Sibanye-Stillwater says shaft ‘incident’ to hit third quarter gold output

SIBANYE-Stillwater said it was facing a new disruption to gold output just over a year after resolving a three-month strike at the South African shafts.

The Johannesburg-listed precious metals producer said today an “incident” at its Kloof 4 shaft on July 30 resulted in damage to the shaft’s steelwork below 39 level. The extent of the damage was being assessed but operations had been suspended.

Kloof 4 shaft produces an average of about 9,650 ounces of gold a month accounting for 14% of annual production, excluding gold from Sibanye-Stillwater’s 50.01% stake in gold retreatment company, DRDGOLD.

The damage occurred during a safety trial run of the conveyance system ahead of hoisting employees up the shaft. Infrastructure damage occurred when the ascending counterweight to the conveyance hit “an unknown obstruction” in the shaft, said Sibanye-Stillwater. As a result, a number of ballast plates fell down the shaft.

No injuries were sustained during the event and employees were returned to surface unharmed but access via the shaft to underground between 39 and 46 levels is restricted, the company said.

Power has been restored to the shaft area to enable pumping of underground water while teams have started working on ensuring the safety of the shaft “to facilitate and plan essential repairs within the shaft barrel and assess the extent of the infrastructure damage below 39 level”.

About 31,000 workers at Sibanye Stillwater three gold mines embarked on a three-month strike for higher wages in March last year. The protests hit the producer’s gold output, which slumped 63% year-on-year in the six months through June 2022.

James Wellsted, spokesman for Sibanye-Stillwater said today the company didn’t suspect sabotage from this latest event, although an investigation had yet to reveal the cause of the obstruction. He also said Sibanye-Stillwater would resume mining above the affected level “as soon as possible”.

“It’s difficult to assume anything. The focus has been on getting everyone to surface and to restoring power to resume pumping,” said Wellsted.

“It’s why these safety protocols are run,” he said of the incident. “If they aren’t done the consequences could be dire.”

A reduction in gold output from Kloof comes at an especially unwelcome time for Sibanye-Stillwater which was heavily dependent on the performance of its South African platinum group metal (PGM) mines last year. A decline in PGM prices starting last year has continued this year, exacerbated by mining challenges.

Commenting in a production update for the first three months of the current financial year, Sibanye-Stillwater said it lost 5,200 ounces of 4E PGMs in the three months ended March as a result of copper cable theft. This compared to PGM production losses of 5,120 oz as a result of Eskom sponsored load curtailment.

Of R7.82bn ($441m) in first quarter adjusted Ebitda (earnings before interest, tax, depreciation and amortisation) – representing a near year-on-year halving – Sibanye-Stillwater’s gold production contributed R744m.

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