Die Kwêvoël, Thabazimbi

Record safety, exports, earnings and dividends

Commenting on the results, Kumba Iron Ore (“Kumba”) CEO Chris Griffith said: “Driven by export volume growth and a 26% increase in iron export prices, Kumba delivered another set of outstanding financial results for 2011. We have achieved records in safety, exports, earnings and dividends.  We are particularly proud of the progress made at Kolomela mine, which delivered on its promises, five months ahead of schedule and within budget. These results, together with the exceptional safety performance demonstrate that our strategy of optimising value from current operations and investing in safe, quality growth projects, is delivering.

“We are also delighted with Envision, our broad based employee share scheme. Envision sits alongside our diverse broad based empowerment initiatives and sets a benchmark for employee empowerment goals and ideals in our country. Kumba has delivered meaningful broad based value transfer to our employees with a capital distribution of R2.7biillion, and R526 million distributed in 2011 to the communities in which we operate. This is in addition to our dividend paid to Exxaro of R3.5 billion”.

Financial highlights:

* Headline earnings increased by 19% to R17 billion

* Revenue increased by 28% to R45.8 billion – driven by 26% higher prices

* Operating profit of R32 billion; up 27%

* Cash generated from operations rose by 27% to R34.3 billion

* R8.7 billion paid to South African government

* Record R17.9 billion paid in dividends

* Total cash dividend of R22.50 per share; final cash dividend of R44.20 per share

Operating highlights:

* Exceptional safety performance; zero fatalities

* Envision returned R2.7 billion to employee shareholders

* Kolomela mine – production five months ahead of schedule and within budget

* Production at Sishen mine negatively impacted by abnormal rainfall during H1

* Record breaking 39.1Mt railed on the Sishen-Saldanha line

On the outlook for 2012, CEO Chris Griffith added: “Current volatile market conditions are expected to persist during the first half of the year. Iron ore prices in the second half of 2012 will be largely dependent on the improvement in the overall global economy, and in particular, the monetary policy easing in China.”

He said that waste mining at Sishen mine is anticipated to increase again this year, in line with the planned ramp up that commenced in 2009, which will put upward pressure on unit cash costs of production. Annual production volumes from Sishen mine are expected to increase back to design capacity. Kumba’s ability to supply iron ore to the market will be enhanced by the ramping up of Kolomela mine during 2012 to produce between 4Mt and 5Mt in 2012.

Export sales volumes in 2012 are anticipated to grow by some ~3Mt from the volumes achieved in 2011 as volumes from Kolomela mine ramp up, offset by the fact that excess finished product stockpiles at Sishen mine have been depleted to normal operating levels.

Domestic sales volumes remain dependent on the off-take requirements from ArcelorMittal.

He added: “Our growth target of achieving 70Mt by 2019 in South Africa remains intact. Several studies have been conducted in central and west Africa as part of the company’s growth strategy to establish a second mining footprint in Africa. Our focus continues to be on safety, production and mining volumes, sales and containing costs. These initiatives will help to lessen the adverse effects of inflationary cost escalations and operational cost pressures.”

The group’s total mining revenue (excluding shipping operations – R2.7 billion in 2011; R2.9 billion in 2010) of R45.8 billion for the year was 28% higher than the R35.8 billion of 2010. Operating profit increased by 27% from R25.1 billion to a record R32.0 billion. The group’s operating profit margin increased marginally to 66%. Excluding the margin earned from providing a shipping service to customers, the group’s mining operating margin remained stable at 69%. The operating profit achieved was impacted by the rise in operating expenses on the back of the growth in mining volumes across the group and above inflationary cost increases.

The group continued to generate substantial cash from its operations, with R35.3 billion (before the mineral royalty of R1.7 billion) generated during the year, 27% more than the R27.0 billion of 2010. These cash flows were used to pay aggregate dividends of R17.9 billion, R2.7 to Envision participants, taxation of R7.0 billion and mineral royalties of R1.7 billion during 2011. Capital expenditure of R5.8 billion was incurred, of which R2.7 billion was to maintain operations, mainly for Sishen mine’s fleet expansion programme. R3.1 billion was incurred to expand operations, mainly on Kolomela mine.

