Sibanye Gold Ltd. faces a potentially crippling strike at its gold operations in South Africa that could have an impact on the miner's gold production after the Association of Mineworkers & Construction Union, or AMCU, gave notice that its members planned to walk off the job starting Nov. 21.

The union is one of the core labor groups at Sibanye's gold mines in South Africa, representing 43% of its bargaining unit workers, the company said. In all, Sibanye employs 32,200 people at its South African gold mining operations.

For months, Sibanye has been in negotiations with several unions over wages and other labor issues and recently reached agreements with other unions that included pay hikes. But the AMCU has held out and now expects its members to strike beginning with the Nov. 21 evening shift.

"AMCU IS GOING ON STRIKE!" the union said in a Nov. 18 tweet.

Sibanye confirmed that it had received a strike notice from the AMCU in a Nov. 19 release.

Production cuts?

It remains unclear how much the strike will affect Sibanye's gold operations, assuming the labor action goes ahead as planned. The union has a history of strike actions and in the past has been willing to picket for months. Back in 2014, it participated in a platinum sector strike that lasted around five months.

James Wellsted, Sibanye's head of investor relations, said it hadn't faced a comparable situation at its gold operations, but that contingency plans were in place.

"We do have strike plans intended to minimize the production and financial impact by reducing costs as much as we can," Wellsted said.

The impact of a strike may vary at each of Sibanye's gold mines depending on the level of AMCU representation. Wellsted said AMCU membership was 67% at Driefontein Consolidated but 33% at Kloof Consolidated, two of Sibanye's main gold mines in South Africa.

He also said union tactics could be a factor in Sibanye's ability to run operations smoothly.

"We could arguably continue producing," Wellsted said. "The problem is you're never sure exactly what levels of intimidation there may be and we'll certainly try to prevent anything like that. But it's very difficult to say upfront. We all have to wait and see."

Across its gold mines in South Africa, Sibanye produced 308,922 ounces gold in the third quarter, down from 372,176 ounces gold in the same period a year earlier. Meanwhile, citing safety issues, it slashed gold guidance for the year to between 1.13 million and 1.16 million ounces.

Support?

The pending strike comes as the Christmas holiday approaches. Wellsted raised the possibility that some workers could switch union allegiance rather than forgo pay.

"Normally there's not a huge appetite to strike and to not get paid three or four weeks before you go home to your family," he said.

The AMCU could not immediately be reached for comment. It expressed commitment to the strike in a series of tweets Nov. 19.

"We are striking here at Sibanye Stillwater. We need to come out and [picket] in our vast numbers," AMCU quoted its national organizer Dumisani Nkalitshana as saying.

Meanwhile, Sibanye CEO Neal Froneman drew a line in the sand over the agreement it has made with other unions.

"We will honor this agreement and have made a commitment that we will not increase the offer," he said in Sibanye's release.