(Bloomberg) — Sibanye Stillwater Ltd. said the biggest unions at its gold mines gave notice that their workers will go on strike from Wednesday after talks over a new wage deal failed.
The strike threat comes as the South African company faces soaring costs at some of the world’s deepest and oldest gold mines. Sibanye last year temporarily halted operations at its Beatrix mine until April after safety challenges. A strike at the gold operations in 2019 ended after five months, with workers accepting a deal the union had initially rejected.
Chief Executive Officer Neal Froneman reiterated that the precious metals miner won’t amend its latest wage offer, which he said takes into account the inflationary environment and the sustainability of the gold industry.
“Wage increases that are higher than inflation are not sustainable and cannot be considered,” Froneman said in a statement on Tuesday. The strike will “jeopardize the sustainability of our gold operations and, ultimately, their futures,” he said in a warning to workers.
The notice from Association of Mineworkers and Construction Union and National Union of Mineworkers comes after workers at Sibanye’s three gold mines voted to strike last week. The unions plan to continue talks with Sibanye on Tuesday morning, NUM acting General Secretary William Mabapa said by phone.
Sibanye has offered to increase monthly wages by 700 rand ($46) in each of the next three years. The unions want 1,000 rand. The company’s offer equates to an increase of 6% in the first year. South Africa’s consumer inflation rate currently stands at 5.7%
Sibanye’s Driefontein, Kloof and Beatrix gold mines employ about 31,000 workers. While gold output last year rose 10% to about 892,000 ounces, expenses surged 7% to $1,749 an ounce.
Sibanye shares fell 2.9% by 10:44 a.m in Johannesburg, erasing earlier gains.
The strike may not be protracted after the limited success of the previous action, and given fatigue with labor unrest and the weak economic environment in South Africa, UBS Group AG analysts including Steven Friedman said in a note to clients.
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