Kumba’s overall safety performance saw a significant improvement in 2011 with the enhanced safety improvement plans implemented in 2011 delivering results.  The group ended the year, for the first time since listing five years ago, without any loss of life. The group recorded 17 lost-time injuries (‘LTI’s’) for the year, which resulted in the LTIFR of the group improving to 0.08 per 200,000 hours compared to the 0.12 achieved in 2011, a 33% improvement.  Kolomela mine continued its impressive safety record and achieved 22.2 million fatality-free and LTI-free man-hours -  23 months without a lost time injury.

Notwithstanding the challenging start to the year caused by the abnormal rainfall, total tonnes mined at Sishen mine increased by 8% from 153.2Mt in 2010 to 165.0Mt, of which waste material mined comprised 72% or 119.0Mt, an increase of 17.0Mt or 17%. Production at Sishen mine decreased by 6% from 41.3Mt in 2010 to 38.9Mt.

Excellent progress was made at Kolomela mine, which was brought into production five months ahead of schedule, as a result of the outstanding performance by the project team and Transnet. A total of 30.3Mt of waste material was pre-stripped during 2011 (2010: 18.6Mt) as two open pits are being developed, at a cost of R953 million (R793 million for 2010), which amount has been capitalised.  The plant was successfully commissioned during 2011, delivering production of 1.5Mt for the year.

Kumba increased total sales volumes by 1% from 43.1Mt in 2010 to 43.6Mt in 2011. More importantly, export sales volumes increased by 1.0Mt or 3% from 36.1Mt in 2010 to a record of 37.1Mt as production was supplemented by stockpiled ore.  China accounted for 68% of the export sales volumes (61% during 2010). 73% of exports were sold under long-term or annual contracts and 27% at prices derived from index. Total domestic sales volumes for the year of 6.5Mt were down by 7% or 0.6Mt due to lower demand from ArcelorMittal South Africa Limited and plant shutdowns at the Saldanha and Newcastle plants.

A record breaking 39.1Mt was railed on the Sishen-Saldanha line in 2011, an increase of 7%, which includes 0.4Mt railed from Kolomela mine.

Demand for iron ore globally is largely dependent on the state of the steel industry worldwide and, more specifically, on that of the steel manufacturing sector in China.

The global economic uncertainty in the second half of the year, coupled with a credit liquidity squeeze in China, particularly affecting downstream steel stocking by end users and the construction sector, caused steel prices to fall. In turn, steel mills cut production, slowed purchasing of raw materials, focused on fine ore (rather than lump ore) and turned to sourcing lower grade ore to limit absolute costs. This halted increases in the spot price of iron ore and curtailed the demand and pricing for high quality and lump ore. By the end of the third quarter, steel production had started to slow noticeably as steel prices continued to weaken and market sentiment remained uncertain.

Steel demand and pricing in Europe has been subdued since April 2011, following concerns around the European sovereign debt crisis. Japanese steel production and prices were initially impacted by the earthquake and tsunami during the first quarter but recovered during the third quarter. However, as economic concerns increased this also weighed heavily on steel prices in Japan towards the end of the year. As a result, European and Japanese steel producers started to implement production slowdowns in an attempt to stabilise steel markets. Consequently, iron ore off-take in these regions has slowed and China was the target of diverted contractual tonnages from a number of suppliers.

Steel markets in China remain subdued but have stabilised and steel production decreases levelled out. Steel producers resumed the sourcing of iron ore during November 2011 as stocks had been run down and spot iron ore pricing found a support level provided by high cost Chinese domestic iron ore production. Spot prices have recovered and climbed to around $140.00/tonne CFR to China in December 2011.

