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Miningmx reports that shares in Sibanye-Stillwater are nearly 72% higher since the Association of Mineworkers and Construction Union (Amcu) started its strike at the company’s local gold mines on 25 November.
In addition to discounting the impact of the strike, which amounts to a R20m per day in cash burn at the gold mines, investors also seem sanguine about a delay in Sibanye’s proposed takeover of Lonmin. The reason is the improvement in the palladium price, as well as rhodium, that Sibanye produces in relatively high proportion to platinum at its US-based PGM producer, Stillwater. There is also less concern regarding the chances of a secondary strike, if it is approved by the Labour Court, occurring at Sibanye’s local platinum operations. The popular belief is that the strike has become personal between Neal Froneman, CEO of Sibanye-Stillwater, and Joseph Mathunjwa, president of Amcu. That may be a factor, but cold economics will decide the ultimate outcome of the strike and there’s much less for Froneman to lose than Mathunjwa. Why then is Amcu persisting in circumstances where the strike now seems major folly? The author maintains that Mathunjwa has bet the farm. “To back down now with platinum industry wage negotiations around the corner could end a reputation.”
- Read the full original of David McKay’s interesting report on the above at Miningmx
Get other news reports at the SA Labour News home page