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As strike ends, workers and Sibanye are in a world of pain


As strike ends, workers and Sibanye are in a world of pain

Strike had an immediate economic effect but broader financial and social consequences will still play out

Allan Seccombe

The numbers coming out after the five-month strike at Sibanye-Stillwater’s gold mines are mind boggling and put into context how damaging protracted labour action can be.
Moody’s, the credit ratings agency, estimates the cost of the strike by the Association of Mineworkers and Construction Union (Amcu) to be R2.2bn. That is about a quarter of the R8.4bn Sibanye posted in 2018 as earnings before interest, tax, depreciation and amortisation. It’s a massive amount of money for a company struggling with loss-making gold shafts at its Driefontein and Beatrix mines.
Consider that Sibanye issued shares for about R1.7bn and raised a further R1.75bn by selling gold it expects to produce in the final quarter of 2019.
For the 14,000 employees who were on strike for those five months in a no-work no-pay scenario, their combined losses come to between R700m and R800m. For their families this is a devastating loss. Amcu says it gave its members vouchers, but the strikers likely turned to microlenders and their exorbitant rates to see them through. It will be interesting to see how many garnishee orders these returning employees will have against their salaries.
The financial effect on businesses around the mines where employees buy groceries, furniture, services and other necessities is yet to be measured.
The government will forgo taxes and royalties on unmined gold and the losses Sibanye is sure to report against its gold mines, certainly in the first half of its 2019 financial year to end-June.
The strike had an immediate economic effect but there are broader financial and social consequences that are still to play out. As the platinum sector heads into its wage talks in June, these damaging consequences need to be borne in mind by both sides to avoid a repeat of a fruitless strike.​

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