The short-term outlook for the global seaborne iron ore market is impacted by ongoing macro-economic uncertainty. Monetary tightening measures to control inflation in emerging economies such as China started to have the intended effect.  In addition, a lack of co-ordinated policy response to tackle the European sovereign debt crisis also impacted demand. Despite the short-term macro-economic uncertainty, medium to long-term prospects for demand remains robust as China continues to industrialise and urbanise. Nevertheless, as China shifts from an investment intensive to consumption driven economy, the rate of growth for steel materials is expected to moderate to a more sustainable level.

While demand is a key driver for pricing, supply constraints also play a crucial role. In the short-term iron ore supply is anticipated to remain tight amid seasonal weather impacts in Brazil and Western Australia, and government’s moves in India to control exports. Ongoing challenges producers face in delivering new supply will lead to increasing capital intensity and underpinned long-term pricing outlook.

Kumba’s operating profit remains highly sensitive to the Rand/US Dollar exchange rate.

Mmasefako Lena Mosito, Mmakgomo Lettie Phasumane, Shadrack Sithole, Mapula Mosito, Marie Steenekamp, Louisa Sepoloane and Radikgwega Selomo. Back fltr: Sabelo Gumede, Cornelis Adrian Kramer, Tessa White and Barbara Gunther.

THABAZIMBI – As part of its social responsibility, Kumba Iron Ore – Anglo American mine through its social development, identified local NPO’s and NGO’s as beneficiaries of two mobile phones each.

Thabang Child and Youth Care Centre, Cansa, SAVF, CPF- Smashblock, Paralegal Association of SA, Tshepong Community Home Based Centre, Tlhogotshweu Centre for older persons, Bopanang Community Based Organisation, Thabazimbi Community Based Organisation, Thabazimbi Victim Empowerment Programme, Tambotie and Bosveld Oord received the phones on Tuesday, 31 January.

The cell phones each have a R50 airtime voucher that will be loaded on a monthly basis for the next two years which the mine believes will be used profitability by these organisations. Thabazimbi mine’s main focus is to support local organisations and give back to the community.

POSTMASBURG – Kolomela, the new 9Mtpa Kumba Iron Ore mine near Postmasburg in the Northern Cape has added another major achievement to its already excellent track record.  Not only is the mine development within budget and boasts an excellent mine and project safety record of 22 Million Lost Time Injury (LTI) Free Hours, it also started dispatching product to the port of Saldanha five months ahead of schedule and shipped the first ore for sale to customers in China.

The first production train left the Kolomela load-out station carrying 34 200 tonnes of ore on the 860km journey to the port of Saldanha on the 07th of December 2011. This follows the 342 wagon test train that arrived in the port of Saldanha on the 20th of November 2011 and the subsequent acceptance of the rail line by Transnet Freight Rail from Transnet Capital Projects.

The railed ore was stockpiled at the port of Saldanha ready to be dispatched to customers in Europe and Asia.  “The first shipment of 100 000 tons of Kolomela Lump left the port of Saldanha on 19 December 2011 on its journey to the port of Qingdao in China, from where it will be sold to Kumba’s existing customers.  This shipment is a significant milestone towards achieving the production ramp-up schedule of 4-5Mt (million tonnes) in 2012 and the expectation of reaching full production of 9Mtpa in 2013,” says Chris Griffith, CEO of Kumba.

The first train leaving Kolomela Mine was witnessed by the Kumba Board and ExCo members. Allen Morgan, acting Chairman of the Board, thanked the whole team for delivering a world class project. “We are extremely proud of the project and operations team, Transnet Freight Rail and all the contractors for delivering this project safely and in record time.” said Allen Morgan. Some of the main contractors that contributed were Hatch, GLTA, Tubular, BEW and Concor.

“This was a collaborative team effort from Kumba Projects, Kolomela operations and Transnet and could not have been achieved without the dedication and enthusiasm displayed by the teams”; said Francois Louw, Executive head of projects at Kumba.

“This line is the first of this length that Transnet has built in 36 years, and achieving this ahead of schedule and within budget is testament to the commitment of their Capital Projects team. We are proud to have partnered with Transnet in enabling the growth of Sishen, Kolomela and Saldanha”; says Chris Griffith.

