SIBANYE-Stillwater is to retrench 575 employees, mainly from its Kloof 4 shaft, in an effort to stem losses at its South African gold mining division.
The precious metals miner announced on September 14 that up to 2,389 full time employees and 581 contactors could be affected following a Section 189 notice in terms of the Labour Relations Act.
In addition to the retrenchments, 1,057 employees will transfer to vacant positions elsewhere in Sibanye-Stillwater’s gold mining operations following natural attrition since the start of the restructuring exercise.
A further 550 employees were granted voluntary separation or early retirement packages along with a further 348 employees across the South African gold operations.
Some 176 employees as well as 23 contractors will be retained temporarily while Kloof 4 is decommissioned, the group said.
“While the decision to close or restructure operations is never taken lightly, the closure of Kloof 4 shaft was necessary to curb ongoing financial losses,” said Neal Froneman, CEO of Sibanye-Stillwater in the announcement.
It has been a hairy week for Sibanye-Stillwater. On November 29 (Wednesday) it announced the retrenchment of about 287 employees including 187 contract workers from its US-based platinum group metals mine Stillwater.
“We have taken decisive action to address costs at the US PGM operations, to ensure the sustainability of these long-life operations during a challenging period of lower than anticipated PGM prices,” Froneman said at the time.
The majority of full time employees – 100 in total – will be cut from the Stillwater Mine with the remainder spread between East Boulder Mine, the Columbus Metallurgical Complex and Columbus offices as well as remote locations, the group said.
Unlike PGM prices, which are languishing, the gold price in rand terms is soaring. At R2.054m per kilogram, it is only just below the all-time high price of R2.07m/kg recorded in August, 2020. However, Kloof mine is decades old with economic reserves mined out.
There is likely to be more retrenchment pain to come for Sibanye-Stillwater. On October 25, it would look to restructure its South African PGM operations in a move that would affect must over 4,000 jobs. While much fewer retrenchments are likely to occur than identified in the restructuring notice, the move shows the extent to which lower PGM prices are hurting industry margins.
In August, Sibanye-Stillwater reported a decline in interim share earnings and headline share earnings of 38% and 51% to 262 and 208 South African cents respectively amid cuts in PGM and gold production guidances for the year.
On November 21, the company shored up its balance sheet with the issue of $500m in convertible bonds which it will use to finance the recently announced $155m acquisition of recycling operations in the US.