Mining stock to watch: Sibanye Gold Ltd (NYSE: SBGL)

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Sibanye Gold Ltd (NYSE: SBGL) two biggest South African unions got permission to strike over pay after a deadlock in gold wage talks. SBGL stock fell over 3.6% on 12th October, 2018 (as of 10:46 AM GMT-4; Source: Google finance) . The National Union of Mineworkers and Association of Mineworkers and Construction Union received strike certificates at Sibanye after negotiations were referred to the Commission for Conciliation, Mediation and Arbitration, Minerals Council South Africa, an industry lobby group. AMCU was also granted permission to strike at Harmony Gold Mining Co. The approval ensures that the work stoppage is legal, which means employees can’t lose their jobs for participating.

The country’s biggest gold companies began wage negotiations with unions in July. Mining-industry jobs sunk to the lowest since at least 2009 following thousands of job cuts, while elevated levels of inequality and poverty mean that talks are highly charged and can result in strike action. Sibanye, the largest producer of South African gold, reduced its wage-increase offer for artisans and officials to 5 percent on Sept. 26 from 5.2 percent previously, trade union Solidarity said in an emailed statement. The offer to raise monthly pay by 625 rand ($44) for entry-level workers is lower than the 1,000 rand more proposed by AngloGold Ashanti Ltd., it said. Sibanye didn’t lower its offer, spokeswoman Henrika Ninham said in an emailed response. “AMCU and NUM received certificates of non-resolution, but we are continuing to engage with the unions.” AngloGold and the NUM, Solidarity, UASA and AMCU concluded a three-year wage deal last week. The company is the world’s third-largest producer of the metal.

Harmony is offering higher-skilled workers a 6.3 percent increase, which Solidarity is taking to its members for consideration, it said in a statement Wednesday. Workers on similar pay grades at AngloGold got 6.5 percent. The NUM, which represents 59 percent of Harmony’s employees, will continue talks with the company, spokesman Livhuwani Mammburu said. AMCU represents 24 percent of the workers.

On the  other hand, Sibanye-Stillwater has announced the early tender results of its offer to repurchase up to US$350 million (including accrued interest) of the 6.125% Notes due 27 June 2022 (the 2022 Notes) and 7.125% Notes due 27 June 2025 (the 2025 Notes), issued by Stillwater Mining Company.  The repurchase of these instruments, which was scheduled to occur on the early settlement date of 19 September 2018, is consistent with delivery against the strategic goals of reducing the company’s leverage, thereby creating immediate value. The repurchase of the High Yield Notes and the Convertible Bond repurchase, retires approximately 30% of the long term debt at a nominal value of approximately US$415 million, thereby expecting to reduce annual interest costs by approximately US$25 million

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