Sibanye risks loss of mining right, says Mantashe

In extraordinary remarks in parliament on Thursday, mineral resources & energy minister Gwede Mantashe threatened Sibanye-Stillwater with the removal of its mining right because the company — in its 10th week of a bitter and prolonged strike in its gold division

— is no longer engaged in goldmining activities.

Sibanye, the world’s largest producer of platinum group metals, is the largest employer in the mining industry, with over 84,000 employees — most of them in SA. It produced a profit of R33bn in the 2021 financial year on revenue of R172bn, contributing significantly to the tax bonanza enjoyed by the fiscus from the commodities boom.

The minister threatened to take action against Sibanye in terms of section 47 of the Mineral & Petroleum Resources Development Act. The act requires the holder of a mining right to actively conduct mining, while section 47 empowers the minister to suspend or cancel a mining right if the holder fails to fulfil its obligations in terms of the right, among other things.

Before acting in this way, the rights holder has to be given the opportunity to make representations as to why the right should not be revoked. In addition, the principles of administrative justice have to apply.

In his concluding remarks after the debate on the mineral resources & energy budget vote in a mini-plenary of the National Assembly, Mantashe referred to a comment by Sibanye CEO Neal Froneman — who was recently the subject of controversy over his R300m sharebased pay packet — that the company had enough money to run the strike for years.

“In other words, the message he is sending to us is that he is not ready to actually mine gold. He has enough money to fight a strike and stop production for years and years,” Mantashe said.

“And that actually sends us a message that says the department, relevant officials look into the possibility of the application of section 47. A mine that does not want to mine but sit on the properties ... so that we can give that property to companies that want to mine gold.”

Mantashe, a former trade unionist, claimed that Sibanye management had not met face to face with the striking trade unions for the first two months of the strike. The department has had to intervene, he said, to bring them together, but Sibanye executives had walked out of the fourth meeting.

Sibanye head of investor relations and corporate affairs James Wellsted said the fact that the company was in a labour dispute was not an indication that it did not want to mine.

It wants to bring the strike to an end and has been meeting with the unions to try to find a solution, but the unions are sticking to their demands.

“What we are trying to do is

SECTION 47 EMPOWERS THE MINISTER TO SUSPEND OR CANCEL A MINING RIGHT IF THE HOLDER FAILS TO FULFIL ITS OBLIGATIONS

to preserve the sustainability of our operations and preserve jobs. What the unions are demanding is going to result in the early closure of those operations, which will mean early job losses, which will impact on other stakeholders that rely on the operations, like communities and small and medium enterprises, and will impact the national and regional economies as well,” Wellsted said.

“The reason we are holding out is that the industry cannot continue to absorb aboveinflation costs.”

The strike has so far cost workers more than R1bn in salaries. The Association of Mineworkers and Construction Union and National Union of Mineworkers — which jointly represent about 25,000 of the 31,000 workers in the gold division — downed tools on March 9, demanding an increase of R1,000 a month for three years, which amounts to a 9.8% rise in the first year, 8.8% in the second year and 8.2% in the third year for entry-level workers, including surface and underground miners.

Sibanye has tabled a final offer of R850, which includes an increase of R50 in the living-out allowance. The offer translates to an increase of 7.8% in basic wages in the first year, 7.2% in the second, and 6.8% in the third year, above the central bank’s 3%-6% inflation target.