Sibanye says it'll take months to resume normal gold production

Sibanye Gold, South Africa’s largest gold producer, said gold production may only return to normal in the third quarter of this year after workers ended a five-month strike. 

While the mines are starting to resume production, Sibanye said it can’t predict how much gold the company will produce this year. Output plunged 63% in the first quarter as thousands of workers went on strike for five months over wages, according to a statement from the company.

• Subscribe to Fin24's newsletter here

Key Insights

While workers have started returning to work, the mines were “dormant” since November 21, so resuming full production will take a while. The setbacks could slow Sibanye’s progress in reducing debt.

The company said its ratio of net debt to adjusted Ebitda will likely fall to 1.8 by year-end, down from 3 at the end of the first quarter.

Sibanye is profiting from the rally in platinum and palladium, saying it received higher prices for the basket of metals it produces. 

Market Reaction

The shares were little changed at R13.17.