South Africa: Gold Strike, Lay-Off Costs Leave Sibanye Earnings in the Red

Sibanye-Stillwater's Driefontein mine (file photo)

Precious metals producer Sibanye-Stillwater unveiled a first-half loss on Thursday, 29 August, hit by a lengthy strike at its gold operations and costs related to retrenchments. If gold and PMG prices retain their lustre, it should be back in the black by the end of the year, and it may resume dividend payments next year.

The Association of Mineworkers and Construction Union's (Amcu) strike at Sibanye-Stillwater's gold mines was a complete flop. It rolled on for five months, and its members achieved nothing after the union was forced to sign the same wage agreement that rivals had accepted. At least nine people were killed in violence related to the strike.

Another casualty of the strike was Sibanye's earnings. The company said on Thursday 29 August that it posted a headline loss of more than R1.2-billion in the six months to end of June compared to a profit of R101-million in the same period in 2018. The work stoppage contributed significantly to this, underscoring the costs associated with protracted industrial action.

Sibanye's earnings were also hurt by R397-million in costs related to retrenchments at its gold operations. Accounting procedures took a further toll, with a fair value loss of R533-million on...

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