Sibanye’s senior VP for investor relations, James Wellstead, tells the OFM Business Hour, that they are trying to avoid closing down the Beatrix 4 shaft near Welkom in the Free State, despite the mine’s drop in productivity and profitability. At risk in this restructuring process are just under 2000 jobs and 465 contracts which are mainly at the Beatrix 4 shaft and less so at the Kloof 1 plant in Gauteng. Sibanye says rising input costs, such as loadshedding, as well as a general drop in production has led them to this restructuring decision.

Whilst the retrenchments remain a possibility at this stage, word thereof remains devastating for the Free State goldfields which now battle persistent youth unemployment and an ailing local economy as aged mines shut down. In February 2022 Harmony Gold, announced the closure of its Bambanani mine outside Welkom in the Free State – earlier than expected. Harmony Gold’s Financial Director, Boipelo Lekubo, said at the time that Bambanani was always set to close down within three years of it being acquired by the mining giant, however, an uptick in seismic activity in the five months preceding the announcement at the Free State mine forced Harmony to bring the closure forward by two years. 

The move at the time was said to result in a R144 million write-down for the company. The Harmony Financial Director said that the company didn’t envisage a forced retrenchment process owing to the closure adding the affected 1500 employees would be redeployed to any one of the mining giant’s remaining operations in central South Africa. Whilst this was good news for the existing employees, it meant a reduction in economic activity for the goldfields area.

Also Read: Harmony to close FS-based Bambanani mine earlier than expected

Beatrix 4 shaft - a matured mine

Wellstead says the Beatrix 4 shaft is a matured mine having had operated since 1985 and is scheduled for closure in the coming years either way. The situation paints a worrying picture of the state of gold mining in South Africa with the Sibanye-Stillwater VP for investor relations adding that “in 1990 there were over 40 listed gold mines and today we now have 4 or 5”. 

MARKET RELEASE
Sibanye-Stillwater enters Section 189 consultations regarding the future of the Beatrix 4 Shaft and Kloof 1 Plant https://t.co/YAS9KnMXh1

— Sibanye-Stillwater (@SIBSTILL) November 1, 2022 ">

MARKET RELEASE
Sibanye-Stillwater enters Section 189 consultations regarding the future of the Beatrix 4 Shaft and Kloof 1 Plant https://t.co/YAS9KnMXh1

— Sibanye-Stillwater (@SIBSTILL) November 1, 2022

This places a bigger emphasis on the importance of post-mining economies in keeping the local economy of mining towns going following closures. This is echoed in a sit-down with the Agri-hour and Buyambo Mantashe, Business Development Manager at Agri Enterprises, in which he revealed that agriculture can be the solution to former mining towns, because “the fundamentals of these two sectors are extremely related and can ensure sustainability.” According to Mantashe, transition from mining to agriculture could be a swift one as mining jobs as well as agricultural jobs are often low and semi-skilled jobs. 

Also Read: Agriculture could be solution to towns where mining operations closed down

Mantashe further explained that “the nexus between mining and agriculture for the economic development of mining towns, is often understated. What is becoming increasingly vital is that the economic and social considerations of these mining towns need to be taught now to create sustainable opportunities post mine closure". 

The mine denies that protracted strike action that took place earlier on in 2022 by the Association of Mineworkers and Construction Union (AMCU) and the National Union of Mine Workers (NUM) may have contributed to this decision. Wellstead maintains that once operations returned to normal, management realised that productivity and profitability were an issue at the aforementioned operations.

OFM