Sibanye Mine Misses Targets, Risking 2,500 South African Jobsby
About 1,700 full-time employeees, 800 contractors affected
Sibanye looks to trim costs to keep Cooke mines sustainable
Sibanye Gold Ltd., the top producer of the metal from South African mines, will start talks with unions that may affect about 2,500 jobs after its Cooke 4 operation failed to meet production goals.
Financial losses at the mine “threaten the viability of the rest of the Cooke operations and we have regrettably had to give notice” and start job-cut consultations, the Westonaria-based producer said in a statement Monday. “We remain positive about the future of the Cooke 1, 2 and 3 mines.”
The company first considered job cuts at the operation in September 2014, months after buying it from Gold One International Ltd. Despite efforts to improve Cooke 4’s performance since then, it has “continued to fall short of production targets,” it said. The operation has about 1,700 full-time employees and 800 contractors, company spokesman James Wellsted said by phone.
Sibanye, a collection of aging but cash-generative mines, has cut costs and increased production by mining more efficiently and buying nearby resources since it was spun out of Gold Fields Ltd. in 2013. This, coupled with a 28 percent increase in the price of the precious metal this year, has helped the producer’s stock more than double in 2016, placing it among the top five shares on Johannesburg’s stock exchange this year.
“With higher gold prices the system relaxes,” but Sibanye needs to make sure the Cooke operations are sustainable, Wellsted said. “We’re trying to make sure our costs don’t run away.”
The National Union of Mineworkers, the biggest representative of employees at Sibanye, will engage with the company over the job losses, it said in a statement. “The NUM will fight tooth and nail to make sure that its members are not retrenched cheaply.”
About 60,000 jobs are at risk in South Africa, where more than one in four of the workforce is unemployed, trade union Solidarity said in April. The mining industry is hardest-hit, with 36 companies cutting about 29,200 positions.