Sibanye-Stillwater CEO Neal Froneman has disclosed that the company is still navigating through a period of instability, despite having secured a wage agreement with labour unions.
The agreement included a 5.5% wage increase along with a one-off payment of R900 for various employee groups, set to take effect for one year. The company plans to revisit wage discussions in July 2025 when the one-year wage agreement expires.
While current conditions in the gold market have seen prices rise, South African gold producers, including Sibanye-Stillwater, are facing mounting operational costs that necessitate a strategy of cost rationalisation.
In light of the recent wage agreement, Froneman emphasised the importance of balancing employee needs with the financial realities of the company’s operations.
“We are pleased to have finalised this wage agreement, which is both fair for employees and affordable for the SA gold operations. We therefore believe it is more prudent and fair to re-engage again in July 2025,” said Froneman.
He explained that the one-year wage offer was “in contrast with recent five-year agreements” signed between South African platinum group metals (PGM) and gold companies and organised labour.
This was so as Sibanye-Stillwater’s “SA gold operations have undergone significant restructuring in a very volatile inflationary environment and the operations have not yet fully stabilised”.
Sibanye-Stillwater’s SA gold operations uplifted adjusted earnings before interest, taxes, depreciation, and amortization by 292% to R1.35 billion for the quarter to end September 2024.
The company has attributed the stronger gold category earnings to a 24% increase in the rand gold price received for the period.
This was despite the company’s SA gold operations recording a dip in bullion production excluding DRDGOLD by 12% to 4.26 tons compared to 2023 same quarter.
All-in-sustaining costs for Sibanye-Stillwater’s SA gold operations excluding DRDGOLD at R1 414 450 per kilogram was also 9% higher than the previous comparative period.
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