“The delivery of the Kolomela project is in line with the Kumba growth strategy of ramping the South African production up to 70Mtpa by 2019”; concludes Chris Griffith.

Deur Elana Greyling

Plaaslike mynmaatskappy Resource Generation (Resgen SA) het aan die einde van 2011 ‘n ooreenkoms onderteken met die Lephalale Munisipaliteit vir die bou van nuwe rioolwerke in Marapong.

Dit het ‘n wen-wen oplossing tot gevolg wat beide die Marapong-inwoners en Steenbokpan boere ‘n sug van verligting laat slaak.

Die rioolwerke sal, met voltooiing, ‘n groot diens lewer aan die Marapong-gemeenskap en die risiko van omgewingsbesoedeling deur onbehandelde rioolwater verminder. In ruil hiervoor, sal die behandelde water aan Resgen SA se Boikarabelo myn voorsien word, met tussen 4 tot 16 Mega liters water om in die mynproses gebruik te word. Die water sal via ‘n nuwe pyplyn vir 68 km na die myn gepomp word.

“Ons is natuurlik verlig dat boere se grondwater of boere se kwota uit die Mokolodam nie deur hierdie myn ook bedreig sal word nie. Dit beteken egter nie dat ons die mynbou-ontwikkelings goedsmoeds aanvaar nie,” se Agri SA Limpopo president, Francois van den Berg. “Die rioolwerke kan die probleme in Marapong oplos, mits dit verantwoordelik bestuur word en deurentyd

gemonitor word om te verseker, geen besoedeling vind in Marapong plaas nie. Dis ook belangrik dat die kwaliteit van gesuiwerde water gemonitor word om besoedeling van grond en grondwater in die Steenbokpan-omgewing te voorkom.”

Hierdie ooreenkoms volg op twee jaar se suksesvolle onderhandelings en beplanning met die plaaslike munisipaliteit. “Volgens hierdie ooreenkoms sal ons die gemeenskap voorsien van broodnodige infrastruktuur en terselfdertyd ‘n waterbron vir die ontwikkeling van ons myn verseker,” sê Paul Jury, Resgen se besturende direkteur. Die maatskappy het die tender

laat in 2011 ontvang om die rioolwerke te bou en te onderhou.

Die konstruksie van die rioolwerke kan slegs begin word wanneer Resgen die nodige watergebruikerslisensie van die Departement van Waterwese ontvang.

“ Ons verwag binnekort goedkeuring van ons lisensie-aansoeke. Volgens wet mag ons nie begin om die gebied skoon te maak of met konstruksie begin voor ons nie in besit is van hierdie lisensies nie,” voeg Jury by. “Ons is gereed om die daad by die woord te voeg,” sê Resgen SA se Algemene bestuurder, Hennie van den Aardweg, “maar ongelukkig neem die lisensiëring baie tyd. Die watergebruikerslisensie kan byvoorbeeld tot ‘n jaar neem om uitgereik te word!” As alle tydlyne gevolg word, sal die rioolwerke operasioneel wees teen Januarie 2014.

Resgen SA sal verantwoordelik wees vir die befondsing van die konstruksie en die onderhoud tot die oorhandiging aan die plaaslike munisipaliteit na ‘n jaar. Van die oordragdatum, sal Resgen voorgaan om te betaal vir die onderhoud en bedryfskoste, insluitende versekering vir die 30 jaar termyn van die ooreenkoms. Die totale waarde van die ontwikkeling van die geaktiveerde riool behandelingswerke en afval hanteringsfasiliteite word beraam teen R 160 miljoen.

“Dit is die eerste van vele aktiwiteite wat ons vir die Limpopo-gemeenskappe beplan. Ons verwag om vir die volgende 30 jaar hier te opereer en dit is daarom krities dat ons ‘n goeie verhouding opbou met die gemeenskap,” sê Jury. Die lewensduur van die myn kan tot ‘n eeu strek.

