Today's Labour News

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Sibanye StillwaterAccording to Johann Steyn, an analyst at Citi, the Department of Mineral Resources (DMR) could intervene at Sibanye-Stillwater, ordering it to change the mining method at its gold mining operations.  

Such a development would imperil the viability of millions of ounces of gold.  Steyn’s contention is that Sibanye-Stillwater, when it was just Sibanye, undertook a strategy of short-term gains at the gold mines it ‘bought’ in the demerger of Gold Fields’ SA mines.  In his view, the spate of fatalities this year – totalling 21 lives – was a function of having cut out management layers, high-grading the pillars which Gold Fields had considered too dangerous to mine, and cutting capital and other operating expenses in order to lift profits just after the demerger in 2013.  

But, company spokesman James Wellsted disagreed, saying:  “We do not agree with the comments made by the Citi analyst, which we believe are speculative and are not supported by adequate evidence.”  Wellsted pointed out that management reductions when it first assumed control of the Gold Fields assets had been among shared services rather than underground.  There had also been a decline in fatalities after the demerger.  

But, in Steyn’s view, there was “… a real risk that the DMR could intervene which may have a negative impact on profits at a time when its (the company’s) balance sheet is already strained”.  In 2011, the DMR intervened at the Everest and Platinum Mile mines following fatalities, ordering a change in the mining method.  “This was the beginning of the end for these operations which were subsequently mothballed,” Steyn stated.

Read this report by David McKay in full at Miningmx

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