[miningmx.com] — THE National Union of Mineworkers (NUM) has agreed to bring the curtain down on a strike which saw the South African coal operations of UK-listed diversified group, Xstrata, grind to a halt for seven days last month.
Xstrata’s ferrochrome producing operations in South Africa were also affected by the strike in which some 12,000 workers downed tools amid union criticisms Xstrata’s proposed ESOP (employee share ownership programme) would have failed to distribute evenly some 3% of profits by the operations if adopted.
In terms of the agreement, Xstrata has promised to distribute the proceeds of the ESOP evenly while Government’s mineral resources department has agreed to recognise Xstrata’s ESOP as compliant with the Mining Charter.
The outcome is that Xstrata will receive the necessary credits to meet its 26% BEE ownership obligations across both its coal and alloys divisions while operations will continue at Xstrata. It is estimated Xstrata lost some 200,000 tons in coal production, although the group has not verified this estimate.
“We applaud both NUM and Xstrata on the co-operative spirit that they demonstrated during these negotiations in the national interest’, said Advocate Sandile Nogxina, special advisor to mines minister Susan Shabangu and mediator in the dispute.
Speaking last week, Songezo Zibi told Miningmx that the outcome to the dispute would be logical. “It was sitting right in front of our faces all the time,” he said, adding that perhaps Xstrata had been a tad naive in the conflict.
“We were never obliged to do an ESOP as we had mostly met our empowerment targets,” Zibi said. “However, the issue of the ESOP kept cropping up in annual wage discussions with unions so we decided to develop one,” he said.
Xstrata’s initial plan which drew the ire of unions was that the ESOP should be in line with group remuneration practices such that if was structured along lines of incentivisation.
However, this included providing greater benefits for higher levels, some of which were occupied by white males (about 16% of total employees affected), while the lower rungs of Xstrata’s employees benefited less from the ESOP.
Commenting on lost coal production, Zibi said:”There are various things that we can do to catch up production. It takes some time, but we can produce at a higher rate because our collieries aren’t always operating at nameplate capacity”.
Xstrata SA’s coal division is currently ratcheting production 45% to export tons totalling 18 million tonnes per year.
NUM agreed its workers would return last week after Shabangu directly intervened in the dispute. It confirmed its members would continue work at Xstrata’s operations.
