On Thursday, Sibanye-Stillwater said it may retrench over 6 000 jobs at shafts on its Beatrix and Driefontein gold mining operations due to ongoing financial losses in 2018.
It notified stakeholders that it was embarking on the possible restructuring of its gold operations following “numerous initiatives to contain losses… which have thus far proven to be unsuccessful.”
The mining company has been hit by safety incidents in the first half of 2018, and by protest action by the Association of Mineworkers and Construction Union (AMCU) over wage increases in the latter part of last year.
The union has been insisting on a R1 000 wage increase while its fellow trade unions National Union of Mineworkers (Num), Solidarity and the United Association of South Africa (UASA) took a R700 a month increase in the first and second years, and R825 a month in the third year to some categories of employees.
“Sibanye-Stillwater management has consistently highlighted the operational and financial risks associated with the underperformance of these shafts at future forum meetings, which have been held regularly with stakeholders including the unions,” it said.
The company says together with affected stakeholders it will look at measures to avoid and mitigate possible retrenchments and seek alternatives to the potential cessation or down-scaling of operations at the affected shafts.
The company is expecting to announce losses of R1-billion at its results scheduled for next week, it said in a trading statement, also issued on Thursday.
Fellow union Solidarity said the news was unsurprising and called for AMCU to end its strike now.
At the start of the salary negotiations in June 2018, Sibanye had already indicated that an unsatisfactory wage settlement could lead to thousands of job losses, said Gideon du Plessis, General Secretary of Solidarity.
He also criticised Amcu’s handling of the strike.
“AMCU’S competent negotiators were replaced after three months of negotiations by new negotiators who did not even want to consider the sustainability of the gold sector and especially Sibyane, and clearly had ulterior motives,” said du Plessis,
He said if possible retrenchments takes place, it will be AMCU members who will be affected as they work at the shafts which are performing badly.
Due to the lengthy strike, the union has further widened the gap of unemployment, Du Plessis argued.
“If we use the multiplying factor of an average of 10 dependants per mineworker, Amcu has now dumped thousands of people in poverty. Apart from the job losses, a number of people have already been murdered and numerous houses were burnt down, which is directly related to the strike,” Du Plessis added.
The news of possible retrenchments coincided with the release of bleak mining production data, released by Statistics South Africa.
Mining production decreased by 4.8% year-on-year in December 2018, said Stats SA.
This was mainly due to the negative performance of gold, iron ore, copper, chromium ore and ‘other’ metallic minerals.
FNB chief economist Mamello Matikinca-Ngwenya, attributed the low gold production to the AMCU strike at the Sibanye-Stillwater gold operation.
The year ahead would be a bumpy one for the sector she warned.
“We are concerned about the outlook for 2019… as rising input costs, low commodity prices, electrical generation and slowing Chinese growth present material downside risks to the mining sector,” Matikinca-Ngwenya said.
In a statement minister of mineral resource Gwede Mantashe said he will engage with stakeholders at Sibanye to try and find an amicable solution to explore “all possible options to ensure as many jobs as possible are saved during the restructuring”. He called on all stakeholders to negotiate in good faith.
AMCU president Joseph Mathunjwa was not immediately available for comment.