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Illegal strike at Cooke Mine sees Sibanye lose R160m

Jun 30 2017 11:24
Liesl Peyper

Cape Town - Sibanye Gold [JSE:SGL] estimates that its Cooke Mine situated in Randfontein in Gauteng lost 300kg of gold production, equivalent to R160m, during a four-week unprotected strike.

The company said in a statement that operations at Cooke will resume on Monday, following the unprotected strike, which started on 6 June 2017. 

The unprotected strike ensued after the mine prohibited workers from taking food underground - a measure that has been agreed upon by the majority union, Sibanye said.

"The ban on food being taken underground by employees was aimed at preventing food from being provided to illegal miners by employees, following signs of collusion," Sibanye said in a statement. 

READ: Tensions rise as NUM blames AMCU for attack on miners in illegal strike 

So far, 77 employees have been arrested for assisting illegal miners. Since the strike began, thus indirectly preventing food being taken underground, 472 illegal miners have surfaced from underground and have been arrested.

Sibanye obtained a court interdict on June 8  2017, compelling striking miners to return to work. The interdict was however ignored and disciplinary measures were taken against striking employees. 

READ: Sibanye gets nod to buy US mine despite Trump's tough talk 

"The employees were provided the opportunity to appeal, a process presided over by an independent chairperson," Sibanye said. "The outcome of the appeal resulted in the dismissal of 99 employees being uphold, 407 employees are placed on final warnings and forfeiting their salaries and a further 869 forfeiting annual leave, in order to compensate for non-productive shifts." 

The company said the arrest of 472 illegal miners at the Cooke Operations, which are active, operating mines, indicates the extent of the illegal mining activities and the risks that this growing criminal activity poses to its operations, employees and communities. 

The Cooke Mine has failed to meet production targets for some time and Sibanye is of the view that illegal mining and collusion by employees to assist the illegal miners have likely played a meaningful role in the underperformance. 

"The Cooke Operations have been incurring financial losses and have been under strategic review for some time. The additional losses incurred, due to this strike, further impact on the economic viability of these operations," said Wayne Robinson, CEO of Sibanye’s Gold Division.

READ: Mining Charter sees bloodbath resume on JSE 

Sibanye Gold's share price traded 1.12% lower at R15.06 around 11:00 on Friday. The company's share price also recently shed more than 5% following the release of an investor-unfriendly new Mining Charter in which the black shareholder target for mining firms was upped from 26% to 30%. 

Read Fin24's top stories trending on Twitter:

sibanye gold  |  strike action  |  gold mining
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