Sibanye Gold Ltd. (SGL), South Africa’s second-biggest producer of the metal, will cuts 1,110 positions at its Beatrix West mine in South Africa, fewer than first proposed, in a bid to return the operation to profit.
The company will stop development at the mine, resulting in 330 job cuts and an additional reduction of 780 positions that it will attempt to redeploy, James Wellsted, a spokesman for Westonaria-based Sibanye, said by phone today.
Sibanye on April 2 said it may trim as many as 3,000 positions at the mine in the central Free State province. A fire at the operation started on Feb. 19 and the company is losing 61 kilograms (134 pounds) of gold every month as a result. Output will be halted until June 2014, Sibanye said. The company and AngloGold Ashanti Ltd. (ANG), the continent’s biggest producer, are reviewing costs as labor and power charges increase at above-inflation rates.
“Production has actually improved from the sections that are still mining,” though still making losses, Wellsted said. “We need to carry this operation for longer if we can get it into a profit-making position.”
Sibanye in April started talks with unions on potential job cuts, using procedures outlined in section 189 of the country’s Labor Relations Act. Through this, discussions are held with unions and a facilitator appointed by the Commission for Conciliation, Mediation and Arbitration.
The section 189 process will remain in place and Sibanye will close the Beatrix West section of the mine if necessary, Wellsted said. “We believe that it will be profitable.”
The shares rose 1.6 percent to 7.57 rand at 10:22 a.m. in Johannesburg, paring the drop since they started trading in February to 49 percent.
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