Integrated Annual Report 2014

Group profile

Reported G4 indicators:

The word "Sibanye" means "We are one" in isiXhosa, one of the 11 official languages spoken in South Africa and the mother tongue of the majority of our workforce, drawn from labour-sending areas in the Eastern Cape province of the country.

operations and projects map [map]

WHY SIBANYE?

Sibanye is the largest individual producer of gold from South Africa and is one of the world’s 10 largest gold producers.

Geographically focused on South Africa, Sibanye currently owns and operates high-quality gold operations and projects throughout the Witwatersrand Basin.

As a responsible corporate citizen, we foster and maintain constructive engagement with all of our stakeholders in order to deliver on our vision of creating value for all stakeholders, to maintain our licence to operate, and ultimately for the long-term success of the business.

Our skilled and experienced workforce is a key stakeholder, and the safety, health and well-being of our employees are critical to our long-term success.

CARE CULTURE

Sibanye conducts its business in an ethical and fair manner, and promotes a non-sectarian, apolitical, socially and environmentally responsible corporate culture.

This is achieved by living the CARE values:

  • Commitment [icon]

    Commitment: Delivering on our promises to all our stakeholders

  • Accountability [icon]

    Accountability: Accepting responsibility for our actions and their consequences

  • Respect [icon]

    Respect: Showing regard and consideration for others

  • Enabling [icon]

    Enabling: Creating an environment where it is possible to work safely and productively

In pursuing these principles, we require our employees, officers and directors alike to adhere to and be bound by a Code of Ethics.

Sibanye is an independent, South African-domiciled mining group, which currently owns and operates four underground and surface gold operations – the Cooke, Driefontein and Kloof operations in the West Witwatersrand region, and the Beatrix Operation in the southern Free State province. In addition to its mining activities, the Group owns and manages significant extraction and processing facilities at the operations where the gold-bearing ore is treated and processed before it is refined. The Group has a number of organic projects including the West Rand Tailings Retreatment Project (WRTRP) on the Far West Rand and the Burnstone project on the South Rand of Gauteng province, as well as the Beisa North, Beisa South, Bloemhoek, De Bron-Merriespruit, Hakkies and Robijn projects in the Free State.

Sibanye is the largest individual producer of gold from South Africa and is one of the world’s 10 largest gold producers. In 2014, the Group produced 49,432kg (2013: 44,474kg) or 1.59Moz (2013: 1.43Moz) of gold at an All-in cost of R375,854/kg (2013: R354,376/kg) or US$1,080/oz (2013: US$1,148/oz) and invested R3.3 billion (2013: R2.9 billion) in capital at its operations.

In 2014, in line with our strategy to create value by extending the operating lives of Group assets and in support of our dividend yield strategy, we assumed control of the Cooke underground and surface operations from Gold One International Limited (Gold One); concluded the acquisition of Witwatersrand Consolidated Gold Resources Limited (Wits Gold), a JSE and Toronto Stock Exchange (TSX) listed gold and uranium exploration company with significant gold resources in South Africa; and exercised the option held by Wits Gold to acquire the Burnstone gold mine from the previous owner, Great Basin Gold Limited (Great Basin Gold).

Sibanye’s dividend policy is to pay at least 25% to 35% of normalised earnings to shareholders. The Group will return excess cash back to shareholders through the declaration of special dividends where appropriate. The Group has become established as a benchmark dividend payer in the global gold industry and intends to maintain this position.

SHAREHOLDER BASE

Sibanye’s corporate office is located close to Westonaria, in the province of Gauteng, near our West Wits operations. The Group’s primary listing is on the JSE, trading under the share code SGL, where it is a constituent of the JSE’s Socially Responsible Investment (SRI) index. The Group has a secondary listing of American Depositary Receipts on the New York Stock Exchange, which trade under the ticker code SBGL. Each American Depositary Receipt is equivalent to four ordinary shares.

At 31 December 2014, Sibanye had issued share capital of 898,840,196 shares (2013: 735,079,031) – 1,000,000,000 authorised – and market capitalisation of approximately R20.3 billion (2013: R9.0 billion) or US$1.8 billion (2013: US$874 million).

The Group’s diverse shareholder base predominantly comprises institutional investors located in China (20%), South Africa (31%), the United States of America (37%), the United Kingdom (2%), Saudi Arabia (1%) and others (8%) at 31 December 2014. The Group’s Chinese shareholders (20%) own their position through Gold One. Sibanye has a 100% free float and its three largest institutional shareholders (holding 23.25% of the Group) at 31 December 2014 were Allan Gray Proprietary Limited (Allan Gray) (9.98%), the Public Investment Corporation (SOC) Limited (PIC) (7.94%) and Old Mutual plc (Old Mutual) (5.33%).

Following the acquisition of the Cooke Operations, Gold One holds a 19.80% interest in Sibanye at 31 December 2014.

The Group is committed to transformation and is guided by the Mining Charter. In 2004, Gold Fields Limited (Gold Fields) undertook a black economic empowerment (BEE) transaction, transferring an amount equivalent to 15% of its equity from Sibanye, formerly GFI Mining South Africa Proprietary Limited (GFI Mining South Africa), to Mvelaphanda Gold Proprietary Limited (Mvelaphanda Gold). In 2010, 10% of equity was allocated to an Employee Share Ownership Plan (ESOP) and another 1% in an empowerment deal. At the end of 2014, 27,959 employees were participants in the ESOP.

PRODUCTS AND MARKETS

Sibanye mines, extracts and processes gold ore to produce a beneficiated product, doré. The doré is then further refined at Rand Refinery Proprietary Limited (Rand Refinery) into gold bars with a purity of at least 99.5%, in accordance with the Good Delivery standards determined by the London Bullion Market Association. The refined gold is then sold on international markets.

Sibanye holds a 33% interest in Rand Refinery, one of the largest global refiners of gold, and the largest in Africa. Rand Refinery markets gold to customers around the world.

OWNERSHIP STRUCTURE
Ownership structure [structure]
  1. * Newshelf 1114 Proprietary Limited (Newshelf 1114) holds a 100% shareholding in Rand Uranium and Ezulwini, the activities of these companies include the Cooke Operations. On completion of the Newshelf 1114 BEE structure, Sibanye will have a 74% interest in Newshelf 1114. The negotiated Newshelf 1114 BEE structure will include an additional 2% to be issued to an Employees Trust Fund of which the financing mechanism is still being finalised.