Volgens me Maria Couquet, waarnemende munisipale bestuurder van Lephalale, is hulle verheug oor Resgen se betrokkenheid by die gemeenskap en die feit dat hulle bereid is om te help dra aan die immer groeiende las van ontwikkeling in die gebied.

Die maatskappy beplan om ‘n geraamde 733 plaaslike werkers aan te stel en op te lei. Dit is wel bekend dat Limpopo, saam met die Oos Kaap en Vrystaat, een van die armste provinsies in Suid-Afrika is.

Alexis Filia, student engineer, and his girlfriend from France.

Rhino Andalusite het hul personeel jaareindfunksie verlede jaar by Dewside Restaurant gehou. Gaste is met ‘n verwelkomingsdrankie en snapperye verwelkom waarna hulle aangesit het vir ‘n heerlike buffet-ete. Na die ete het die besoekers afgeskuif na die kroeg waar die DJ die gaste tot laat aan die gang gehou het.

Erika van Dorssen (Chairlady) and the kids of Smashblock Crèche.

AMANDELBULT – During the months of September through November, the Thusano ladies ensured yet more upliftment in their local community.

The Thusano Community Forum has established relationships with three crèches in the Smashblock Community and on 20 October 2011 these crèches were enriched with their own colourful Jungle Gums for the kids. This was received with great joy and the whole community watched as the children played till late that evening. The purpose of these Jungle Gyms is to ensure greater Motoric development among the children. Each child also received an ice-cream as part of celebrating their new Jungle Gyms.

November is Children’s month and the Thusano Ladies organized an “Activities Day” at the crèches in Smashblock and Rethabile. The children had tons of fun while learning new Drama skills, decorating their own cupcakes and making their own painting with only food colouring and ear buds.

Lastly the Principal of Chromite Primary School in Smashblock approached Thusano Community Forum for sponsorship and support for their Gr 7 Farewell on Friday 18 November 2011. With the help of Anema Denton who sponsored the food and drinks, Anglo Platinum Tumela Mine that ensured the kids arrive safely at the Kloof Resort in Rustenburg and Protea Coin that paid for the children’s entry fees, Thusano Community Forum was able to help these Gr 7’s have an unforgettable Farewell. The Forum would like to thank these respective sponsors for their contribution.

Any ladies living in Amandelbult that are interested in joining the Forum are welcome to phone Erika van Dorssen (Chairlady) at 082 7000 514.

Kumba, Thabazimbi myn se nooddiensspan saam met hul brandweerhoof, mnr Henk Havenga, mnr Henry Ford en mnr Harry Barnard, Hoof Higiënis: Kumba.

THABAZIMBI – Die drie groot myne in die Thabazimbi area se brandweer- en nooddiensspanne is op Vrydagaand 25 November by Kumba se Bioskoopsaal vereer vir hul harde werk die afgelope jaar.

Mnr Henry Ford, wat tans die skakelbeampte tussen die myne is, het ‘n hartroerende toespraak gelewer tydens die Erkennings-geleentheid en het dit pertinent beklemtoon dat die gemeenskap van Thabazimbi baie dankbaar moet wees vir hierdie nooddienspanne.

Die nooddiensspan van Union Mine, Swartklip saam met hul brandweerhoof, Louis Botha.

Hierdie mense is opgeleide personeel wat beurtelings 24-uur nooddienste lewer aan die uitgebreide Swartklip, Amandelbult en Thabazimbi area. Hulle het hierdie jaar verskeie plase gered teen gewisse uitbranding, talle motorwrakke oopgesny met die lewenskake, by die mynhope met toue afgehang en het ook selfs ‘n keer of wat in die Krokodilrivier geduik, dit alles om lewens te red.

Hulle hoogs suksesvolle skyn reddingsoperasie vroeër vanjaar het die spanne instaat gestel om tekortkominge in die span en ook in hul reddingstoerusting op te spoor en kon die myne sedertdien hierdie leemte vul sodat hulle die nodige diens aan die gemeenskap kan lewer.

