is equal to having an additional 22 working shifts a year.

The upshot is that 213 jobs were saved due to the additional employees required to work the shifts and the anticipation that the profitability at Cooke 4 would be increased by R40m to R50m a year assuming a gold price of R415,000/kg to R470,000/kg.

“I am very pleased that we have again, with the co-operation of our employees and organised labour, managed to arrive at a mutually agreeable outcome,” said Froneman.

In May 2013, Sibanye stayed the axe over two-thirds of 3,300 workers affected by restructuring at the group’s Beatrix West using retrenchment avoidance measures.

In total, there was a reduction of 392 employees in the Cooke 4 mining employee complement, equal to 16% of a total of 2,403 employees and a reduction of 38 workers at the Ezulwini Plant or 16% of a total of 238 employees.

The Cooke assets were bought from Gold One International in 2013, but only consummated recently, using Sibanye Gold shares.

The Cooke 1-3 shafts have estimated gold reserves of 2.8 million ounces and resources of 22.65 million ounces – enough to sustain operations for 13 years whereas Cooke 4 is the site of the Ezulwini uranium processing facilities.

The assets also include surface operations which are building up to 400,000 tonnes a month of tailings and that could be combined with Sibanye Gold’s West Rand Tailings Re-treatment Project.