South Africa’s largest employer of mineworkers, Sibanye-Stillwater, announced that it would enter into Section 189 consultations to retrench over 4,000 workers amid the company’s restructuring.

Sibanye CEO Neal Froneman previously warned the company may be forced to close unprofitable shafts and cut jobs as prices of Platinum Group Metals (PGMs) continue to plummet. 

Froneman said job cuts in platinum mining are unavoidable as prices continue to fall, requiring “significant restructuring” of the sector. 

“We certainly can’t run unprofitable shafts, and our cost structure is probably the lowest in the industry. So if we have loss-making shafts, of which we have a few, they will have to be closed, and I say this with all the sensitivities on potential job losses,” said Froneman. 

Today, the company said that above-inflation increases in key cost components such as electricity, water, wages, and fuel, combined with the recent decline in PGM prices, have significantly impacted the global PGM industry’s profitability, including Sibanye-Stillwater’s South African operations. 

Certain operating shafts are now loss-making and pose a risk to the sustainability of the remaining operations.

Therefore, the company will enter into discussions with organised labour and other affected non-unionised employees through their representatives regarding the possible restructuring of four shafts at its Southern Africa PGM operations. 

Mining operations at the Simunye shaft, Kroondal operation, ceased during Q4 2022.

Employees who have not yet been deployed to other shafts and are impacted by the final closure will be consulted in terms of the section 189 process.

Operations at the 4 Belt shaft, Marikana operation, which already faced closure during the restructuring of the Marikana operation in H2 2019, continued operating for the last four years. 

However, it has now depleted its economically extractable reserves and reached the end of its life. 

The closure of the 4B shaft will be subject to consultations with organised labour representatives and affected non-unionised employees, the company said.

The Rowland shaft, Marikana operation, has not delivered as planned for an extended period due to various operational constraints and has achieved only 64% of planned production year-to-date.

Remedial actions have failed to address this underperformance, the company said. 

As an alternative to closure, Sibanye’s management proposes a rightsizing of operations that will require a reduction in the employee complement to secure the longer-term viability of the shaft.

The Siphumelele shaft, Rustenburg operation, experienced significant seismic activity during 2022, which, for safety reasons, restricted access to certain planned production areas.

As an alternative to closure, workforce rightsizing is needed to support the current reduced average annual production forecast.

Employees who have not yet been deployed to other shafts and are impacted by the final restructuring will be consulted in terms of the S189 process.

The proposed restructuring and shaft closures could potentially affect 4,095 employees and contractors – 3,500 employees and 595 contractors – including support services employees.

“We do not underestimate the potential impact of any form of restructuring and commit to constructively engaging with affected employees through their representatives in an effort to minimise job losses”, said Africa Chief Regional Officer Richard Stewart. 

“Unfortunately, it is imperative that we engage in this process to ensure the sustainability of our Southern Africa PGM operations and the benefits and value they bring to multiple stakeholders.”

“Various alternatives have already been considered by management and organised labour representatives in Future Forum meetings,” the company said.

Industry-wide retrenchments

Sibanye’s announcement follows the initiation of retrenchment processes at some of the country’s largest miners, including Anglo American and Glencore. 

Anglo American has begun cutting jobs at its head office in South Africa, following reports of other mining giants issuing retrenchment notices as Transnet’s deteriorating performance weighs on their operations.

The focus will be on corporate positions after the company split its business into two regional divisions earlier this year, one covering the Americas and Africa and the other Australia.

The National Union of Mineworkers (NUM) said that 181 notices were sent to Anglo American’s Kumba Iron Ore unit staff warning they could lose their jobs.

An Anglo American spokesman confirmed that the notices had been sent out in South Africa, stressing that it is a global process.

Anglo American’s job cuts follow those of fellow global mining giant Glencore, which launched a retrenchment process last month at one of its coal operations due to an inability to transport coal for export and declining coal prices.

Glencore began a retrenchment process at its iMpunzi coal complex in Mpumalanga, which has 1,138 permanent employees.