JOHANNESBURG (miningweekly.com) – Shortly after adding the Cooke 4 operation to its portfolio, JSE- and NYSE-listed Sibanye Gold is set to restructure the newly acquired operation that has made more financial losses than expected and failed to meet productivity targets.

While Sibanye could not be drawn to put a number to the losses, spokesperson James Wellsted said a Section 189, announced officially on Friday, was aimed at finding positive mitigating solutions to the operations challenges and returning the mine to profitability.

Emerging reports of an estimated 2 500 job cuts were inaccurate, Wellsted assured, pointing out that the operation only had 2 500 employees and the company did not intend mothballing the unit.

Trade union the National Union of Mineworkers general secretary Frans Baleni believed that the ultimate goal of Sibanye was to shutter the operation completely until uranium prices lifted.

“At the moment, [it is more] an issue of finding ways to deal with [the difficulties faced by the mine and affording more productivity and profitability]. We are hoping for positive outcomes,” Wellsted said, indicating that the unit had a volatile past, pointing to its many owners and restructuring efforts.

Sibanye bought the Cooke operations, which included Cooke 1, 2, 3 and 4, last year from Gold One, which had the unit for a year after acquiring it for $70-million from TSX- and JSE-listed First Uranium in August 2012. Sibanye took management control of the operations on the West Rand in March.

The Cooke assets were primarily acquired for the significant gold and uranium mineral resources and reserves associated with the surface tailings material and were deemed “critical” to Sibanye’s West Rand Tailings Retreatment Project.

However, “consistent” losses had led the group to start consultation processes with organised labour and other relevant stakeholders to identify and implement sustainable solutions to “ensure delivery of the required productivity and profitability levels”.

Trade union UASA spokesperson Andre Venter acknowledged the "substantial losses" over an extended period of time and would consult with Sibanye on measures to reduce redundancies.

"As the process is in its early stages, it is as yet unknown how many Uasa members are likely to be affected. Uasa will be pushing for the alternative placement of affected members at other mines in the group, while the possibility of such mitigation will only become clearer once the number of employees that accepted voluntary severance packages becomes known," he said.

“Sibanye entered into a similar process at Beatrix West Section in April 2013 following an underground fire, which threatened the viability of the operation,” Wellsted said.

“Remedial action and restructuring undertaken following the Section 189 consultation process, resulted in a significant improvement in profitability at Beatrix West Section and an extension of its forecast operating life,” he explained.

While Beatrix was a different operation and faced contrasting challenges to that of Cooke 4, the company was hopeful of a similar positive outcome in which less than 100 employees lost their jobs.

Solidarity confirmed the receipt of the Section 189 for Cooke 4 and was currently consulting with the company to assess the impact the restructure would have on the union's members.

The Cooke 1, 2 and 3 mines continued to operate and would not be impacted by the Cooke 4 restructuring.