EMPLOYEE SHARE OWNERSHIP Implats’ board of directors approved providing a loan of about R1.1-billion for the trust to enable it to subscribe for the trust shares
Platinum miner Impala Platinum (Implats) last month established an employee share ownership trust that will benefit about 32 000 qualifying employees at its unlisted subsidiary company, Impala Platinum Limited (Impala).
Implats CFO Brenda Berlin tells Mining Weekly that the newly formed trust has subscribed for new Impala shares comprising 4% of Impala’s share capital.
She points out that Implats’ board of directors approved Implats’ providing a loan of about R1.1-billion for the trust to enable it to subscribe for the trust shares.
Berlin explains that the beneficiaries of the trust will all be Patterson grade A to C level permanent employees of Impala – regardless of trade union affiliation – from time to time working at the Impala Rustenburg North and South mining operations, mineral processing and services, and the refinery, provided they meet the relevant qualification criteria.
“This transaction provides a meaningful way of aligning lower-category employees’ interests with the future profitability of Impala and is viewed by the Implats board as a positive intervention to keep employees motivated and sustain good labour relations,” she states.
Berlin points out that at Implats, the holding company listed on the JSE, the community-based investment company Royal Bafokeng Holdings remains one of the company’s largest shareholders, owning 13.2% of the company’s shares in issue.
“Together with the Morokotso Trust, historically disadvantaged South Africans (HDSAs) own 15% of Implats.
“HDSA equity ownership at Impala is now well above the 26% level, as the holdings at the listed level are all attributable to Impala, in terms of an existing agreement with the Department of Mineral Resources,” she highlights.
Additionally, Berlin notes that employees’ interests are represented by the union through workers committees at each of the geographic locations, each with a chairperson, deputy chairperson and treasurer, who are appointed by the union members.
The trust will have 17 appointed trustees, including three office bearers from each workers committee, and two independent and three Impala-appointed trustees.
Consultation processes to discuss the details pertaining to the transaction and explain the benefits for employees are under way and scheduled to be completed soon. These will take place in, amongst others, the forums agreed upon after the conclusion of the wage settlement, signed on July 23, 2014, between Impala and the Association of Mineworkers and Construction Union.
Berlin says the loan provided by Implats for the trust (for the subscription by the trust of the trust shares) carries no interest and has no final repayment date as this “is entirely dependent on the future profitability of Impala”.
She explains that the loan will be repaid through Impala’s future dividends to which the trust will be entitled as a shareholder in Impala.
Dividends paid from Impala’s future profits will be distributed to the trust.
Sixty-five per cent of the trust’s funds will be paid out to all qualifying beneficiaries under the terms of the trust and 35% of the trust will be paid to Implats to repay the loan.
Following the repayment of the loan in full, qualifying employees will receive 100% of the dividends declared by Impala to the trust and this will endure for the life of the mine and its associated processing and refining operations.
“Impala will cover the costs of operating the trust,” says Berlin.
She also informs Mining Weekly that Implats is attempting to implement a similar employee share ownership trust scheme at its Zimplats subsidiary, in Zimbabwe.
Impala is Implats’ primary operational unit and has mining and processing operations on the Impala lease area near Rustenburg, in the North West, and refining operations in Springs, east of Johannesburg.