SIBANYE-Stillwater said it would challenge any formal effort by the South African government to have its mining licences withdrawn from its gold mines amid a strike at the operations.
The strike over wages has been underway for more than 10 weeks. Tensions rose last week after the South African mines minister Gwede Mantashe – responding to comments Sibanye-Stillwater CEO Neal Froneman made to Miningmx – said he would withdraw the firm’s licences if it did not want to mine.
Froneman told Miningmx his company could last “for years and years” without having to mine its gold, implying unions would crack first over the wage impasse. Froneman also told Miningmx he would provide unions with “a back door” – or elegant way out of the strike – if they wanted to accept the firm’s offer.
Speaking to BusinessLive, the company’s spokesman James Wellsted commented that the firm reserved the right to protect the interests of its stakeholders through appropriate legal channels.
BusinessLive added that the government’s threats were without substance. “I don’t think Mantashe is going to get far with it. The mines are on strike. I think he will not get anywhere in court,” said René Hochreiter, a consulting mining analyst at Noah Capital Markets and Sieberana Research.
James Lorimer, DA spokesperson on mineral resources & energy, also cautioned against such a move, saying it would be a huge stretch of “doubtful legality” to use section 47 to intervene in a strike.
“To do so would be to send a signal that the South African government does not subscribe to the rule of law and any investor faces having their property seized at any time. The predictable result would be that investment in South African mining, already in crisis, would dry up even further,” he told BusinessLive.
In terms of section 47 of the Mineral & Petroleum Resources Development Act, the mineral rights holder is required to actively conduct mining, while section 47 empowers the minister to suspend or cancel a mining right if the holder fails to fulfil its obligations in terms of the right, among other things.
The National Union of Mineworkers and the Association of Mineworkers & Construction Union started a strike at Driefontein, Kloof and Beatrix in March after failing to agree a new three-year wage agreement. Unions are demanding a R1,150 per month increase for entry-level miners whereas Sibanye-Stillwater has offered R850/month – an position it says is its last.
Wellstead told BusinessLive last week that the fact it was in a labour dispute with unions indicated it wanted to continue mining.
“What we are trying to do is to preserve the sustainability of our operations and preserve jobs. What the unions are demanding is going to result in the early closure of those operations, which will mean early job losses, which will impact on other stakeholders that rely on the operations, like communities and small and medium enterprises, and will impact the national and regional economies as well,” Wellsted said.
“The reason we are holding out is that the industry cannot continue to absorb above-inflation costs.”