The AMCU has informed Sibanye that it will begin secondary striking at the miner’s South African PGMs operations beginning next week.
After months of strikes led by the Association of Mineworkers and Construction Union (AMCU) at Sibanye-Stillwater’s (NYSE:SBGL,JSE:SGL) South African (SA) gold operations, the union has sent notice to the miner that it will now begin a secondary strike at the company’s SA platinum-group metals (PGMs) operations.
In a press release issued by Sibanye on Tuesday (January 15), the miner reported that the union would begin striking at the company’s PGMs operations next Tuesday (January 22) morning.
“Although not surprising, the notice for a secondary strike at our South African PGM operations in Rustenburg is disappointing, as all stakeholders will be negatively affected, but more so those employees who will be exposed to the no work, no pay principle,” stated Neal Froneman, CEO of Sibanye.
“Our South African PGM operations have been preparing for this outcome and as such have strike contingency plans in place to minimize the possible impact of a strike and our US PGM operations with their high exposure to a rampant palladium price continue to provide welcome diversification and support through the strike,” he added.
Froneman also noted that Sibanye has already reached an agreement with unions that represent the majority of the employees who work at the miner’s gold operations, and therefore, will not be making changes to satisfy AMCU’s “demands or threats.”
There are currently close to 17,400 people employed at Sibanye’s SA PGMs operations, with the AMCU representing approximately 56 percent of those employees at the Kroondal operations and 71 percent of the Rustenburg operations’ employees.
This secondary strike has been put into place as a way to support the AMCU’s ongoing strike at the miner’s gold operations on the West Rand and in the Free State. The strike, which began on November 22, was in response to the South African Competition Tribunal approving Sibanye’s purchase of platinum miner Lonmin (LSE:LMI).
The AMCU has said that it made the decision to take action against Sibanye due to its concerns surrounding the jobs that will be lost once the merger with Lonmin is completed.
It is believed that the takeover could result in approximately 3,188 employees losing their jobs, and a further 10,156 individuals could find themselves unemployed due to operational reasons once the transaction has closed.
Froneman commented on the strike at the time, stating, “[i]t is disappointing that AMCU leadership has chosen this course of action, despite ongoing engagement with AMCU representatives, since June.”
On December 19 of last year, the AMCU appealed the South African Competition Tribunal’s decision to greenlight the Sibanye/Lonmin transaction. In response to the appeal, the boards of both miners announced on Monday (January 14) that they would be extending the longstop date of the agreement from February 29 to June 30 of this year.
Sibanye and Lonmin noted that they both remain “fully committed” to the deal.
As of 12:23 p.m. EST, Sibanye was down 6.29 percent, trading at US$2.68.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.