Poor Sibanye Gold. Less than two weeks since the companys official listing on the JSE and the company has already reported its first incident.

The South African deep level gold mining company (a wholly owned company of Gold Fields) reports that a fire broke out in a raise line on 20 Level, Beatrix 4 Shaft at 10 pm on 19 February 2013.

Beatrix management, with the assistance of its mine rescue teams, managed to successfully contain the affected areas and evacuate the entire mine by 7 am, 20 February 2013, without any injuries, or employees exposed to undue danger.

In order to ensure the continued safety of its employees, Sibanye Gold has suspended operations at Beatrix 4 Shaft while it assesses the situation and brings the fire under control.

The affected area on 20 Level, Beatrix 4 Shaft accounts for some 2700 m of the 7500 m mining planned at Beatrix 4 Shaft. As a result of the high levels of smoke and gas being generated however, it has been deemed prudent by management to suspend underground production at Beatrix 4 Shaft until the full impact of the fire has been assessed.

Sibanye Gold needs to remain leveraged to the gold price while generating free cash flow, CEO Neal Froneman said when the company listed, admitting that there were certain changes are needed to achieve this. “Changing the way we operate will be important as it will help us reduce costs, reduce our margins and optimise our balance sheet.”

A fire of this nature will definitely impact on its production targets for the mine, meaning additional operational focus is required from Sibanye Gold. Control needs to be regained urgently to minimise impact on its ounce output.

Sibanye Gold‘s 2013 production target is 1.4 Moz, which requires optimising Beatrix (immediately) as part of its strategy to achieve this.

Beatrix 4 Shaft produces approximately 7011 oz of gold per month or 24% of the total produced by the entire Beatrix operation (approximately 28 869 oz per month).

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