Sustainable development

Employees in the workshop at Kumba Iron Ore’s Sishen mine

Kumba Iron Ore’s Sishen mine is one of the world’s largest open pit mines and one of the most significant contributors to the economy of South Africa’s Northern Cape province. In December 2011, employees received a significant pay-out as part of a landmark empowerment deal.

When the company was listed on the Johannesburg Stock Exchange in November 2006, 3% of ownership in the operating company, Sishen Iron Ore Company, was transferred to Envision, a broad-based employee share participation scheme. Employees eligible to join the scheme are those who are not involved in management share schemes, ranging from haul truck operators to permanently employed administration staff. The company’s strong cash flow generation has enabled the consistent payment of an interim and final dividend each year. Since its inception, Envision has paid out $419 million in dividends to more than 6,000 participants.

December 2011 saw the maturing of phase one of the scheme. After repaying debts to Sishen Iron Ore Company for the original purchase of Envision’s 3% stake, the rest of the capital appreciation benefit has been distributed to employees, with the amount depending on the Kumba share price and employees’ length of service. An employee with five years of service received approximately $77,000, before tax.

Our shareholders have approved continuation of the scheme, Envision Phase II. Envision reflects our commitment to promoting broad-based black economic empowerment in South Africa, representing an important partnership with our employees that empowers them to create the future they want, for themselves and their families.