Seeking a return to profitability, South Africa’s No. 2 gold producer, Sibanye Gold, announced it will slash 1,110 positions at its Beatrix West project. Mine operations will cease first, leading to 330 jobs lost along with 780 positions the company will seek to redeploy, according to company officials.
At the outset of the second quarter of 2013, Sibanye first announced potential losses of 3,000 positions in the central Free State province mine. A fire started in mid-Q1 and the company has since lost 62 kg of gold per month related to that development section. Output will be halted until Q3 2014, said James Wellsted, a spokesman for Westonaria-based Sibanye. “There were no commercially viable alternatives to shutting down the section without some sort of job reductions,” Wellsted told the South African Press Agency.
Both Sibanye, a spin-off of Gold Fields, and AngloGold Ashanti Ltd., Africa’s top gold producer, are each mulling the cost of restructuring as labor and power charges increase at rates above inflation in the country with Africa’s biggest economy, and an often-named contender to join the BRIC emerging market club of nations.
In Q2, Sibanye began meeting union representatives over the possible reductions, under the auspices of South Africa’s Labor Relations Act, allowing for remediation with organized labor via a commissioned arbiter.
Such heavy job losses could spark trouble in South Africa’s volatile mining sector, frequently beset by worker unrest, while producers seek to cut costs from falling demands for metals like platinum. The African National Congress, which has ruled the country since the Apartheid’s end in 1994, is pressuring miners to avoid layoffs in the face of elections.