Gold Fields rises on planned spinoff announcement
NEW YORK (AP) — Shares of Gold Fields climbed more than 4 percent on Thursday after announcing that it was spinning off two mines that have been wracked by labor strife.
THE SPARK: Gold Fields Ltd. said that it wants to create a new South African gold mining company from subsidiary Sibanye Gold Ltd.
Gold Fields, which is based in South Africa, is the fourth-biggest producers of gold.
Sibanye holds the KDC and Beatrix gold mines and various service companies. If approved by the New York Stock Exchange and the Johannesburg Stock Exchange, Sibanye will list as a separate, independent company on both exchanges in February 2013.
Gold Fields said that there will be no job cuts as a result of the spinoff.
BACKGROUND: There have been a string of labor disputes in South Africa's mines. Gold Fields said Monday that strikes at its KDC and Beatrix mines resulted in production losses of 35,000 ounces during its third quarter.
Last week Harmony Gold Mining Co. Ltd. said that two of its workers were killed and another injured in violence at its Kusasalethu mine near Carletonville. And violence during strikes at Lonmin PLC's platinum mine near Marikana led to the deaths of 46 people, including 34 miners who were shot dead by police.
Gold Fields spokesman Sven Lunsche said that like most other gold mines in the country, Gold Fields has experienced strikes at its KDC and Beatrix mines. Lunsche stressed that the strikes had no impact on the company's decision to spin off Sibanye, as it started discussing the spinoff possibility in the middle of the year, well before the strikes started.
SHARE ACTION: Gold Fields' stock gained 53 cents, or 4.5 percent, to $12.38 in midday trading. Over the past year, the shares have traded in a range of $11.39 to $17.34. The stock is down 24 percent for the year to date.