[miningmx.com] — MORE than 9,000 workers at Exxaro Resources (Exxaro) could receive up to R117,000 each when the group’s MPower employee share participation scheme matures in November this year.
That’s according to Exxaro finance director Wim de Klerk who said the estimate was based on an Exxaro share price of around R180.
Exxaro shares eased by just over 100c to trade at levels around R176 on the JSE, despite the release of excellent results for the six months to end-June which included a 50% hike in the interim dividend to 300c.
This is the second announcement of a major pay out to mine workers from their operating companies in the last month.
On July 21 Kumba Iron Ore (Kumba) CEO Chris Griffith said that 5,000 Kumba employees at the group’s Sishen mine could receive up to R500,000, each also in November, when the Envision broad-based employee share participation scheme matures.
Exxaro is the major black empowerment partner to Kumba holding 20% of the Sishen mine in the Northern Cape through the structure created when the former Kumba Resources was split into Exxaro and Kumba five years ago.
Both groups set up share participation schemes to incentivise workers who were not covered by the traditional corporate share incentive schemes.
Both groups intend replacing the current five year schemes when they expire with similar replacement share incentive schemes which will run for another five years.
Speaking at a presentation of the group’s results for the six months to end-June in Johannesburg on Thursday, Exxaro CEO Sipho Nkosisaid, “despite the challenging times in South Africa the mining companies continue to demonstrate how they can add value and jobs to the country”.
“This includes measures that are to the benefit of all our employees such as the MPower share incentive scheme.
“This demonstrates that the country’s new mining laws are being put into practice and for people to claim that mining companies are not making a contribution is out of line.
“The facts are that more money is going to employees and black economic empowerment partners so that everybody is benefitting.’
Nkosi said Exxaro’s strategic intent remained to become a more diversified commodities group and the aim of getting into the iron ore business remained part of that despite, having been outbid for Australian junior Territory Resources by Noble Minerals.
He commented, “we had a setback with Territory. A number of analysts queried why we were interested in that tiny mine in the first place, but I assure you we did not go blindly into making that offer.
“We sent in our teams to make our own assessment and we know we could have done quite a lot with that mine.’
In July Griffith also indicated Kumba was looking at diversifying into new iron ore projects in West Africa with the aim of producing 20mt of iron ore from the region annually by 2020.
He added Kumba would not undertake such a project on its own and would most likely bring in a suitable partner.
Asked whether Exxaro might be interested in becoming Kumba’s partner in a West African venture Nkosi replied, “if and when Kumba bring us a proposal we will look at it and take a decision”.
