Kumba employees to reap big payout

Johannesburg - Kumba Iron Ore [JSE:KIO] said on Tuesday that over 6 200 of its employees would reap a R576 045 payout in December as part of an "empowerment" plan aimed at non-managers.

Mining firms are required to meet quotas on black ownership, employment and procurement. Critics say such deals often enrich only a politically-connected elite, sparking a push by unions and the government for more broad-based schemes that benefit the rank and file.

The scheme by Kumba, a unit of global mining giant Anglo American, falls in the broad-based category as cleaners and drivers will receive the payout, which has been calculated based on a five-day weighted average of the Kumba share price prior to its close on November 17.

Kumba said in a statement that the after-tax payout would be just over R345 000.

The scheme is called Envision and over the past year Kumba organised workshops, industrial theatre performances and distributed comics to teach blue-collar workers how to pay off debt, invest in housing and not squander their newly-found wealth on cars or alcohol.

They were also taught how to pay taxes - a new experience for some because of their low incomes. Workers in the scheme earn between R5 000 and R20 000 a month, excluding benefits.

Kumba has already paid a total of R279m in dividends to the same employees over the past five years, each receiving on average R55 000.
 
Kumba chief executive Chris Griffith said Envision made business sense.

"We haven't had a strike in years. Employees are thinking all the time about how to continue to deliver what we are expected to deliver," he said.