Sibanye Stillwater Ltd. said it might cut more than 2,000 jobs at some gold mining operations in South Africa that are struggling to make a profit.
The Johannesburg-based precious metals producer will enter into consultations with labour groups and other stakeholders on the proposed restructuring, which could affect 1,959 employees and 465 contractors at its Beatrix 4 shaft and Kloof 1 plant.
The operations aren’t profitable as they are running out of commercially viable ore, and they face rising costs and lower output levels, Sibanye said in a statement.
“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,” said Richard Stewart, Sibanye’s chief regional officer for Southern Africa.
Sibanye, the largest employer in South Africa’s mining sector, was hit by a workers’ strike over wages for almost three months earlier this year. The company is among producers battling to squeeze profits from some of the world’s deepest and costliest gold mining shafts.
It’s becoming harder to operate the mines profitably due to strikes, higher electricity costs, and challenges extracting ore at depths of as much as 4 kilometres (2.5 miles), said company spokesman James Wellsted.
Sibanye’s remaining three gold mines produce just under 1 million ounces of gold annually. Its Beatrix mine will start winding down operations in 2025. Dreifontein — among the nation’s deepest — is expected to close down in 2030 and Kloof three years later. Sibanye was spun off from Gold Fields Ltd.’s oldest South African mines in 2013.
“That’s the current life of mine on these assets,” Wellsted said by phone. “At one time, these mines will reach the end of their operations.”
The restructuring at Beatrix and Kloof could result in job losses through natural attrition, voluntary separation and skills transfer. “It is anticipated that the consultation process will reduce the number of employees that may potentially be retrenched through the implementation” of these measures, the company said in its statement.