IRON AND STEEL
Kumba Iron Ore's post bonus legacy
Has the South African iron ore miner created expectations of unattainable heights with its enormous ca US$65,000 distribution to the bulk of its employees last December?
Posted: Saturday , 05 May 2012
JOHANNESBURG (Mineweb) -
With Anglo American group member Kumba Iron Ore's massive R2.7bn (US$345 m) pay out to employees last year the iron ore miner not only set an exceptionally high benchmark for itself but also a widely unattainable example for the wider South African mining industry to follow.
Union representatives liberally wield the precedent set as a stick to bend non-conforming companies into shape and many anecdotes have arisen on the traffic jams that have arisen around Kumba's Sishen and Kolomela mines in the Northern Cape due to all the newly acquired cars.
With this in mind we thought it fitting to ask Kumba's CEO, Chris Griffith, on how things are going after the hefty payment that saw many of the 6,000 employees receiving over half a million rand (ca$65,000) before tax in December.
The CEO was pragmatic on the matter and likened the company's performance to summiting a peak.
"Can you always be on top of the peak? Probably not. Can everyone get to the top of Everest? Probably not. Can we always expect that number, of course we can't" said Griffith.
Griffith said that there is an increasing realisation and push for employees in companies to benefit more than they had done so in the past and was particularly chuffed if the miner had played a role in starting a trend.
There was a caveat however: "the numbers will fluctuate and the mining industry is in itself fluctuating .Sometimes it will be up, sometimes it will be below but the fact is that when people benefit in both dividends and periodic payouts we think it is a great story" said the CEO.
On the anecdotes surrounding the traffic jams and the concern that people were wasting their money Griffith was indignant:
"If I ask you if your car is a waste, no seriously, why should it be different for a guy who is in Sishen or Kolomela. The fact is if a guy has never had a car before and all of a sudden he's got a car it means that his standard of living has improved which is great. Why should it just be for us in Jo'burg or Centurion and not for a guy at Kolomela?"
Griffith believes that for every person that bought a car there are many more stories of people who reduced debt and invested in their homes or education.