Another 4,000 jobs on the line in South Africa

 ·11 Apr 2024

Sibanye-Stillwater is looking to cut another 4,000 jobs in South Africa.

The group said that it is engaging with stakeholders to enter into consultations over the group’s restructuring in terms of Section 189A of the Labour Relations Act with organised labour and representatives of non-unionised employees.

It plans to restructure its gold operations and its Southern Africa (SA) region services functions.

The group said that its business review had identified a need to address losses at the Beatrix 1 shaft, which has not been able to deliver planned production, and the Kloof 2 plant, which, after the closure of the Kloof 4 shaft in 2023, has had insufficient processing material available to cover overheads.

The deferral of capital expenditures at the Burnstone project, announced in February 2024, also needs restructuring to align with the reduction in planned capital activities.

“The reduction in the operational footprint in the SA region, due to the recent restructuring and closure of loss-making shafts and from proposed future restructuring or closures, has resulted in the capacity of the direct and shared services functions for the SA region and operations being surplus to current and future requirements,” said the group.

“As a result, the Company proposes a re-alignment of the regional services, shared services and direct services structures to align with the requirements of the reduced operational footprint.”

“This will reduce direct operational services costs and regional overhead costs which are allocated to the operations, thereby contributing to the sustainability of the SA region.”

The proposed restructuring could affect 3,108 employees and 915 contractors.

“The objective of the consultation process is to, among others, consider alternative measures to minimise job losses while ensuring the long-term sustainability of the SA operations,” said the group.

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

“All reasonable options that may be suggested by affected employees through their representatives to address the losses during the Section 189A consultation process will be welcomed and duly considered.”

Another blow

In February, the group announced that 2,600 employees were let go to address its loss-making operations and ensure the sustainability of its SA PGM operations.

Sibanye recently recorded an R37.9 billion loss after taking an impairment against its US palladium mine.

The share price has also dropped from over R70 two years ago to just around R25 today.

Sibanye Stillwater Share Price

Despite this, CEO Neal Froneman was largely unaffected by the serious drop in the group’s share price after exercising a put option.

A put option is a contract that gives the option buyer the right, to sell a specified number of shares at a predetermined price within a stipulated time frame. 

The predetermined price at which the put option buyer can sell the underlying security is called the strike price. 

In early March, Froneman exercised his put option at a strike price of R66.24 while the share price was under R20, pocketing him R96.38 million.

Read: The 4.5-day workweek for South Africa

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