[miningmx.com] – SIBANYE Gold stayed the axe over two-thirds of 3,300 workers affected by restructuring at the group’s Beatrix West, a 7,000 ounce a month section part of which was recently shut owing to an underground fire.
The R5.6bn gold producer said today that while it hadn’t been able to provide alternative measures to keep Beatrix West open indefinitely, it would first cut workers on its development areas and work on steps to make it profitable.
“Although alternatives to the eventual termination of operations have not been found, as a result of a concerted production effort by the Beatrix West team, job losses have largely been limited to development employees, thereby providing continuing employment to stoping employees for longer,” the company said in a statement.
“This arrangement will remain in force as long as the Beatrix West Section operates profitably and has stope face to mine,” it said. Shares in Sibanye Gold ticked up 1.6% today in line with the performance of other gold stocks on the JSE.
The outcome of the restructuring at Beatrix West is that of the 3,300 full-time employees and contractors at the mine, some 1,030 will be affected consisting of 330 development and secondary crew employees, and a further 780 “over-complement positions being reduced at the Beatrix operations as a whole”.
James Wellsted, head of corporate affairs at Sibanye, said some employees would be redeployed to mines within the group. He couldn’t be sure, however, how long Beatrix West would be kept open. Even if it remained profitable in the short-term, stopping development effectively gives a limited life to the mine.
Weakness in the rand/dollar exchange rate has helped relieve some of the pressure from the decline in the dollar gold price.
At 9.78 to the dollar, the rand gold price is about R438,000 per kilogram, some 6.8% lower than Sibanye Gold’s average price received in the first quarter. In comparison, the gold price has fallen about 18.6% this year.
“There was a lot of doom and gloom when the gold price fell but people always forget about the compensatory effect of the rand. It definitely provides a cushion,” said Wellsted.
The Section 189 restructuring notice, issued in terms of South Africa’s Labour Act, remains in place at the mine.
However, negotiations with unions had been positive, said Sibanye Gold CEO, Neal Froneman, who earlier this month irked the National Union of Mineworkers by declaring employees strike-weary.
“The process had proceeded in a mature manner with management, organised
labour, non-unionised employees and all stakeholders contributing positively to the negotiation process and the unfortunate commercial realities,” Sibanye Gold said.
Beatrix West’s difficulties arose in February 19 when a fire broke out the result of which was to temporarily shut part of the section for at least a year.
Although Beatrix West generates a quarter of the entire Beatrix output, it carries 51% of total electricity costs attributable to the complex.
