JSE-listed Sibanye-Stillwater will enter into consultations with organised labour and other affected stakeholders, in terms of Section 189A of the Labour Relations Act, regarding the possible restructuring of its South African gold operations pursuant to ongoing losses experienced at the Beatrix 4 shaft and the impact of depleting mineral reserves to the Kloof 1 plant.

Through a formal Section 189 consultation process, the company and affected stakeholders will together consider measures to avoid and mitigate possible retrenchments and seek alternatives to the potential cessation or downscaling of operations and associated services, Sibanye says.

The proposed restructuring could potentially affect employees at Beatrix 4 shaft, those employees who provide support services to the shaft, and Kloof 1 and 2 plants.

In addition, employees may be affected in associated companies, including Sibanye Gold Protection Services and Sibanye Gold Academy.

Subject to the outcome of the consultation process, it is envisaged that the proposed restructuring of both Beatrix 4 shaft and Kloof 1 plant may result in the retrenchment of up to 1 959 employees and affect 465 contractors.

However, Sibanye says that the purpose of the consultation process is to engage in a meaningful joint consensus-seeking process in an attempt to avoid job losses.

It is anticipated that the consultation process will reduce the number of employees that may potentially be retrenched through the implementation of, among other things, possible retrenchment avoidance measures, including natural attrition, retirement, voluntary separation packages and the transfer of suitably skilled employees to vacant positions elsewhere in the company.

The initiation of consultations follows numerous unsuccessful attempts to address productivity and other operational issues at the Beatrix 4 shaft and the depletion of surface rock dump (SRD) mineral reserves available to Kloof 1 plant, Sibanye indicates.

The life of the Beatrix 4 shaft was previously prolonged, following Section 189 consultations in 2017, which, through the successful adoption of productivity enhancement and cost containment measures implemented following consultation with stakeholders, enabled it to remain in operation as long as it made a profit, on average, over any continuous period of three months (after accounting for all-in sustaining costs), the company outlines.

Further, the SRD mineral reserves that are treated at Kloof 1 plant are nearly depleted and the Kloof Main SRD will be completely mined out by December.

As a result, Kloof 1 plant will not be able to operate at full capacity, with its only remaining primary source of ore coming from Kloof 4 SRD. Cost reduction efforts have been ineffective in addressing the ongoing lack of profitability, Sibanye explains.

It says ongoing engagement with stakeholders through regular future forum meetings to address the plight of Beatrix 4 shaft and Kloof 1 plant have been unsuccessful.

“It has become increasingly evident that, due to increasing costs and an inability to achieve targeted productivity levels, it will be difficult to secure the profitability levels required for the sustainability of the mine and plant,” the company notes.

“To allow shafts and operating plants that are no longer sustainable to continue operating at a loss, will threaten the remaining life-of-mine of the other South African gold operations, and ultimately also the employees of the broader group.

“We are committed to minimising the impact of the proposed restructuring and will constructively engage with all relevant stakeholders in an effort to avoid job losses, while attempting to limit the impact on the remainder of the operations employees and the sustainability of the group,” says Sibanye Southern Africa chief regional officer Richard Stewart. 

Commenting on the news, union Solidarity says this development means that the affected employees face a "black Christmas with the uncertainty of whether they will still have a job in 2023". 
 
“However, Sibanye has shown with the previous 189-consultations regarding their Beatrix shafts and after the takeover of the Marikana mines from Lonmin, that they are investigating all alternatives to minimise the number of affected employees, and Solidarity believes that this will once again be the case,” says Solidarity general secretary Gideon du Plessis. 
 
Solidarity says it will actively participate in the consultation process with the hope of preventing retrenchments, but otherwise keeping it to a minimum.
 
The 189-process will be facilitated by the Commission for Conciliation, Mediation and Arbitration and a date for the first round of the consultation process has yet to be confirmed.