Job cuts at Sibanye-Stillwater’s platinum group metals (PGMs) SA operations have spilt over to the US, where 100 jobs are at risk.
The Johannesburg-based mining company said on Wednesday it was restructuring its US PGM operations in response to lower palladium prices and to rein in operating costs.
CEO Neal Froneman said the restructuring isn’t expected to have a big impact on production but will result in significantly lower costs and capital requirements.
“We have taken decisive action to address costs at the US PGM operations, to ensure the sustainability of these long-life operations during a challenging period of lower-than-anticipated PGM prices,” Froneman said.
“This is not a decision we have taken lightly, and we will engage frankly and candidly with affected stakeholders.”
The majority of the affected workers will be at the Stillwater Mine, with the remainder spread between the East Boulder Mine, the Columbus Metallurgical Complex and Columbus offices as well as remote work locations.
“This follows the attrition of approximately 20 employees since the beginning of October 2023. A significant number of contract workers other than essential services will also be impacted, with the approximately 187 contract workers (69% of current primary mining contract workers) affected across the sites,” the company said in a statement.
In October the group said it may retrench as much as 8.6% of the workforce at its main SA PGM operations, laying bare the crippling impact of falling commodity prices over the past 18 months.
Sibanye is one of the world’s biggest PGM producers, along with Anglo American Platinum, Impala Platinum and Northam.
At least 4,000 of Sibanye’s total workforce of 46,432 employees in its local PGM operations could be without jobs at the end of the restructuring exercise, which will affect four of its shafts at Rustenburg in the North West.
Earlier in October, Morgan Stanley analyst Christopher Nicholson wrote in a note that Sibanye’s balance sheet could swing to a net debt position in the next two-and-a-half years.
Nicholson cast doubt on Sibanye’s ability to repeat the level of success in acquisition-led growth between 2014 and June 2023 as the company branches into the battery metals business to diversify its income streams across the US and Europe.
Amid much criticism, Froneman acquired unprofitable PGM mines in the Rustenburg platinum belt at the bottom of the cycle as he sought to insulate the group from the deep and costly SA gold mines hived off from Gold Fields in 2013.
He later oversaw a strategy that added more PGM assets to the group through the acquisition of US-based Stillwater.
Business Day reported in October that Coronation, one of SA’s largest asset managers with more than R600bn in assets under custody, had disinvested from the PGM sector, casting doubt over the long-term prospects of an industry that employs nearly 200,000 people in SA.
The asset manager said that companies in the sector, which is the largest employer of all mineral commodities producers in SA, should look at decommissioning unprofitable mines.
RMB Morgan Stanley analysts have said platinum miners need to adjust to lower prices for “longer”.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.