Sibanye Leads Gold Stock Sell-Off: Johannesburg Mover

Sibanye Gold Ltd. led losses among South African gold producers as work stoppages at the country’s platinum mines stoked investor concern that renewed labor unrest will curb output.

The stock fell to a record low, the worst performer on the 166-member FTSE/JSE Africa All-Share Index, which today rose 1 percent to a record. Harmony Gold Mining Co., Africa’s third-largest producer, extended its decline as the biggest loser on the gauge this year. AngloGold Ashanti Ltd., the world’s third-biggest gold miner, slid to its lowest since April 18.

Mineworkers on May 14 began a strike that shut Lonmin Plc’s Marikana platinum mine, where about 34 workers were killed in an Aug. 16 clash with police, igniting concern the unrest will spread. Strain is also being placed on South Africa’s power system as Eskom Holdings SOC Ltd., which generates about 95 percent of the nation’s electricity, deferred upkeep on some aging plants to the current winter months.

“The industry in South Africa is enduring something of a perfect storm,” Ryan Wibberley, a Cape Town-based trader at Investec Asset Management, said in an e-mailed response. Lower metal prices, looming wage negotiations in the mining industry and government “meddling” with Anglo American Platinum Ltd.’s plans to close shafts and cut jobs are also weighing on sentiment, he said.

Revising Cuts

Amplats, as the Anglo American Plc unit is known, last week said it was revising a proposal to cut as many as 14,000 jobs at its South African operations, reducing the number to 6,000 after the government intervened. The National Union of Mineworkers will demand pay increases of more than 10 percent when negotiating with the Chamber of Mines, the labor union’s secretary-general, Frans Baleni, said April 28. Talks are due to begin next month, the Johannesburg-based chamber said May 8.

Sibanye, which runs Africa’s largest gold operation, fell 7.8 percent to 7.45 rand in Johannesburg, the lowest since it started trading on Feb. 12 after being spun out of Gold Fields Ltd. About 6.3 million shares traded, 76 percent of the three-month daily average.

Harmony declined 1.7 percent to 38.34 rand, its worst level since May 2005, and extending its losses this year to 48 percent, with share volumes reaching 1.3 times the three-month daily average. AngloGold, the third-worst performer on the all-share index after Impala Platinum Holdings Ltd., decreased 0.4 percent to 164.50 rand.

The spot price of gold dropped 0.3 percent to $1,388.30 by 6:06 p.m. in Johannesburg, extending its losses for a sixth day.