Sibanye strike costs soar
The true costs of the five-month strike at Sibanye-Stillwater’s gold mines was laid bare in its March quarter numbers, with the cost of production at the Beatrix mine topping R1.1m/kg.
It also underlines the necessity of the restructuring of the gold assets Sibanye is undertaking and its warning that up to 6,670 people could be affected in the process, the results of which will be released in the coming weeks.
The Association of Mineworkers and Construction Union (Amcu) called a wage strike on November 21 2018, and ended it a few days short of a full five months on April 17, settling for little more than three other unions had agreed to in November.
But the damage done by taking out half the gold workforce on strike was revealed in the first quarter’s numbers.
Gold output, excluding that from the 38%-held DRDGold, a tailings retreatment specialist that was unaffected by the strike, fell by 63% to 106,948oz compared with the same quarter a year earlier. The all-in sustaining costs for the quarter were an astonishing R1,002,350/kg compared with the R550,000/kg a year ago.
The received gold price for the quarter was R588,040/kg.
The strike meant Sibanye was unable to realise the improved gold price, which averaged R507,719/kg a year ago.
The worst-affected mine – Beatrix in the Free State – noted all-in sustaining costs of R1.105m/kg for the quarter as underground output fell to just shy of 18,000oz from 59,350oz a year earlier.