Die Kwêvoël bedank hierdie spanne namens die gemeenskap vir hul toewyding en diensbaarheid aan die wye Thabazimbi area. Die gemeenskap is trots om hierdie drie spanne, wat voortaan as die Crocodile Fire and Rescue team sal heet, in hul midde te kan hê.

Die nooddiensspan van Amandelbult Myn saam met hul brandweerhoof, Johan Pieterse.

A favourable wage agreement, reached between the trade union Solidarity and Northam Platinum’s Zondereinde Mine near Thabazimbi, diffused a drawn-out wage dispute and brought renewed hope for the Christmas Season among Solidarity members, the trade union, Solidarity, today said. As part of a two-year wage agreement, Solidarity’s members at the mine will receive a wage increase of 9% backdated to 1 July, and next year, employees will receive an increase equivalent to the consumer price index (CPI) or 9%, whichever is the higher.

According to Solidarity Spokesperson, Louis Pretorius, category 9 employees at the Zondereinde Mine will receive a further 0,5% increase for years of service in addition to the 9% increase.

“The living-out allowance for employees will also increase by 9%, while a separate forum will consider further increases to this allowance in line with market related housing costs, given that mine housing is not sufficient anymore,” Pretorius said. Meanwhile, the employer also increased the three shift rotation allowance from 3% to 4,5% while surface artisans’ annual leave was increased from 28 days to 30 days. “As part of the agreement, employees will for the first time now also be entitled to 2 days’ family responsibility leave”.

Solidarity represents 500 miners, artisans and staff who have scarce skills, and this wage agreement comes as a welcome Christmas gift after tough, drawn-out wage negotiations over the past five months.

“During the previous round, the employer offered an increase of only 6,6% for 2011 and 6,8% for 2012. The agreement that was finally signed brings renewed hope to Solidarity members and shows that the mining company indeed values scarce skills. Moreover, Northam has also rewarded its employees for their perseverance,” Pretorius stated.

Kumba’s broad based employee share scheme valued at R2.665bn at first five year close.

Kumba Iron Ore Limited (“Kumba”) is delighted to announce the first maturity of Envision, its broad based employee share scheme with 6,209 permanent employee members. Envision has been valued at R2.665 billion at the conclusion of its first phase. This follows a share swap of The Envision Scheme’s 3% shareholding in Sishen Iron Ore Company (“SIOC”) for the equivalent Kumba shares.

Kumba CEO, Chris Griffith noted: “Envision is a broad based success story, an empowering initiative and something which we at Kumba, are immensely proud of. Envision sits alongside our diverse broad based empowerment initiatives and sets a benchmark for empowerment goals and ideals in our country.”

Employee members who have worked for Kumba over the five-year period since the Company’s inception will receive R576 045 (for their holding of 3,365 units in Envision). This equates to an after tax payout of R345 627, based on a marginal tax rate of 40%. The majority of Envision’s employee members have elected to receive the cash sum and can look forward to their Envision payout in December, instead of the equivalent in Kumba shares, which is the alternative option. This value has been calculated based on a five day weighted average of the Kumba share price prior to the official close of the first maturity on 17 November.

Commenting on the scheme, Kumba CEO, Chris Griffith said: “Since inception, Kumba has worked to deliver a meaningful impact on South Africa that goes beyond its corporate contribution to the mining industry. We have brought growth and continue to strive for job creation, skills development and a new standard of safety and operational excellence in our work. However, in addition to all of this, we seek to achieve real transformation in our workforce and the communities around our mines. I believe Envision truly embodies this on-going effort.”

Envision was established at the company’s inception in 2006 as part of Kumba’s broad based empowerment initiative. Designed for the promotion of black economic empowerment through an increase in broad based and effective participation in the equity of SIOC by HDSAs, the scheme targets permanent employees below the managerial level and who do not participate in the other Kumba share schemes. In this way Envision enables Kumba’s employees at the heart of the business, whatever their role, whether they are transporting ore, excavating the ore or other, to benefit from the operational and financial success of the company to which they contribute on a daily basis. Employee members of the scheme have already received up to R55,000 in dividends through the course of the past five years.

