Sibanye-Stillwater is Sticking to its Compensation Arrangement

Sibanye-Stillwater is Sticking to its Compensation Arrangement

As labour pressure mounts, Sibanye-Stillwater stays hard on its pay agreement. Sibanye-Stillwater, a precious metals manufacturer, said it would not be forced to accede to labour union requests for greater salaries, which had called on their members to escalate the strike.

This comes after the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (Amcu) announced on Tuesday that the strike at the mining firm’s operations, which began on March 9, will be extended.

As of yesterday, the strike has lasted 36 days, during which time the principle of “no labour, no pay” was in effect.

Uasa and Solidarity, two labour unions, approved the mining company’s pay offer in February, which included a R700 per month raise in basic annual salaries for Category 4 employees over three years: 6.8% in year one, 6.4 percent in year two, and 6% in year three. This will increase the salary cost for South Africa’s gold activities by R1.5 billion.

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NUM and Amcu, on the other hand, have rejected the salary offer and are demanding a 9.8% raise in year one, 8.8% in year two, and 8.2% in year three for Category 4 personnel, significantly above inflation and adding R2.5 billion to the firm’s wage cost.

“The additional R1 billion in wage base from union demands is equivalent to an approximate R40 000/kg increase in costs, which would essentially erode the R46 443/kg All-in Sustaining Cost (AISC) margin achieved in 2021 (average unit revenue for 2021 of R849 709/kg – R803 260/kg average AISC for 2021), endangering the operations’ sustainability and potentially negatively impacting all stakeholders, including employees,” the mining company said.

“We will not be bullied into acceding to demands that are not inflation linked, expensive, and jeopardise the viability of our operations,” stated Richard Cox, executive vice-president: SA gold operations at Sibanye-Stillwater. Any deepening of the union strike in this regard would have no bearing on our position of protecting the interests of all stakeholders.”

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Sibanye-Stillwater also encouraged labour unions to respect the rights of employees at its South African gold business who did not support the pay strike.

“This is seen by the minimal employee engagement in picketing locations protests and the frequent resignation of members from Amcu and the NUM,” it stated.

“Striking employees have lost roughly R790 million in pay, while the government has lost around R90 million in PAYE, income tax, and salary related levies, as well as much more in missed taxes and royalties,” he added.

“If the strike continues until the end of April, striking employees will have lost all value from a salary raise,” the firm said.

The strike may expand to Sibanye-platinum Stillwater’s group metals (PGM) facilities, according to reports.

However, the business stated that it had not yet received word of a further strike at its PGM facilities and that if it did, it would take proper legal action.

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“Wage negotiations at the Sibanye-Stillwater SA PGMs operations have not begun and will only commence in June/July this year, as in prior years,” Sibanye-Stillwater said.

The firm’s shares were down 0.78 percent in intraday trade at R61.40, after rising 345 percent in three years on rising commodities prices.

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