Kumba Iron Ore qualifying workers are set to receive a dividend of R14 649 per worker at the end of August from the company’s high flying broad based black economic empowerment (BBBEE) ownership scheme.
Kumba announced the dividend yesterday saying Envision, the BBBEE scheme, has earned a total of R271m during the six month ended June. From this, R95m goes to be shared by about 6600 Kumba workers with each employee set to receive a before tax payout of R14 649 (R12 451 after tax) at the end of August.
Kumba operates one of the richest iron ore mines in the world Sishen. As such Kumba workers along with other investors are reaping the benefits of high iron ore prices which have seen the Anglo American subsidiary post impressive performance over the past few years. Iron ore, primarily used in steel manufacturing, has ridden the commodities wave of the past few years as largely driven by strong demand from the East, mainly China. The general commodities boom has since softened with China’s economy softening but iron ore have sustained gains of the past few years. Having been quoted around $50/ton in 2007, the metal reached levels around $180 in 2011 and has since declined to average $127 last year. The iron ore price has bounced back to hit levels around $140.
About its latest BBBEE dividend, Kumba said this was the fourth dividend payment of the second phase of the scheme. Since March 2012, employees have received a total dividend payment of R41 508. This was over and above the initial cash payment in December 2011 at the conclusion of the first phase when each permanent employee below management level who has been with the company since inception received R576 045 (R345 627 after tax). This was a life changing event for many employees who used the money to pay off their debts, buy property, provide for their children’s education and, in many cases, buy a car for the first time.
Kumba CEO, Norman Mbazima, said “Envision is a broad-based success story for our employees, our community and our country. Envision sits alongside our diverse broad based empowerment initiatives and sets a benchmark for empowerment goals and ideals in South Africa. We are immensely proud of its continued success.”
Envision forms part of Kumba’s three-part empowerment programme which delivers transformation to the corporate, employee and community fields. Our empowerment programme includes the SIOC Development Trust which targets community growth and poverty alleviation through the investment and support of local projects for health, education, enterprise development and more. The Trust’s work is aligned with Kumba’s own Social and Labour Plans and the company’s partnership with Exxaro, one of South Africa’s most significant black controlled and economically empowered companies.
At Kumba’s interim results presentation on 23 July 2013, the company reported that the SIOC Community Development Trust would receive R262 million for its community development projects. And in the first quarter of 2012, the SIOC Community Development Trust used its dividends on 140 projects, which include 31 new approved projects this year, benefitting 361 000 people in the communities around Kumba’s mines. The key objective of the SIOC CDT is to help communities become empowered and economically active in a way that will be sustainable long after mining ends.
Commenting on Kumba’s transformation efforts, Norman Mbazima, said: “Since inception, Kumba has worked to deliver a meaningful contribution to South Africa that goes beyond the mining industry. We have brought and continue to strive for job creation, skills development and a new standard of safety and operational excellence in our work. We also seek to achieve real transformation in our workforce and the communities around our mines. I believe Envision truly embodies this on-going effort.”