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Sibanye lowers job losses in South African gold operations restructure


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Sibanye lowers job losses in South African gold operations restructure

Sibanye Gold Ltd. said June 5 that about 3,450 jobs will be affected by the proposed restructuring of loss-making operations at some shafts at its Beatrix and Driefontein Consolidated mines in South Africa.

The company concluded a section 189 process with relevant stakeholders, including unions, in which it was agreed that 2,650 jobs intended for retrenchment would be retained and it would keep open the Driefontein 8 shaft, one of the operations identified for closure. The agreement stipulates that the shaft will remain open as long as it makes a profit, on average, over any continuous period of three months. The shaft employs over 970 workers and 55 contractors.

No such solution could be found for the other operations. Beatrix shaft 1 and Driefontein 2, 6 and 7 will be placed on care and maintenance, while Driefontein 6 and 7 shafts and the Beatrix 2 plant will be closed, the company said.

The company had estimated in February that over 5,000 jobs could be lost, excluding contractors.

The company reported that the buildup to normalized production at the South Africa gold operations, following the conclusion of a five-month strike by Association of Mineworkers and Construction Union, was proceeding steadily.

Sibanye CEO Neal Froneman said the company had come through a difficult period but it is now strategically positioned for the platinum wage negotiations and the integration of Lonmin PLC.

Sibanye expects the gold division to return to pre-strike production levels during the third quarter.

Second-half production is forecast at between 514,000 and 546,000 ounces, which Sibanye said was closer to the forecast production levels before the strike. Full-year production from the gold operations, excluding DRDGold, is forecast at between 772,000 and 804,000 ounces. All-in sustaining costs of between US$1,350 per ounce and US$1,450/oz are expected in the second half, compared to the US$1,260/oz to US$1,330/oz expected had there not been a strike.

For the full year, all-in sustaining cost is expected to remain elevated, on average, at between US$1,640/oz and US$1,725/oz due to higher costs as a result of the strike.

Capital expenditure for the full year is forecast at about 2.35 billion South African rand, or roughly US$173 million.

About 1.9 billion rand of the capex has been scheduled for the second half.