Sibanye Gold expects 5,270 job cuts with closing of South Africa mine shafts

Sibanye Gold Ltd. said it expects about 5,270 job losses as it enters talks over restructuring at the Marikana operations it acquired with the purchase of Lonmin earlier this year.

“The proposed restructuring is contemplated to ensure the sustainability of the Marikana operation, which is not a going concern as an independent entity,” Chief Executive Officer Neal Froneman said in a statement on Wednesday.

Key Insights

  • While the job losses are smaller than originally envisaged by Lonmin, the announcement will further strain relations with labor unions as Sibanye faces deadlock in negotiations for a three-year wage deal. That also comes on top of 5,944 job losses at Lonmin between 2017 and September this year.
  • Sibanye posted a 1.1 billion rand gain on the Lonmin deal, which made the company the world’s biggest platinum miner, but some of the older shafts at Marikana are unprofitable. The company plans to close three of them.
  • The restructuring will help determine whether Froneman can resume dividend payments next year, after a five-month strike at the company’s gold mines contributed to a first-half loss.

Market Reaction

  • Sibanye shares gained 5.3% in Johannesburg trading.
Published by
Bloomberg News
Country: South Africa

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