Multinational mining and metals processing group, Sibanye-Stillwater (NYSE: SBSW), has initiated S189 consultations regarding the possible restructuring of its South African gold operations due to ongoing losses and operational constraints at the Kloof 4 shaft, as announced on Thursday, September 14, 2023. The company stated that this decision comes after numerous unsuccessful attempts to address productivity issues and other operational constraints at the Kloof 4 shaft.
The situation was exacerbated by a recent incident at Kloof 4 shaft, which occurred on August 1, 2023, causing significant damage to the shaft infrastructure. This has led to a severe deterioration in productivity and threatened the financial viability of the Kloof 4 shaft.
The potential restructuring could affect as many as 2,389 employees and 581 contractor employees at the Kloof 4 shaft. Through the formal S189 consultation process, the company plans to work with affected stakeholders to consider measures to mitigate possible job losses and explore alternatives to potentially ceasing or downsizing operations and associated services.
Richard Cox, Executive Vice President and Head of the SA gold operations, expressed his intent to engage with all relevant stakeholders in an effort to avoid job losses while attempting to limit the impact on the remainder of the operations and employees at the SA gold operations.
The Kloof mine is an intermediate to ultra-deep level gold mine located in the West Wits Line of the Witwatersrand Basin, near Randfontein and Westonaria, approximately 60km west of Johannesburg. It was one of three original assets acquired when Gold Fields (NYSE:GFI) International completed its unbundling transaction in February 2013. As of December 31, 2022, Kloof had combined surface and underground gold mineral reserves of 3.4 million ounces (Moz) and mineral resources of 25.9 Moz. The mine produced 158,182 oz of gold in 2022 at all-in sustaining costs (AISC) of $3,025/oz.
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