Precious metals producer Sibanye-Stillwater has concluded a five-year wage deal with labour unions at its Kroondal platinum mine.
The agreement with representatives of Association of Mineworkers and Construction Union (Amcu) and the National Union of Mineworkers (NUM) to ensure labour relations stability at the mine comes as mining houses are facing elevated cost pressures while average platinum group metals basket prices are a lot weaker than they were in recent times.
Mining houses and organised labour have been largely able to avoid protracted and costly industrial actions for years.
The five-year wage agreement is similar to the terms and increases reached at the group’s Rustenburg and Marikana operations in 2022.
It is inflation-linked, with lowest paid employees receiving a minimum-wage increase of 6% in each of five years.
Miners, artisans and officials will also receive an increase of 6% in each year of the five-year agreement.
The estimated average increase in the total wage bill, including all benefits, is 6.4% a year over the time horizon.
“The agreement secures wage stability in the operations which will benefit all stakeholders,” CEO Neal Froneman said in a statement.
Sibanye has taken heavy blows over the years from organised labour in an industry not immune to lengthy, costly and violent industrial action over wages.
The group in February tallied the cost of the debilitating three-month strike last year at its SA gold operations which resulted in billions of rand in lost earnings.
The company’s profit for 2022 halved to R19bn from R33.8bn reported in 2021 partly due to reduced production from the SA gold business in the period.
Sibanye said last week it was taking full ownership of the low cost, mechanised Kroondal operations earlier than expected after Anglo American Platinum (Amplats) opted to sell its 50% in the joint venture.
In terms of the sale agreements entered early in 2022, Kroondal’s infrastructure has been used to mine through the boundary into Sibanye-Stillwater’s adjacent Rustenburg operations resource to the benefit of the two players.
This enabled Amplats to generate cash flows from its 50% share of the remaining economic reserve of Kroondal earlier and at a lower cost of production.
The disposal of Amplats shares will be effective after delivery of the 1.35-million ounces, which is expected to be in the second quarter of 2024. Amplats will sell its 50% interest in the joint venture to Sibanye-Stillwater for a nominal consideration of R1.
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