[miningmx.com] — XSTRATA has threatened to pull out of its proposed employee share ownership plan (Esop) for South African workers after a labour dispute related to the scheme had culminated in a protected strike.
In a letter sent to trade union Solidarity, Xstrata said as a consequence of the dispute, management has decided to withdraw the Esop offer and suspend negotiations.
Xstrata laid the blame for the upshot on another union, the National Union of Mineworkers (NUM).
“If the Esop is withdrawn, that’s the end of the fight and the beginning of war,’ said NUM spokesperson Lesiba Seshoka.
The threat could either be a strategic negotiation move or be an indication that the group had never really been serious about the scheme, said Gideon du Plessis, deputy general-secretary of Solidarity.
The group had planned to involve some 12,000 employees at its coal and ferrochrome operations in a profit-sharing scheme, which would net workers 3% of the local operations’ after-tax profit a year.
According to Xstrata, the scheme is worth R2.6bn.
The dispute arose out of Xstrata’s intention to give a greater portion of the 3% to higher-level workers than to workers at lower professional levels.
According to Seshoka, an even distribution would have ended the dispute.
Were the scheme to be divided equally among the workers, the distribution to each worker would probably have amounted to between R4,000 and R5,000 last year.
Xstrata’s proposal, however, would grant workers at the highest professional slightly less than double that of the lowest professional level, according to Xstrata spokesperson Songezo Zibi.
This runs counter most other Esop practices in the mining sector, where benefits are generally shared equally. That is because Esops are used as part of group empowerment efforts.
The unions want Xstrata to follow this practice, but the company says its Esop is a profit-sharing scheme, not an empowerment scheme.
The only Xstrata division in the country that has still not attained the 2014 target of 26% black shareholding is the ferrochrome partnership with Merafe Resources. Merafe currently owns 20.5% but, according to Zibi, there are plans to increase this to 26%.
“We don’t need empowerment credits through the Esop. It’s an incentive plan, not an empowerment plan,’ he said
An equal distribution of the scheme, said Zibi, would run counter to Xstrata’s incentive schemes in other countries and create a problem. It would be unfair to lower-level workers in other countries.
The protected strike at Xstrata’s local operations has thus far had a much greater impact on its coal mines that its other operations, the group said in a statement on Tuesday.
NUM represents 71% of the workers at these mines.
Production was also said to have been affected at the Lydenburg ferrochrome plant, the Eland Platinum Mine and the group’s Rhovan Vanadium Project.
– Sake24
