Looming strike adds to Sibanye-Stillwater’s woes

Sibanye-Stillwater is bracing for a strike in its gold operations that will affect 43% of the workforce in its bargaining unit, after the Association of Mineworkers & Construction Union (AMCU) gave the company a 48-hour notice that it would down tools from Wednesday evening.

AMCU said in a statement on Monday that the strike would affect all Sibanye's gold operations including Driefontein, Kloof, Beatrix shafts, Health Services, Property Services, South African Region and Corporate Office, Sibanye Protection Services Ltd, Sibanye Gold Academy, Sibanye Shared Services, Cooke 1, 2 and 3 (Rand Uranium) and Burnstone.

The mining union, according to its Twitter feed, held a mass rally on Sunday at the Driefontein mine near Carletonville, west of Johannesburg, where members decided to give Sibanye-Stillwater 48 hours to come back with a better offer or face industrial action.

The union was granted a strike certificate after talks deadlocked in September. Sibanye-Stillwater reached a three-year wage agreement on November 14 with three other unions, who comprise the majority of the workforce; the National Union of Mineworkers (the NUM), Solidarity and UASA. According to the deal, the salaries for most underground and surface employees will be raised by R700 in the first two years and by R825 in the third.

AMCU wants a R1 000 increase.

The company said on Monday the increase offered was in "excess of inflation", which came in at 4.9% in September.

"The agreement we reached with the other unions is fair and final, and considers the current challenges facing our gold operations. We will honour this agreement and have made a commitment that we will not increase the offer," Sibanye-Stillwater CEO Neal Froneman said.

An AMCU spokesperson told Fin24 on Monday that the union would comment about the pending strike at a press conference on Wednesday.

'Very unfortunate and irresponsible'

Froneman warned that the no-work, no-pay principle would apply and the timing of the strike would be difficult due to the upcoming festive season.

"The fact that AMCU national leadership is willing to take its members out on strike ahead of the December holiday period is very unfortunate and irresponsible, given the financial consequences a strike will have on our employees and their families," Froneman said.

Difficult year

The precious metals giant has faced a difficult year, with more than 20 fatalities at its operations. The company's third quarter operational update showed adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 40% to R1.6bn from R2.7bn a year earlier, partly due to work stoppages amidst safety concerns in the first half of the year. 

The planned buyout of platinum group metals firm Lonmin has also hit regulatory hurdles, with AMCU asking the Competition Tribunal not to give Sibanye-Stillwater the go-ahead for the acquisition, with more than 10 000 jobs on the line.

The Competition Commission recommended the merger be given the green light, on condition that Sibanye tries to save about 3 700 jobs if prices improve and the company can maintain production costs at some shafts, and Froneman promised to consult shareholders about this.

The Competition Tribunal is yet to make a ruling.

Sibanye-Stillwater’s share price on the JSE was up 0.43% to R9.28, on Monday at 14:11.

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