Sibanye Stillwater has started retrenchment talks at its Marikana operation which could see over 5,000 people lose their jobs.
The restructuring plans come after Sibanye acquired loss-making Marikana platinum mine as part of its takeover of Lonmin. If the miner had not taken control of Lonmin, more than 20,000 jobs would have been lost.
The restructuring plans will see 6 percent of its workforce affected, an equivalent to 5,270 jobs and out of these jobs, 3,904 are permanent positions, while 1,366 are contractual.
On Wednesday 25 September, the miner informed unions of its intention to cut jobs at the Marikana unit.
“The proposed restructuring is contemplated to ensure the sustainability of the Marikana operation, which is not a going concern as an independent entity. Overall, the outcome will be a more sustainable business which is able to secure employment for the majority of the Marikana workforce for a much longer period,” Neal John Froneman the CEO said in a statement.
A strike that lasted five months affected Sibanye’s gold operations in South Africa. The company posted a headline loss of more than ZAR 1.2 Bn in the six months to the end of June compared to a profit of ZAR 101 Mn in the same period last year.
The company’s earnings were also affected by retrenchment costs which totaled ZAR 397 Mn.
The strike came to an end after the company reached an agreement with the Association of Mineworkers and Construction Union (AMCU).
“The restructuring will result in the rationalisation of overheads and the realisation of other synergies and efficiencies required to restore profitability and ensure the sustainability of the remaining shafts at the Marikana operations,” the statement said.
The miner has more than 88, 000 employees according to a report by SENS.
The reports of laying off workers come at a critical time as South Africa’s unemployment rate hit an 11-year high of 29 percent in Q2, with mining suffering the biggest decline having lost 54,000 positions.
Featured Image Courtesy: Mining Technology