Mining giant gives workers 5% share of the company

The look on their faces said it all. You would smile from ear to ear too if you were told you own 5% of a mine in a country where mining giants are accused of shipping away all their profits, leaving local communities, who labour away to bring the minerals to surface, wallowing in poverty.

That's why nothing, not even the blistering sun, could damp the spirits of hundreds of workers and communities gathered at Kangra coal mine in Mpumalanga on Thursday waiting for the kind of news many in similar mining communities would kill for: owning a part of the mine.

And when investment company Menar's chairperson Mpumelelo Mkhabela announced that workers and the community would each get 5% in the Kangra mine, wild celebrations gripped the scene.

In what is going to be a game changer in South African mining, Kangra made history when it allocated free-carry shares to mineworkers and three local communities, barely three months after Menar started operating the mine, which they bought last year through its subsidiary, Canyon Coal. They took over operations in December. The mine was established in 1957.

Workers were given a day off to be part of the celebration with the mine managers and local community members.

Since Mineral Resources Minister Gwede Mantashe announced the revised mining charter, mining companies have been up in arms for various reasons.

Not Kangra. They didn't wait for the government to implement Mining Charter III before it could give the workers and the community a share of the business. The mine becomes the first to give workers and locals shares as required by the charter.

For Kangra, last week was a “New Beginning”, as the event on Thursday at the mine, located in the Mkhondo Municipality just outside Piet Retief, was themed.

Mantashe couldn't make the event due to other commitments, but several high-profile leaders were there, including traditional leaders and Mkhondo mayor Vusi Motha, whose keynote address urged communities not to destroy property, block roads or cause mayhem. Rather, he said, they should use community structures to raise concerns.

The mine must also act swiftly when there are concerns, he added, saying they should not wait until the issues spill into ugly confrontation with the communities.

“We must not scare investors off. The new owners must be given the opportunity to prove themselves. Let's work with them and let's contribute to stability in our communities,” Motha urged.

The highlight of the day was when Menar boss Vuslat Bayoglu, known as Vusi to some, presented symbolic certificates to a workers' representative, Isaac Mbonani, from the National Union of Mineworkers and to traditional leaders.

The shares will be held under separate trusts.

“In the next few months, the legal process to give effect to the allocation will be concluded, but we thought we should make our intentions firmly clear right from the start so that you can assess us against our undertaking,” announced Bayoglu.

He said the ceremony was a practical expression of inclusive growth, one of South Africa's noble socio-economic aspirations. “We are changing the narrative for the mutual benefit of all stakeholders,” he said

Other speakers lauded the initiative, saying it laid the foundation for the redefinition of the relationship between workers, the community and the new mine owners.

Mkhabela said the share allocation to employees and the community was different to the usual employee share-ownership schemes, wgere shares were granted for a limited period.

“This is a permanent arrangement. For as long as you work at Kangra, you will own shares. If the company makes profits and dividends are declared, you will also benefit from dividends that will accrue to the employee trust,” Mkhabela said.

Canyon director Dr Sakhile Ngcobo provided a broad overview of Kangra's operations, explaining that the company was involved in the mining and processing of thermal coal, through the operation of an underground mine, along with several opencast pits, located in the Mpumalanga coalfields.

Kangra currently produces about 2 million tons a year of saleable coal, with the majority of its high volatile coal sold on the export market and the rest to independent users.

Menar social licensing manager Xolile Mankayi emphasised that Menar greatly valued its relationship with local communities and organised labour, and was committed to uplifting the communities in which its mines operated.

“At Kangra we are working on creating a model that can be used for fruitful engagement with workers, community leaders, local municipalities and traditional authorities. We are excited that we will be working with all stakeholders to develop a model that will be beneficial to all parties.”

He outlined key principles that should anchor better understanding among all stakeholders. These included trust and the need to build professional relationships.

The importance of mutual understanding was also echoed by Mbonani, who thanked Menar for giving shares to workers and the company's willingness to address the concerns of the employees, who had staged a protest earlier and handed over a memorandum to Bayoglu and his executive.

“We welcome the new beginning of Kangra and we hope the new shareholders will keep their promise,” Mbonani said.

The company promised to make sure it deals with the issues raised by the community, including concerns around transformation at the top, and would set employment equity targets at management level and review these regularly.

The mine also vowed to put locals first when it employs staff. It would also offer training and skills to them.

The mine also committed to give preference to historically disadvantaged companies in the procurement of capital goods, services and consumables.

Menar Holding