SIBANYE-Stillwater confirmed an employee was killed in a fall of ground accident at its Driefontein mine, west of Johannesburg, this morning. The group’s head of investor relations, James Wellsted, said the accident occurred at 5am at the mine’s No 5 shaft.
The National Union of Mineworkers (NUM) said in a statement that three mineworkers had been trapped during the night shift. “Driefontein is running fast to break the record of fatal injuries in the mining industry within a short space of time,” it said. The union called for a ‘Day of Mourning’ at Driefontein which would shut operations.
“The fatalities that are happening at Sibanye-Stillwater are totally unacceptable,” the NUM said. Seven employees were fatally injured following a seismic event measuring 2.2 on the Richter Scale at Driefontein’s Masakhane shaft on May 3.
The news of another fatality is a further blow for Sibanye-Stillwater which yesterday issued a wide-ranging strategic and operational update in which it said the decline in the firm’s share price was “unwarranted”. Although selling in Sibanye-Stillwater shares are related to concern about its balance sheet, the issue of production interruptions following fatalities was also raised by the group.
It sought to play down the effects of the deterioration in safety levels at its gold mining operations. It had called a safety summit to address the problems – following seismicity and the death of seven employees – and would continue to press forward on the matter in line with Gwede Mantashe, mines minister’s, advice.
However, the economic impact was limited, it claimed.
The seven fatalities occurred at the Masakhane section of Driefontein mine which was suspended at the time following seismicity. There were also seismic events at the Kloof section, but these were described as normal geological events by the company. The impact on output was about 160 kilograms of gold, equal to 5,240 oz as of May 5.
However, damage to footwall infrastructure at Masakhane meant the section had to remain closed whilst repairs take place. As a consequence, there had been no production since the fatal accident which equated to an output loss of 289kg or some 9,200 oz. Masakhane’s production represents about 20% of Driefontein’s total daily output, and 7% of the daily gold output at Sibanye-Stillwater’s South African gold operations.
The response of Goldman Sachs – which in May said downward pressure on Sibanye-Stillwater shares was overdone – was that sentiment was governing investment choices over fundamentals. “As we highlighted recently, we see the recent sell-off as based on sentiment rather than fundamentals as gold/platinum group metal prices in rands have remained flat,” it said in a report.
“We see the balance sheet as being sound and not under duress. We believe this announcement should allay some investor concerns and be taken positively,” it said.
Shares in the company were up just under 2% by midday in Johannesburg representing the third successive day of gains after a largely miserable month in May. Prior to May 31, shares in Sibanye-Stillwater have fallen just over a quarter 30 days, and down 47% on a 12-month basis.
