Union threatens to strike over potential layoffs
The National Union of Mineworkers (NUM) said it would oppose any lay offs and its members might go on strike if the company tried to trim staff.
"We will fight any retrenchments through all legal means and will even resort to strike action if we have to," NUM General Secretary Frans Baleni told Reuters.
Sibanye has been a star performer with a share price that has almost doubled since it debuted in early 2013. On Friday it fell almost 4 per cent, laid low by NUM's comments and gold's slide to a 7-1/2 month low. Johannesburg's Gold Mining index was 0.17 per cent lower.
Sibanye said it had entered "into section 189 consultations on the future of the Cooke 4 mine" — a reference to a legal requirement that companies must talk with organised labour and other affected parties in advance about potential lay offs.
Reuters reported on Thursday that Sibanye planned to cut up to 2,500 workers at Cooke 4, an operation near Johannesburg which the company recently acquired.
The company, which only mines in South Africa, has a workforce of around 39,000 in total, plus 5,000 contractors.
Sibanye spokesman James Wellsted said it was premature to talk about precisely how many jobs might be on the line.
"We do not know how many people will be laid off, the 2,500 number is roughly the number of employees at Cooke 4," Wellsted told Reuters.
"The idea is to enter discussions with unions and all employees to try and avoid any retrenchments if possible."
Sibanye said it needed to find "sustainable solutions to ensure delivery of the required productivity and profitability levels at the Cooke 4 mine."
Wellsted said Cooke 4 had been impacted by government-ordered safety stoppages and its productivity had suffered.
He said a similar process last year at its Beatrix West mine, where an underground fire hit output and revenue, led to under 100 job losses as employees were redeployed to other parts of the company and the operation was restored to profitability.
SBG Securities mining analyst David Davis said Sibanye had acquired the Cooke assets, which include underground and surface operations, mainly for the above-ground remining of waste dumps which has become profitable.
"The underground mines are marginal at current gold prices and Cooke 4 is extremely marginal," Davis told Reuters.
When Sibanye acquired the Cooke assets earlier this year, South Africa's competition regulator set as a condition that no redundancies be made for two years "as a result of the merger."
But Sibanye's Wellsted said this condition did not apply if the job cuts were made for operational reasons unrelated to the merger and acquisition.
Job cuts are a thorny issue in South Africa where labour relations in the mining shafts are raw, the unemployment rate is around 25 percent and income disparities rooted in the apartheid era remain glaring.
Sibanye is a spin off from Gold Fields, which last year folded its labour-intensive South African operations into the separate company so it could focus on mechanised mining.
Sibanye is regarded as a dividend play as it is mining mature assets which generate cash and with a few exceptions are not expected to require large amounts of capital expenditure.
Its dividend yield is currently a hefty 5.11 per cent, well above the 2.77 percent average for Johannesburg's All-share index.
But its policy of giving cash back to shareholders will sharpen labour resistance to any lay offs.
"They claim to be the most profitable gold mining company in South Africa, so how can they retrench?" NUM's Baleni said.