The Sunday Independent writes that Sibanye-Stillwater’s South African gold operations, battered by a five-month strike by Association of Mineworkers and Construction Union (Amcu) members, might have to lay off nearly 7,000 workers in a restructuring.
Sibanye senior vice-president of investor relations James Wellsted said this week that a three-month process for the start of negotiations with trade unions about the proposed restructuring of the gold operations had begun.
Potentially, 5800 employees and 800 contract workers might be laid off.
“We need the co-operation of all stakeholders on this one,” he said.
He said an agreement reached with unions at Beatrix gold mine’s No4 Shaft in 2013 had minimised job losses and kept the shaft operational.
Wellsted said the restructuring had been necessitated by factors that affected the mining industry’s cost structures, including high electricity tariff increases, blackouts, strike action and above-inflation wage increases.
The rise in platinum group metals prices had been not enough to offset the cost increases and companies such as Impala Platinum were in restructuring negotiations that might involve the lay-off of 13000 employees, while Lonmin (which was merging with Sibanye) was no longer able to finance the development of new projects.
The five-month strike by Amcu at Sibanye-stillwater’s South African gold operations, which had left nine people dead, ended on Wednesday.
About 14000 Amcu members at Sibanye’s Driefontein, Kloof and Beatrix mines had demanded R1000 wage increments for the next three years, while the National Union of Mineworkers, Solidarity and the United Association of SA had accepted a raise of R750 a year for three years from July 1, 2018 to June 30, 2021.
Amcu ultimately agreed to the same deal as the three other unions, as well as a R4000 cash or voucher payment and an optional R5000 soft loan to employees, to be repaid over a year.
The union had also agreed to developing a plan to ensure a safe start and ramp-up of production post-strike.
Amcu president Joseph Mathunjwa said capitalism was brutal and the mineworkers could one day tell their children with pride that they had contributed towards a revolution by giving five months’ salary towards removing the legacy of exploitation.
Mathunjwa said the agreement had set up a good platform for negotiations on the restructuring and prevention of job losses.
Earnings before interest, tax, depreciation and amortisation (Ebitda) at Sibanye’s gold operations fell by 75percent to R1.36billion last year, partly because of the strike in the second half, with gold mining contributing only 16percent to group Ebitda, against half the year before.
The restructuring plan follows long-declining production in the mining industry. Statistics SA data this week showed that mining production slid in February to -7.5% year-on-year, from -3.3% a year ago.
Gold production volumes had been depressed for 16 months.
Momentum Investments economic analyst Roberta Noise said the end of the strike might lift gold mining production in the short term, as would the fact that the latest iteration of the Mining Charter was “receiving some good reviews”, but there was still an operational risk of an inadequate electricity supply.
The original of this report by Edward West appeared on page 18 of The Sunday Independent of 21 April 2019
Get other news reports at the SA Labour News home page