Sibanye Gold Limited (Sibanye-Stillwater)
Sibanye Gold Limited (Sibanye-Stillwater)
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Sibanye CEO Neal Froneman is predicting significantly improved second half performance after a strong June qtr (Q2) recovery from a series of operational events that affected March qtr output by South Africa’s No 1 gold producer.
June half (H1) production was 713,900oz, up from 711,900oz in H1 2014. All-in sustaining costs rose to $US1,137/oz (H1 2014: $1,070) primarily due to low Q1 production. Headline earnings fell to $14.3M ($61.2M).
South African gold producers have responded to wage demands of 80% to over 100% by the country’s major unions by offering their lowest-paid workers five-year deal that would give workers increases ranging from 7.8% to 13%.
In their former offer tabled at gold sector wage negotiations, miners AngloGold Ashanti, Evander Gold Mines, Harmony Gold, Sibanye Gold and Village Main Reef have also offered 4.5-6% increases for higher category workers. Although the current round is due to end on Wednesday, the negotiations are forecast to take weeks or months.
The early qtr-on-qtr numbers point to a global decline in gold, copper and iron ore output, and of the big iron ore producers, only BHP has posted a March qtr increase. By SNL Metals & Mining analyst Chris Hinde
Power shortages and a delayed start-up after the festive season have cut South African-focused Sibanye Gold’s Mar 2015 qtr (Q1 2015) gold production 5% to 9,808kgs (315,300oz) from 10,338kgs a year earlier.
Africa's no-3 gold producer says production fell due to agreements to cut power consumption with struggling state-owned power utility Eskom. Sibanye said in Feb it will build $US249M solar-powered power plant to weather electricity shortages.
Gold Fields used the need to develop specialised mining skills for South Africa's first fully mechanised gold mine to justify its agreement to pay average annual 10% wage increases over the next three years.
Sibanye announced plans to build a ZAR3B, 150MW solar power plant by 2017 to reduce its reliance on struggling South African power utility Eskom, which has forced mining companies to cut consumption by up to 20%. The miner is also in the early phases of developing a coal-fired power station with the aim of being completely off the grid.
The company posted headline earnings of $US130.9M for the year to Dec 2014, down from $243.6M a year earlier. Gold production rose to 1.6Moz (2013: 1.4Moz) at all-in sustaining costs of $1,071/oz ($1,148/oz). Reuters
Sibanye Gold has welcomed an outbreak of maturity and commonsense by South Africa's two major mining unions in the aftermath of violence that halted its Beatrix operations for two working days last week.
Sibanye says it’s continuing investigations into the violence between rival members of the Association of Mineworkers and Construction Union and the National Union of Mineworkers that forced it to close its Beatrix North and South shafts in South Africa for two working days.
Beatrix operations resumed on Monday evening after formal agreement with all representative unions, and the unions also agreed to cooperate fully with the investigation.
A running battle between rival members of South Africa’s two major mining unions has forced Sibanye Gold to shut down its Beatrix operations in South Africa.
Sibanye suspended work at its Beatrix mine after nine workers were injured in fighting between rival members of the Association of Mineworkers and Construction Union and National Union of Mineworkers.
The fighting broke out on Thursday afternoon while AMCU officials were meeting management to sign a recognition agreement. "The situation remains tense and management has decided to suspend operations at Beatrix North and South shafts while it attempts to restore calm,” the company said. Reuters