Sibanye Adapts Job Reductions After Postponing Planned Shaft Closure

On February 23, Sibanye Stillwater (SSWJ.J) revealed that it has successfully curtailed the number of job losses resulting from the restructuring of its South African platinum group metal (PGM) operations. This achievement comes after the company decided to defer the closure of one of its mature shafts. The restructuring is a response to the challenging environment faced by South African PGM miners, who generate approximately 70% of the world’s mined platinum output from some of the oldest and deepest mines globally, which are costly. The decision to restructure follows a significant decline in PGM prices.

In a statement, Sibanye reported that approximately 2,000 workers have left the company through voluntary separation, early retirement, and termination. This figure is considerably lower than the initially anticipated 4,095 job cuts announced in October of the previous year when the company commenced the restructuring of its four unprofitable shafts. Additionally, 467 workers were removed from the payroll due to natural attrition since September 2023.

Following consultations with various stakeholders, including labor unions, Sibanye has opted to continue operating the 4 Belt (4B) shaft at Marikana, with the condition that it does not incur net losses every month. The 4B shaft currently employs 1,496 permanent workers and 54 contractors. Two other shafts, Rowland and Siphumelele, which faced operational and geological challenges, have been strategically repositioned to ensure sustainable production levels at a lower cost structure. However, the Simunye shaft, which ceased production in 2023, has been permanently closed.

Sibanye’s foresight into the challenges faced by the industry is reflected in its proactive approach to restructuring, aiming to adapt to the changing market dynamics and improve overall operational efficiency. The company’s decision to defer the closure of a shaft and explore alternatives, in collaboration with labor unions, highlights a commitment to finding solutions that balance economic viability with job retention.

The broader industry trend is evident as peers like Anglo American Platinum and Impala Platinum grapple with declining PGM prices, with plans for job cuts and voluntary separation offerings. Sibanye’s forecast of a 91% fall in annual profit 2023 underscores the industry-wide challenges and the necessity for strategic adjustments to weather the economic headwinds.