Sibanye is new kid on block

After months of illegal strikes, one of the worst-affected gold mining companies yesterday announced a restructuring of its South African operations.

Gold Fields will throw its marginal mining assets in one basket and its more lucrative assets in another.

The company got miners at its KDC and Beatrix mines back to work a little more than a month ago. Now it plans to spin off these mines into an entity named Sibanye Gold and will unbundle 100% of it to Gold Fields shareholders.

Gold Fields CEO Nick Holland was one of the first to publicly warn that restructuring could be on the cards as wildcat strikes swept across the mining sector. The company lost about R2-billion worth of revenue in the third quarter mainly due to the wildcat strikes.

Sibanye will be headed by Neal Froneman, who is currently the CEO of a much smaller gold miner - Gold One.

This will leave Gold Fields with only one gold mine in the country - the famed South Deep, which is thought to be one of the richest ore-bodies in the world, but is set to be mined in a highly mechanised way. All the rest of the company's assets will be open-pit or shallow underground operations, which are easier to mine.

The South African operations in Sibanye are all deep level, narrow vein and underground operations, Gold Fields said yesterday. These mines operate on thin profit margins.

Froneman is no stranger to marginal mines or wildcat strikes. Gold One itself was first in the gold sector to be hit by illegal strikes when the Professional Transport and Allied Workers' Union downed tools at the end of May.

Less than two weeks later, more than 1000 were dismissed after workers ignored an interdict obtained from the labour court.

Gold One, in the meantime, announced that it has appointed Chris Chadwick, currently chief financial officer, as its new CEO following the departure of Froneman.