Strike to begin at Sibanye-Stillwater’s US operations

Sibanye-Stillwater (JSE: SSW; NYSE: SBSW) faces a strike at its Stillwater East mine and Columbus metallurgical complex in Montana after more than four months of contract negotiations failed to produce an agreement.

The United Steelworkers gave notice that workers covered by the collective bargaining agreement would strike from 7 a.m. Thursday, Sibanye-Stillwater said Wednesday. About 420 workers are affected, according to KTVQ. The company’s East Boulder mine has a separate collective agreement and is not included in the strike notice.

The dispute centres on health-care costs and changes to incentive pay, Andrew Cameron, an underground miner and member of the union negotiating committee, told Montana Free Press. The union says a proposed incentive system could significantly reduce earnings for some workers, while Sibanye says a larger incentive pool would be distributed more evenly among hourly employees.

Shares in Sibanye-Stillwater closed 2.5% stronger at 52.35 rand apiece in Johannesburg on Thursday, valuing the company at 148 billion rand (C$12.8 billion).

Wage hike

Sibanye’s latest proposal included a 5% wage increase this year followed by smaller raises over the next two years, KTVQ reported. The company has proposed changing its incentive-pay structure as part of an overhaul aimed at increasing productivity and reducing costs at its U.S. platinum group metals operations.

The proposed agreement would also increase employee health-care costs. Sibanye spokesperson Heather McDowell told Montana Free Press that the company is spending about $30 million annually on employee health care and that its U.S. PGM business is operating around break-even at current metals prices.

Sibanye said it remains committed to reaching an agreement that recognizes employees’ interests while allowing operational changes it says are needed to secure the longer-term sustainability of the U.S. PGM operations.

Stillwater East and East Boulder produced 137,930 oz. of platinum and palladium during the six months ended June 30. Stillwater East contributed 76,334 oz., or about 55%, equivalent to an average of about 446 oz. per day, according to Sibanye.

The company said the eventual production impact would depend on the strike’s duration, operating arrangements, processing availability and the time required to restart affected operations.