Sibanye Plans 1,110 Job Cuts to Make Beatrix Mine Profitable

May 29 (Bloomberg) -- Sibanye Gold Ltd., South Africa’s second-biggest producer of the metal, will cut 1,110 jobs at its Beatrix West mine in a bid to return the operation to profit.

The company, which scaled back its initial proposal from as many as 3,000 positions, will attempt to redeploy 780 of the workers affected, James Wellsted, a spokesman for Westonaria-based Sibanye, said today by telephone.

The company and larger South African peer AngloGold Ashanti Ltd. are seeking to save funds as gains in labor and power costs outpace inflation. Sibanye’s revised plan would affect less than half the mine’s 2,800 permanent employees and 300 contractors. It may help the operation return to profit after a fire that started in February knocked out about 38 percent of production.

The company is losing 61 kilograms (134 pounds) of gold a month as a result of the blaze, and expects output from the affected area to be suspended until June 2014.

While Beatrix West remains unprofitable, production has increased from the sections that are still working, Wellsted said. “We need to carry this operation for longer if we can get it into a profit-making position.”

Sibanye started talks with unions on potential job cuts in April. Discussions are held with unions and a facilitator appointed by the Commission for Conciliation, Mediation and Arbitration. The process will continue and Sibanye will close Beatrix West if necessary, Wellsted said.

Sibanye rose 0.3 percent to close at 7.47 rand in Johannesburg trading.

To contact the reporter on this story: Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net