Dual-listed Sibanye-Stillwater will enter into consultations with organised labour and other affected non-unionised employees through their representatives regarding the possible restructuring of four shafts within its Southern Africa platinum group metal (PGM) business.

The proposed restructuring and shaft closures could potentially affect 4 095 employees and contractors (3 500 employees and 595 contractors), including support services employees.

Two of the shafts are mature, with one having ceased production in 2022 and the other at the end of its operating life, owing to the depletion of available economic ore reserves, while the other two shafts require restructuring to achieve sustainable production, Sibanye informs.

It avers that above-inflation increases in key cost components such as electricity and water tariffs, wages, fuel and other consumables costs over several years, combined with the recent decline in PGM prices during the year to date have considerably impacted on the profitability of the global PGM industry, including the company’s PGM operations.

Certain operating shafts are now lossmaking and pose a risk to the sustainability of the remaining operations, Sibanye states.

CEO Neal Froneman earlier this month told newswire Reuters that the PGM industry may suffer job losses as a result of the low PGM price environment.

Mining operations at the Simunye shaft, Kroondal operation, ceased during the fourth quarter of 2022, as planned. Employees who have not yet been deployed to other shafts and are impacted by the final closure will be consulted in terms of the Section 189 process.

Operations at the 4 Belt (4B) shaft, Marikana operation, which already faced closure during the restructuring of the Marikana operation in the second half of 2019, continued operating for the last four years, but has now depleted its economically extractable reserves and reached the end of its life.

The closure of the 4B shaft will be subject to consultations with organised labour representatives and affected non-unionised employees.

Further, the Rowland shaft, Marikana operation, has not delivered as planned for an extended period owing to various operational constraints and has achieved only 64% of planned production in the year to date.

Remedial actions have failed to address this underperformance. As an alternative to closure, management proposes a rightsizing of operations that will require a reduction in the employee complement to secure the longer-term viability of the shaft.

Lastly, the Siphumelele shaft, Rustenburg operation, experienced significant seismic activity during 2022 which, for safety reasons, restricted access to certain planned production areas.

As an alternative to closure, rightsizing of the workforce to support the current reduced average yearly production forecast is proposed. Employees who have not yet been deployed to other shafts and are impacted by the final restructuring will be consulted in terms of the Section 189 process.

Owing to the considerable amount of people affected, management says it found it prudent to begin with the Section 189 consultations process on the potential restructuring of the identified shafts together with associated support services and has invited affected employees and/or their representatives to engage in consultations as required by Section 189A of the Labour Relations Act.

The objective of the consultation process is to, among other things, consider alternative measures to minimise job losses and ensure the long-term viability of the Rowland and Siphumelele shafts.

Various alternatives have already been considered by management and organised labour representatives in Future Forum meetings, Sibanye says, adding that all reasonable options that may be suggested by affected employees through their representatives to address the losses during the Section 189A consultation process will be welcomed and duly considered.

“We do not underestimate the potential impact of any form of restructuring and commit to constructively engaging with affected employees through their representatives in an effort to minimise job losses.

“Unfortunately, it is imperative that we engage in this process to ensure the sustainability of our South African PGM operations and the benefits and value they bring to multiple stakeholders,” says chief regional officer Richard Stewart.

In September, Sibanye also started discussions with stakeholders regarding the future of its Kloof 4 gold operation in South Africa, citing ongoing losses as the reason for the proposed restructuring of that operation.