JOHANNESBURG (miningweekly.com) – The underground mining operations at the Cooke 1, 2 and 3 gold mining shafts on the West Rand have been placed on care and maintenance resulting in the retrenchment of 2 025 employees, in addition to the 1 350 who took voluntary separation packages, precious metals mining company Sibanye-Stillwater said on Wednesday.

However, 1 640 jobs at Sibanye-Stillwater’s Beatrix West in the Free State have been preserved, provided the gold operation averages a profit across any continuous three-months period, after accounting for all-in sustaining costs.

The Johannesburg- and New York-listed company also announced the saving of 132 jobs at the Cooke surface processing plant, which will continue to operate for as long as there is sufficient feed material for it to be profitable, subject to various cost-cutting measures being implemented.

An additional 620 employees will replace contractors involved in noncritical activities across the group. In total, 3 601 contractors have been displaced.

“It is pleasing to note that we have managed to ameliorate job losses through the consultation process,” Sibanye-Stillwater CEO Neal Froneman said in a release to Creamer Media’s Mining Weekly Online, adding that the employment of 3 282 people had been safeguarded and the company’s South African operations, which employ more than 60 000 people overall, sustained.

The restructure, owing to persistent losses at both Cooke and Beatrix West, followed the conclusion of a Section 189A Labour Relations Act consultation process, under the Commission for Conciliation, Mediation and Arbitration.

The Beatrix West jobs, the company said, had been saved through the adoption of productivity enhancement and cost containing measures, but both the underground operation and Beatrix 2 plant would be placed on care and maintenance in the event of the mine becoming lossmaking. 

That Cooke has been the victim of illegal mining and illegal strikes may have contributed to its closure. Sibanye-Stillwater protection services senior VP Nash Lutchman said earlier this year that the company estimated that it had lost between 3% and 4% of its gold production to illegal miners, which equates to more than R700-million in lost earnings.

In a presentation on the negative impact of illegal mining on the South African mining sector, he noted that the theft of copper, electricity cables, dragline cables, diesel and other materials prejudiced the economic viability of mining companies and posed a serious risk to mining infrastructure.

Illegal mining also resulted in far higher security costs, as well as work stoppages and caused “unquantified” environmental and social costs.

Lutchman lamented that, in addition to the professional syndicates that supported illegal miners, mine employees were often found to be collaborating with illegal miners. Earlier this year, 461 illegal miners were arrested at the Cooke operation.

Cooke also suffered from a month-long unprotected strike by workers after they were prohibited from taking food underground, a move taken to prevent food from being provided to illegal miners by employees.

More than 70 employees were arrested for assisting illegal miners and, following the ban on taking food underground, 472 illegal miners surfaced and were arrested, an astounding number for an officially functioning mine.

The Cooke operations have failed to meet production targets for some time, with illegal mining and employee collusion likely to have played a hurtful role to law-abiding mineworkers.

The illegal strike also cost all stakeholders 300 kg of planned gold production, worth some R160-million in revenue.

Legal action could be taken by the National Union of Mineworkers and the retrenched mineworkers and contractors against the Mineral Resources Minister, the Department of Mineral Resources and the South African Police for their inaction in the face of job losses, as well as any known syndicates that have been aiding and abetting gold theft.

Lutchman has estimated that illegal mining costs South Africa about R20-billion a year in lost mineral sales, taxes and royalties.