JSE- and NYSE-listed Sibanye-Stillwater will start consultations with organised labour and other affected stakeholders about the possible restructuring of its South African gold operations as a result of ongoing losses over an extended period and operational constraints at the Kloof 4 shaft, in Gauteng.

The consultations, being undertaken in terms of Section 189A of the Labour Relations Act, follow numerous unsuccessful attempts to address productivity issues and other operational constraints, including seismicity and cooling constraints associated with the chilled water reticulation circuit, at the Kloof 4 shaft.

Together, these issues and constraints have contributed to sustained losses, even at recent high gold prices, Sibanye states.

It adds that this has been compounded by significant damage caused to shaft infrastructure in late July, when an ascending counterweight to the conveyance system encountered an unknown obstruction in the shaft, resulting in a number of ballast plates falling down the shaft.

The incident occurred during a safety trial run of the conveyance system prior to hoisting employees up the shaft and no one was injured.

"Together, these factors have resulted in a severe deterioration in productivity and have jeopardised the financial viability of the Kloof 4 shaft," Sibanye says.

It notes that the possible restructuring of the Kloof 4 shaft could potentially affect 2 389 employees and 581 contractor employees.

"Through the formal 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 and associated services," it adds.

“We will engage with all relevant stakeholders in an effort to avoid job losses, while attempting to limit the impact on the remainder of the operations and employees at the South African gold operations,” Sibanye executive VP and head of the South African gold operations Richard Cox says.

The Kloof 4 shaft produces more than 115 000 oz of gold a year.