KUMBA Iron Ore has issued notices of potential retrenchment to 1,620 employees only weeks after reporting record earnings, said BusinessLive.
The Anglo American-controlled group, reported earnings before interest, tax, depreciation, and amortisation 37% higher at R45.8bn. The after-tax profit was R30bn compared to R21.3bn a year earlier. It also recently announced two large investments in its Sishen and Kolomela mines totalling R10.6bn.
The company delivered nearly R21bn of free cash flow during 2020 and paid out a total dividend of R60.90 a share, which was 86% of headline earnings.
Citing a statement from Solidarity, BusinessLive said Kumba intended retrenching up to 653 people out of the 1,620 staff notified they could be affected by the restructuring.
Kumba confirmed Solidarity’s statement adding in a statement of its own that it had: “… been on a business transformation journey over recent years” designed to “enhance our margins, extend the life of our mines, manage costs, reduce the break-even price and ensure we are sustainable for the future”.
Kumba’s staff costs in 2020 were R5bn, barely changed from a year earlier, said BusinessLive.
The company employs 6,141 people after steadily reducing its staffing numbers from nearly 11,800 in 2015. During 2016, Kumba cut a third of jobs at its flagship Sishen mine.
“It is unfair and simply insensitive of Kumba to punish workers amid a pandemic and an excellent financial performance with increased turnover, profits and dividends declared. The rationale put forward by Kumba simply has no grounds,” said Riaan Visser, deputy general secretary for mining, agriculture and the chemical industry at Solidarity.