Sibanye Gold Union Ends Five-Month Strike in South Africa
(Bloomberg) -- South Africa’s Association of Mineworkers and Construction Union agreed to end a strike at Sibanye Gold Ltd.’s gold mines that has crippled production and squeezed the company’s finances.
The deal represents the end to almost five months of legal wrangling between the two sides, amid violence that left at least nine people dead. It suggests a cooling of tensions between Sibanye and one of its biggest unions ahead of potentially fractious platinum wage negotiations later this year.
AMCU has been on strike since Nov. 21 after refusing to join a wage agreement that Sibanye reached with other unions. In an apparent victory for Sibanye Chief Executive Officer Neal Froneman, the labor group has now signed the same three-year pact. Sibanye will also provide financial and other assistance to its gold-mine workers, including a one-time payment, a cash advance to be repayable over 12 months and transport to return to work.
Any workers dismissed for strike-related misconduct will be subject to normal disciplinary proceedings, Sibanye said Wednesday.
The labor action sharply reduced output at Sibanye’s gold mines and worsened a plunge in South Africa’s production of the metal. The work stoppage has also hampered Sibanye’s efforts to reduce debt, contributing to the company’s decision to sell shares earlier this month to shore up its balance sheet.
The strike reduced Sibanye output by about 110,000 ounces of gold and may have cost about 1.6 billion rand ($114 million), Froneman told reporters at the company’s headquarters southwest of Johannesburg. Thousands of striking workers at the three gold mines are expected to resume work on Tuesday, he said.
AMCU will use the experience to improve engagement and avoid such a lengthy strike in the future, said President Joseph Mathunjwa.
Sibanye and AMCU, which have agreed to a “relationship-building program” following the strike, still remain embroiled in a separate dispute over the mining company’s plans to buy Lonmin Plc.
They will also return to the negotiating table later in the year for platinum-mine wage discussions, with the industry already bracing for a tough round of talks. Still, Froneman said Wednesday he’s optimistic that a commitment from both sides to be “constructive” following the gold deal will flow into platinum negotiations.
Sibanye rose 6.6 percent in Johannesburg Wednesday, extending this year’s gain to 44 percent.
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