Kumba money prospers Kathu

Kathu – In Kathu one currently finds almost one car for each camel thorn tree.

This Northern Cape mining town, situated in a camel thorn forest, was turned on its head on December 15 when Kumba Iron Ore [JSE:KIO], for which most of the 10 000 residents work, paid out large sums of money to permanent employees as part of its Envision share scheme.

The money has since flowed freely.

The people of Kathu have bought cars on a grand scale. According to municipal manager Moses Grond, traffic congestion is now so serious that in the mornings it takes anything from half an hour to an hour to travel less than the 5km to the mine. Those who previously used the mine's bus service have taken to commuting with their own wheels.

“As a result we have had to upgrade the road and erect two traffic lights,” he said.

There are no motor dealerships in Kathu, but dealers from Kuruman, Kimberley and Upington exhibited on a parking terrain beside the local Fit-it company, reports Rudi Combrinck, its owner. Exhibitors included Toyota, Ford, BMW, Volkswagen, General Motors and Yamaha motorcycle agencies.

One dealer in second-hand cars with whom Sake24 spoke, brought along vehicles from Lichtenburg and in the past three weeks sold 20 from a bakkie on the pavement – all for cash.

Furniture is also selling like hot cakes, says Elsabé Faber, manager of Beares in Kathu. “Our budgeted income for December was R423 000 and we have already reached R1m. Only 3% of that is on credit. 

"Even our branch in Kuruman, which has a target of R500 000, has reported R840 000.” Faber said the greatest challenge has been to stock up and deliveries from the Kimberley warehouse had to be increased.

She said the December income of a salesperson normally earning R7 000 a month shot up to R28 000, thanks to commission on the Kumba sales.

Not all shops in the town have benefited equally, but in the Kathu Village Mall things were hopping, said centre manager Riekie Terblanche.

Compared with the previous December, last month saw a 19% increase in traffic, she said. These were not new people, but the same ones returning again and again to buy.

According to provisional figures the amount spent in the centre on spectacles and sunglasses was 328% up on the previous December. About 189% more was spent on jewellery and 132% more on stationery.

Terblanche explained the stationery category includes electronic goods like cameras, laptops and PlayStation and Xbox game consoles.

Men's clothing sales rose (96% up) more than those of women's clothing (54%), and restaurant and fast-food establishment turnovers virtually doubled.

Rudi Bothma, manager of the Superspar in the centre, said his grocery store’s turnover was 53% up and that of the Tops liquor store next door 67%.

Annette Schoultz said DStv installations by their family business, J&R Computers, increased dramatically in December. Instead of the 30 installations per month, between December 15 – when the money was paid out – and Christmas there were 49 installations.

The shop moreover sold 20 high-definition personal video recorders (HD PVRs), for which there is normally little demand.

Many residents are worried Kumba employees will waste their money. Most members of the National Union of Mineworkers (Num) at Kumba earn about R5 000 a month, Num representative Lesiba Seshoka said earlier.

The manager of one of the smaller banks in Kathu, which must be unnamed according to company policy, said that the amount deposited in it in December was three times more than in a normal month.

Many Kumba workers also settled their overdue accounts with the Gamagara Municipality, said Grond. The municipal council had previously made arrangements with defaulters.

He showed Sake24 one account on which more than R18 000 had been owing, but would had been settled in full after the Kumba payout. These payments had improved the council's cash flow.

- Sake24