Envision sits within Kumba’s three-part empowerment programme incorporating transformation efforts which work to deliver within the corporate, employee and community fields. This programme includes the SIOC Development Trust targeting community growth and poverty alleviation through the investment and support of local projects for health, education, enterprise development and more. The Trust’s work also ties up 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, also working to deliver real empowerment, particularly in skills development and equity participation.

Chris Griffith added: “For Kumba, the conclusion of this, Envision Phase I, marks the beginning of our next empowerment chapter as we look forward to Envision Phase II, the implementation of SIOC Community Development Trust’s investment projects and Kumba’s own socio-economic developments. As all three initiatives gain momentum; and, with markets and our operations permitting, we will be able to continue our work empowering our employees, their families and broader community groups.”

Further background:

Kumba’s Broad Based Empowerment Initiative:

When Kumba was established in 2006, the company ensured a 26% black empowerment ownership in Sishen Iron Ore Company through the transfer of a 20% shareholding to BEE company Exxaro Resources, a 3% shareholding to the SIOC Community Development Trust and a further 3% to Envision. Both Envision and SIOC Community Development Trust were created to support Kumba’s empowerment initiatives, the former for employees and the latter for communities around Kumba’s mines.

Kumba’s strong cash flow generation enabled the consistent payment of biannual dividends since 2006, which have resulted in the successful development of both SIOC CDT and Envision.

In November 2006, the iron ore assets of the old Kumba Resources Group were unbundled as the Sishen Iron Ore Company (“SIOC”). Simultaneously, Kumba Iron Ore was listed on the JSE and acquired 74% of SIOC. The remainder of SIOC was acquired by Kumba’s now empowerment partners: Exxaro (20%); The SIOC Community Development Trust (3%); and The Envision Trust (3%), an employee share participation scheme trust (Envision).

SIOC non managerial employees were allocated units that were notionally linked to SIOC shares through which they benefited in the value created in SIOC by way of dividend and capital growth through the Envision scheme. Envision was structured to be a ten year scheme with two 5 year maturities, at which point SIOC shares held by Envision would be swapped for Kumba shares. The Kumba shares would then be distributed to the employee beneficiaries of Envision.

Employees are receiving financial training and guidance with regard to their participation in Envision, dividends and payouts. Tax education has been a focal point of financial training – including how to fill in a tax return. Kumba has also focused on the importance of clearing debts and home ownership in an effort to assist staff in making sustainable financial decisions with their capital payout. Financial training and support is ongoing and will continue for all Envision members old and new in the next phase of the scheme

On November 11 2011 Kumba launched Envision Phase II for permanent employees below the managerial level. This is effectively Phase I “rolled over” for the second five year term and will operate under the same terms as the first.

THABAZIMBI – On Tuesday, 29 November 2011, the long wait for members of Kumba’s Envision employee share participation scheme will be over. On this day the company will announce the audited figures for the substantial cash payout that will be made to all permanent employees below management level just before Christmas.

The announcement will be made at a news conference at Kumba’s head office in Pretoria and Envision members and their families will be able to watch proceedings live on Summit TV from 13:00 on the day.

More than 5 800 employees will share in the payout on or before 17 December – many of them working at Thabazimbi mine. This promises to be a life-changing event for many of them. The members include from cleaners to haul truck drivers to supervisors. Everybody receive the same irrespective of their job level, depending on their years of service. Those who have been with the company for the full five years since listing, will receive the full payout, while those with less service will receive a pro rata amount.

Envision has been described as the most generous broad-based employee share participation scheme in the history of South African mining, with pre-tax payout figures of up to half-a-million Rand per employee been quoted in the media for Envision members who have been with the company for the full five years since listing in 2006. The payout will depend on the company’s share price over a five day period mid November.

Envision is a two part, ten year scheme with two capitalisation dates. The good news is that employees will in five years’ time receive another cash payout, should the company do well over the period.