Cape Town - Black Mountain Mining on Friday announced the establishment of a seven-year employee share ownership plan, the terms of which have been reached through consultation between mine management and the National Union of Mineworkers (NUM).
Black Mountain is an underground operation in Northern Cape with a permanent workforce of 1600 (800 direct and 800 contractors) that mines zinc, lead, silver and copper deposits, hoisting 1.7million tons of ore a year with production capacity of 90000 tons per annum metal in concentrate.
The mine is operated by London-listed diversified global natural resources company, Vedanta Zinc International.
Black Mountain said the employee share ownership plan would be overseen by a trust, known as the Voorspoed Trust, comprising three union-appointed trustees, one Black Mountain representative trustee and an independent trustee. Six percent of Black Mountain shares were issued to the trust on April 1.
No cost
Half of these shares were acquired by the trust through a contribution from the company and at no cost to employees.
The other half were funded through a notional loan provided by the company.
The amount of the notional loan will not be subject to any interest charge for the first three years, and would thereafter be subject to a notional interest charge of 9.25 percent until the expiry of the employee share ownership plan.
Black Mountain said the trust would hold the shares on behalf of qualifying employees - current and future - who would be allocated trust participation units.
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Awards of participation units to future employees would be proportionally lower than those of existing employees, based on their year of joining the company.
Qualifying employees are all current and future permanent foremen, supervisors, artisans and operators of Black Mountain’s South African operations.
Dividend
Black Mountain said there are 702 employees in these categories currently.
An annual guaranteed dividend payment of R3 500 net of tax would be made to the beneficiaries of the trust for the duration of the plan. Vedanta Zinc chief executive, Deshnee Naidoo, said they were excited about the employee share ownership plan.
“It not only recognises the importance of our employees who sustain our business, it is a practical way for us to lift Vedanta’s values with employees being financially rewarded for their contributions to their operation’s success,” Naidoo said.
Andre Trytsman, general manager of Black Mountain, said: “We are committed to sharing Black Mountain’s potential prosperity with those who contribute to its success - our employees.” NUM branch chairperson at Black Mountain, Darryl Crew, described the plan as “a positive step”. “If Black Mountain performs well and grows, employees who own participation units will share financially in this success,” Crew said.