DOWNLOAD THE MINING EXECUTIVE APP NOW
"Global Mining Descisions in Your Palms"
Johannesburg: Sibanye-Stillwater has entered into consultation with relevant stakeholders as it mulls restructuring of its Marikana operation and associated services (the “Marikana operation” (previously “Lonmin”)). The company has been experiencing financial losses at these operations with certain shafts having reached the end of their economic reserve lives. The restructuring will result in the rationalisation of overheads and the realisation of other synergies and efficiencies required to restore profitability and ensure the sustainability of the remaining shafts at the Marikana operations.
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 at the affected shafts and associated services. The S189 process follows a detailed three month review of the Marikana operation, post the Lonmin acquisition becoming effective in June 2019. The review and planning process included the simulation of alternative scenarios to minimize job losses.
Subject to the completion of the S189 consultation, Sibanye Stillwater has already deemed certain actions necessary in order to ensure the sustainability of its operations. These include reducing and optimising the operational footprint including, inter-alia, the cessation of operations at the East 1 (E1), West 1 (W1) and Hossy shafts and the open-cast operations. These shafts and operations are loss making and have reached the end of their economic reserve lives.
Pending the outcome of the S189 process, the company has proposed these shafts be initially be placed on care and maintenance followed by amelioration of the associated cost at some of the Marikana shafts which have previously been placed on care and maintenance. Optimisation of downstream concentrators, smelter and refineries, including closure of the Eastern Platinum C-stream (EPC) and Rowland concentrator plants will have to be undertaken and rightsizing of the related support services and overhead structures associated with the aforementioned shafts
Application of the Sibanye-Stillwater operating model to all mining and metallurgical processing units at the Marikana operation and the extension of existing Sibanye-Stillwater services is expected in order to improve efficiencies and achieve cost savings necessary for sustainability. Approximately 5,270 jobs (~3,904 employees and ~1,366 contractors) are expected to be lost due to the restructuring. As a result of an improved PGM commodity price environment the amount of job reductions.
is significantly less than previously communicated by Lonmin in 2017, with inter-alia, a plan to access sustainable reserves with enhanced crew efficiencies at the 4Belt (4B) shaft complex, which was scheduled for closure, retaining approximately 2,700 employees and contractors. Between 2017 and September 2019 the workforce at Lonmin reduced by approximately 5,944 employees (including contractors), from 32,512 to 26,568. The six month moratorium on forced retrenchments imposed by the Competition commission Appeal Court will lapse on 7 December 2019.
Neal Froneman, Chief Executive Officer of Sibanye-Stillwater, commented: “The proposed restructuring is contemplated to ensure the sustainability of the Marikana operation, which is not a going concern as an independent entity. Whilst the review process concluded that certain shafts, most of which were at the end of their operating lives, would be affected, other shafts which had previously been at risk such as 4B shaft, K3 mining into Siphumelele ground, Roland mining into MK2 ground as well as K4 concentrator, will continue to operate, thereby lessening potential job losses. Overall, the outcome will be a more sustainable business which is able to secure employment for the majority of the Marikana workforce for a much longer period“.
Since listing in 2013, Sibanye-Stillwater has, through steady growth, expanded its role in the South African mining industry. The Group currently employs over 88,000 people in South Africa, compared with 37,700 employees six years ago, and is one of the largest employers in the South African mining industry.”
ABOUT SIBANYE-STILLWATER
Sibanye-Stillwater is a leading international precious metals mining company, with a diverse portfolio of platinum group metal (PGM) operations in the United States and Southern Africa, gold operations and projects in South Africa, and copper, gold and PGM exploration properties in North and South America. It is the world’s largest primary producer of platinum, the second largest primary producer of palladium and a top tier gold producer, ranking third globally, on a gold-equivalent basis, as well as a significant producer of rhodium and other PGMs and associated minerals such as chrome. We are also the globally leading recycler and processor of spent PGM catalytic converter materials