Shares in precious metals producer Sibanye-Stillwater fell the most since late January, as the group’s meeting with unions ran into the night on Thursday in an attempt to resolve a two-month strike.
The group’s share price has fallen 17% in the past month and on Thursday it was down 7.9% to R49.57, the lowest close since early January.
Management met the Association of Mineworkers and Construction Union (Amcu) and National Union of Mineworkers (NUM) in an effort to find an amicable solution to the industrial action that started on March 9 and has resulted in striking employees forfeiting more than R1.2bn in wages.
Amcu general secretary Jeff Mphahlele said Sibanye management is “refusing to budge” and accede to the unions’ demands of an increase of R1,000 per month, a R100 rise in the living out allowance and a 6% increase for miners, artisans and officials.
The two unions, which represent roughly 25,000 of Sibanye’s 31,000 gold workers, rejected the company’s amended offer of an R800 salary hike, or 7.8%, a R50 living-out allowance increase, and a 5% raise for miners, artisans, and officials.
More than 20,000 members of Amcu and NUM — about a quarter of the group’s total workforce — are on strike.
Sibanye-Stillwater said on Thursday core profit fell almost a third in its first quarter to end-March, with gold production almost halving as the group deals with the strike and safety issues.
Adjusted core profit fell 31% to R13.7bn in the three months to end-March, with SA platinum group metal (PGM) production also dipping, partly due to a slower-than-expected ramp-up as workers in SA returned from the Christmas break, the company said.
Gold output, which accounted for 8% of the group’s core profit in 2021, fell 45% to 4.264 tonnes in the first quarter year on year. Operations at its SA gold operations ceased on March 9, when 10 months of wage negotiations failed.
The group also suspended underground operations at its Beatrix mine — which accounted for about a fifth of gold production in 2021 — in early December due to safety concerns, and operations only resumed in February.
SA PGM production fell 3% to 410,848oz and the group said there was “a slower than planned return to work at the Marikana and Rustenburg operations after the Christmas break”.
Still, Sibanye has maintained its full-year production guidance of between 1.75-million and 1.85-million ounces from its SA PGM operations, while guidance for gold output is suspended due to the strike.
Sibanye-Stillwater, valued at R140bn on the JSE, said its first-quarter core profit, on an annualised basis, equated to R55bn, down almost a fifth from 2021’s record R68.6bn but up 11% from 2020.
Sibanye said its first-quarter profits are its second-highest yet, and this signalled “a significant and sustainable transformation in the financial position and outlook of the group”.
With Luyolo Mketane
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