Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Over 33,000 workers of Harmony Gold Mining (NYSE:HMY), South Africa’s third-biggest gold producer, will be owners of direct shares in the company thanks to its employee share ownership plan (ESOP), announced CEO Graham Briggs today.
ESOP is an equity-settled share incentive and share appreciation rights scheme offered to Harmony’s workers. It consists of 4.29-million ordinary shares, at par value, and 8.58-million share appreciation rights, which could make up around 2.9% of the company.
According to Reuters, Harmony’s overall black ownership is already at 36%, above South Africa’s requirement that 26% of local operations be transferred to black investors by 2014.
“[ESOP] is a venture that recognizes the importance of the employees who sustain our business. They are, in essence, our ‘human gold’, said Briggs.
The National Union of Mineworkers (NUM) general secretary, Frans Baleni, added he believed “each and every employee at Harmony to be deserving of a portion of the success to which they contribute”
During 2011, discussions between the unions and Harmony centered on the value inherent in the ESOP for employees, and specifically the need to protect employee shareholders from the vacillations of the open market.
The plan was finally approved in December last year.
Watch CEO Graham Briggs’ announcement:
