Sibanye Gold Ltd. (SGL) intends to get as
much as 15 percent of its energy from solar power to reduce
reliance for electricity supplies to its mines from South
Africa’s state-owned Eskom Holdings SOC Ltd.
The company is completing a study on the project and aims
to share the outcome with investors in about a month, Chief
Executive Officer Neal Froneman said today in a phone interview.
Solar energy would provide 10 percent to 15 percent of Sibanye’s
“The focus on solar was more to reduce our dependence on
Eskom because of its unreliability more than getting costs
down,” Froneman said. “But, if Eskom continues with the sort
of increases it has been implementing, it will be a more
Eskom, which provides almost all of South Africa’s
electricity, is struggling to meet a target of having 15 percent
more supply than demand as it contends with aging equipment and
delays in the construction of plants. Sibanye was among mining
companies asked to reduce energy use in November as Eskom
declared an emergency power shortage.
The gold producer, spun off from Gold Fields (GFI) Ltd. last
year, is working with Chinese suppliers and financiers on the
solar project, Froneman said. “The model involves Chinese
financing with Chinese solar panels and a commitment from us”
to buy them, Froneman said.
Sibanye last year agreed to buy a majority stake in the
Cooke operations of Gold One International Ltd., which is owned
by Chinese consortium BCX Gold.
Sibanye posted a 53 percent gain in headline earnings,
which exclude one-time items, to $147.5 million in the six
months ended Dec. 31, compared with $96.1 million in the first
half, it said today in a statement. This year’s profit numbers
can’t be compared with 2012 because the company was only formed
in February last year, Froneman said.
Production climbed 18 percent to 773,600 ounces and all-in
costs dropped 18 percent to $1,043 an ounce in the period.
“Our focus has always been to implement our new operating
model which essentially involves getting costs down,” Froneman
said. “Fifty percent of our costs are related to people.
There’s been a lot of restructuring on that side.”
Sibanye reduced its workforce by 5,300 to about 36,000 in
the past year and cut about 1,800 contractors, Froneman said.
The job losses have mainly been voluntary and affected
management as well as lower-level employees, he said.
Gold Fields spun off most of its South African mines to
create Sibanye in February 2013. While the move was aimed at
insulating Gold Fields from strikes, low productivity and short
mine lifespans, the company has declined 49 percent in the past
year in Johannesburg trading, while Sibanye has advanced 50
percent after attracting investors with its dividend payments.
Sibanye fell 1.5 percent to 20.20 rand by 10:24 a.m. in
Johannesburg. The FTSE/JSE Africa Gold Mining Index traded 3.2
Sibanye will pay a dividend of 75 South African cents (7
cents) a share for the six months ended Dec. 31, resulting in a
total payout of 1.12 rand a share for the year, the company
said. That gives a dividend yield of 5.5 percent, based on the
stock price at Feb. 18, it said.
Froneman, with fellow gold CEOs, negotiated a two-year pay
deal with unions in September that has brought more stability to
the industry, in contrast to South Africa’s platinum producers,
most of whose workers have been on strike since Jan. 23.
He has also cut costs, making lower-grade gold economically
viable. The company on Feb. 17 said reserves that can be mined
profitably increased 46 percent to 19.7 million ounces.
To contact the reporter on this story:
Kevin Crowley in Johannesburg at
To contact the editor responsible for this story:
John Viljoen at