September 25, 2019 / 9:49 AM / 21 days ago

Sibanye plans to cut over 5,000 jobs in Marikana restructuring

JOHANNESBURG (Reuters) - South African miner Sibanye-Stillwater (SGLJ.J) said on Wednesday it planned to cut around 5,270 jobs, or about 6% of its workforce, as it restructures its loss-making Marikana operations that it acquired this year.

Sibanye said the restructuring was aimed at returning the mine to profit and protecting its remaining shafts, driving its share price up 6% to 21.28 rand.

Sibanye took over the mine as part of a deal to buy out struggling platinum miner Lonmin. It first proposed buying Lonmin in 2017, in a deal touted as the only way to save its 29,000-strong workforce.

Lonmin had previously planned to close shafts and cut around 12,600 jobs.

After a review, the company has decided to keep operating some shafts that were at risk of closure, and an improvement in platinum metals group prices means the job losses are smaller than those Lonmin foresaw, Sibanye said.

“Overall, the outcome will be a more sustainable business which is able to secure employment for the majority of the Marikana workforce for a much longer period,” Sibanye CEO Neal Froneman said in a statement.

The operations are where 34 striking miners died in 2012 after being shot by police in an event that became known as the ‘Marikana massacre’.

The company has also been cutting jobs in its gold mining operations in a country where job cuts are politically sensitive due to widespread unemployment - especially in the mining sector, where frequent, mass redundancies often affect poor, black workers.

South Africa’s unemployment rate hit a 11-year high of 29% in the second quarter of the year, with mining suffering the biggest decline as it lost 54,000 positions.

The majority union in the platinum sector earlier this month said wage talks with Sibanye and rival Anglo American Platinum (AMSJ.J) (Amplats) were deadlocked, raising the possibility of a strike.

That would be a blow to an industry that is still reeling from a 2014 strike that cost billions and forced firms to cut jobs and close mines after a supply glut weighed on platinum prices.

Reporting by Tanisha Heiberg, Alexander Winning and Emma Rumney; editing by Deepa Babington

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