JOHANNESBURG (miningweekly.com) – JSE- and NYSE-listed Sibanye Gold has embarked on a Section 189A consultation process with organised labour and relevant stakeholders as its Cooke 4 operation continues to fall short of production targets and amid mounting financial losses.

The gold miner, which bought the Cooke underground and surface assets in 2014, said on Monday that, despite collaborative efforts over the last 17 months, the company had not been able to pull the operation out of the red and back to sustainability.

“Ongoing financial losses threaten the viability of the rest of the Cooke operations and we have regrettably had to give notice to affected stakeholders and begin the consultation process,” said Sibanye gold division CEO Wayne Robinson.

The National Union of Mineworkers (NUM) on Monday voiced its concern, stating that some 1 702 jobs were at risk, and called on Mineral Resources Minister Mosebenzi Zwane to intervene.

NUM said it would engage Sibanye to avoid retrenchments and ensure its members were not retrenched “cheaply”.

This was the second Section 189 consultation process for the Cooke 4 underground mine and Ezulwini gold and uranium processing plant in as many years.

After adding the Cooke 4 operation to its portfolio, from November 2014, Sibanye moved to restructure operations to reverse historical underperformance, with the stakeholders agreeing to implement specific measures to return the operation to profitability and minimise job losses.

Sibanye had instituted an alternative work cycle at Cooke 4, saving over 200 jobs, while voluntary separation packages and voluntary early retirement cut the employee complement at Cooke 4 by 392, and staff at the Ezulwini plant was reduced by 38, with no forced retrenchments.

Management structures were rationalised, while vacancies were filled at other group operations and contractors displaced where possible by Cooke 4 workers.

“[However,] in view of the sustained losses at the Cooke 4 operation and considering the extensive efforts to improve productivity and reduce the operation’s cost structures, Sibanye has given notice in terms of Section 189A,” Robinson said.

All options and alternatives to closure would now be considered during the Commission for Conciliation, Mediation and Arbitration-facilitated 60-day period of consultation with trade unions and affected employees.