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.
As workers in South America and Indonesia strike for better wages and to receive more of a share of mineral wealth wrought by rising copper prices, a mine in South Africa is handing over cash to its employees.
The Financial Post reports on Kumba Iron Ore’s employee share ownership scheme, whereby workers who have been at the mine more than five years can earn a lump sum of 345,000 rand (about US$43,000):
A unit of global miner Anglo American, Kumba has already paid out 279 million rand in dividends to the same employees, an average of 55,000 rand per person over five years.
The sum is based on the iron ore producer’s profits over the past five years. The program affects 6,200 mineworkers.
FP shows how the money can change lives, using the example of one mineworker, Christopher Mocwane, who plans to use a US$68,700 windfall to buy his mother a house. He makes $835 a month.
“I’m going to buy myself a house. The one where I live now, I’ll fix it and give it to my mother,” he told Reuters, wiping the sweat off his forehead in the scorching heat. “She was very happy when I told her.”
The program “has become a poster child for South Africa’s much-maligned Black Economic Empowerment scheme aimed at giving blacks a stake in the economy after apartheid was dismantled in 1994,” FP reports.
Black Empowerment requires companies to meet quotas on black ownership, employment and procurement.
2 Comments
Johannes Rasco Jaddafi
profit sharing plan ideal in this era where production is of fundamental fuction of the survival or future of mines in this usa/euro crisis
Mayurk
it’s brilliant i am really happy for them