Sibanye confirms Cooke 4 may restructure

[miningmx.com] – SIBANYE Gold confirmed it had entered into a 60-day consultation with unions at its Cooke 4 gold shaft on the West Rand, but downplayed fears that up to 2,500 jobs would be lost in possible restructuring.

“We are still hoping to continue with the operation,” said James Wellsted, head of corporate affairs at the gold producer. “We need to look at Cooke 4’s costs and viability as it is generating higher losses than we were planning for,” he said.

An industry source said last night that Cooke 4 could be closed with the loss of every job at the section which was a confusing development because the shaft had been a top performing operation.

Wellsted said, however, that Cooke 4 had suffered a series of interruptions related to industrial action which resulted in development delays. However, the section was also the site of the Ezulwini plant from which Sibanye is producing uranium.

“The plant was the key reason for buying Cooke 4 so we will now enter into a negotiation to see what we can do,” he said.

Sibanye Gold said in a statement to the JSE this morning that it had enjoyed successes at its Beatrix West Section in April 2013 following an underground fire which threatened the viability of the operation.

“Remedial action and restructuring undertaken following the section 189 consultation process, resulted in a significant improvement in profitability at Beatrix West
Section and an extension of its forecast operating life,” it said.

Based on forecasts in the gold firm’s June quarter presentation, Cooke 4 is worth about 50,000 ounces of gold production compared to 200,000 to 250,000 oz/year that would be produced from Cooke 1-3 shafts.

Whereas Cooke 1-3 shafts are estimated to produce 200,000 oz/year well into 2018 to 2019, production from Cooke 4 is forecast to have ceased by then. It’s possible, if the speculation is true, that Sibanye Gold may just keep the plant open and cut gold output in order to bring Cooke’s overall costs down.

The Cooke operations have gold reserves of 2.8 million ounces and resources of 22.65 million ounces – enough to sustain operations for 13 years.

They 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.