Johannesburg - South African-focused Sibanye Gold [JSE:SGL] will increase its capital expenditure by 10% in 2015, it said on Tuesday, a rare case of a mining company boosting capex as rivals cut costs and reduce capital.
Sibanye, which releases its full-year results on February 19, said in an operating update that its gold production for 2014 was 1.59 million ounces, in line with its guidance.
"Capital expenditure is planned to increase by 10% to $320m, largely due to an increase in expenditure on projects to extend the operating lives of the mines and on growth projects," the company said.
The announcement comes at a time of general belt tightening in the global mining industry and cut backs in capital expenditure in the face of falling commodity prices.
Investors are especially wary of South Africa's mining industry because of labour unrest, power constraints, rising energy and wage costs and policy uncertainty.
Sibanye is a spin off from Gold Fields [JSE:GFI], which two years ago folded most of its labour-intensive South African operations into the separate company so it could focus on mechanised mining at a global level.
Sibanye is regarded as a cash-rich dividend play focusing on older assets which will not require the capital expenditure that a new mine would need.
But the assets still need money and the company has said it expects to be able to put money into projects while also maintaining a dividend policy of 25% to 35% of earnings.
Its current dividend yield is 4.13% compared to 2.94% for Johannesburg's All-share index, according to Reuters' data.
Sibanye has also said it expects to acquire platinum assets.