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SIBANYE GOLD LIMITED - Section 189 consultation with stakeholders at Marikana operation

Release Date: 25/09/2019 09:50
Code(s): SGL     PDF:  
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Section 189 consultation with stakeholders at Marikana

Sibanye Gold Limited
Trading as Sibanye-Stillwater
Incorporated in the Republic of South Africa
Registration number 2002/031431/06
Share code: SGL
ISIN – ZAE000173951
Issuer code: SGL
(“Sibanye-Stillwater” or “the Group” or “the Company”)

Sibanye-Stillwater enters Section 189 consultation with stakeholders at its Marikana
operation and associated services

Johannesburg, 25 September 2019. Sibanye-Stillwater (Tickers JSE: SGL and NYSE: SBGL)
advises that it will enter into consultation with relevant stakeholders in terms of
Section 189A (S189 process) of the Labour Relations Act, 66 of 1995 (LRA), regarding
the restructuring of its Marikana operation and associated services (the “Marikana
operation” (previously “Lonmin”)). This is pursuant to ongoing financial losses
experienced at these operations with certain shafts having reached the end of their
economic reserve lives.    The restructuring will result in the rationalisation of
overheads and the realisation of other synergies and efficiencies required to restore
profitability and ensure the sustainability of the remaining shafts at the Marikana

Through a formal Section 189 consultation process, the Company and affected stakeholders
will together consider measures to avoid and mitigate possible retrenchments and seek
alternatives to the potential cessation or downscaling of operations at the affected
shafts and associated services.

The S189 process follows a detailed three month review of the Marikana operation, post
the Lonmin acquisition becoming effective in June 2019. The review and planning process
included the simulation of alternative scenarios to minimize job losses.

Subject to the completion of the S189 consultation, the following actions have been
deemed necessary in order to ensure the sustainability of this operation:

-   Reducing and optimising the operational footprint including, inter-alia:
     - The cessation of operations at the East 1 (E1), West 1 (W1) and Hossy shafts
        and the open-cast operations. These shafts and operations are loss making and
        have reached the end of their economic reserve lives. Pending the outcome of
        the S189 process, it is proposed that these shafts will initially be placed on
        care and maintenance
     - Ameliorate associated cost at some of the Marikana shafts which have previously
        been placed on care and maintenance
     - Optimisation of downstream concentrators, smelter and refineries, including
        closure of the Eastern Platinum C-stream (EPC) and Rowland concentrator plants
     - Rightsizing of the related support services and overhead structures associated
        with the aforementioned shafts

-   Application of the Sibanye-Stillwater operating model to all mining and metallurgical
    processing units at the Marikana operation and the extension of existing Sibanye-
    Stillwater services to improve efficiencies and achieve cost savings necessary for

Approximately 5,270 jobs (~3,904 employees and ~1,366 contractors) are expected to be
lost due to the restructuring. As a result of an improved PGM commodity price environment
the amount of job reductions is significantly less than previously communicated by
Lonmin in 2017, with inter-alia, a plan to access sustainable reserves with enhanced
crew efficiencies at the 4Belt (4B) shaft complex, which was scheduled for closure,
retaining approximately 2,700 employees and contractors.
Between 2017 and September 2019 the workforce at Lonmin reduced by approximately 5,944
employees (including contractors), from 32,512 to 26,568.

The six month moratorium on forced retrenchments imposed by the Competition commission
Appeal Court will lapse on 7 December 2019.

Neal Froneman, Chief Executive Officer of Sibanye-Stillwater, commented: “The proposed
restructuring is contemplated to ensure the sustainability of the Marikana operation,
which is not a going concern as an independent entity. Whilst the review process
concluded that certain shafts, most of which were at the end of their operating lives,
would be affected, other shafts which had previously been at risk such as 4B shaft, K3
mining into Siphumelele ground, Roland mining into MK2 ground as well as K4 concentrator,
will continue to operate, thereby lessening potential job losses. Overall, the outcome
will be a more sustainable business which is able to secure employment for the majority
of the Marikana workforce for a much longer period“.

Since listing in 2013, Sibanye-Stillwater has, through steady growth, expanded its role
in the South African mining industry. The Group currently employs over 88,000 people
in South Africa, compared with 37,700 employees six years ago, and is one of the largest
employers in the South African mining industry.”

Please refer to for
a media sound clip by the spokesperson, James Wellsted.


James Wellsted
Head of Investor Relations
+27 (0) 83 453 4014

Sponsor: J.P. Morgan Equities South Africa Proprietary Limited

This announcement contains forward-looking statements within the meaning of the “safe harbour”
provisions of the United States Private Securities Litigation Reform Act of 1995. All statements
other than statements of historical fact included in this announcement may be forward-looking
statements. Forward-looking statements may be identified by the use of words such as “will”,
“would”, “expect”, “may”, “could” “believe”, “anticipate”, “target”, “estimate” and words of
similar meaning. These forward-looking statements, including among others, those relating to
our future business prospects, financial positions, ability to reduce debt leverage, business
strategies, plans and objectives of management for future operations and the anticipated benefits
and synergies of transactions, are necessarily estimates reflecting the best judgement of our
senior management. Readers are cautioned not to place undue reliance on such statements. Forward
looking statements involve a number of known and unknown risks, uncertainties and other factors,
many of which are difficult to predict and generally beyond the control of Sibanye-Stillwater
that could cause Sibanye-Stillwater’s actual results and outcomes to be materially different
from historical results or from any future results expressed or implied by such forward-looking
statements. As a consequence, these forward-looking statements should be considered in light of
various important factors, including those set forth in the Group’s Annual Integrated Report
and Annual Financial Report, published on 30 March 2018, and the Group’s Annual Report on Form
20-F filed by Sibanye-Stillwater with the Securities and Exchange Commission on 2 April 2018
(SEC File no. 001-35785). These forward-looking statements speak only as of the date of this
announcement. Sibanye-Stillwater expressly disclaims any obligation or undertaking to update or
revise these forward-looking statements, save as required by applicable law.

Date: 25/09/2019 09:50:00
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