Dec 02, 2011
DURBAN|GABORONE|London|Engineering News|Mining Weekly|Botswana|Canada|China|India|Saudi Arabia|South Africa|Christmas|Diamond Giant|Financial Services|Mining|Gillian De Gouveia|Martin Creamer|Engineering News
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De Gouveia: Some very interesting news coming through, good news for some 6 200 iron-ore workers.
Creamer: I call it the pretty face of black-economic empowerment. It has come shining through for 6 209 iron-ore workers who have become half-millionaires over night.
This is thanks to Kumba Iron Ore. Five years ago they gave share options to their workers, everybody below management from the cleaners to the tea makers and across the board, they offered these shares. It was only 3% of the company, which looks a very meagre amount, but that 3% over 5 years has become worth nearly R3-billion.
They have seen a magnificent uplift in the value of the shares and they have also been getting their dividends along the way.
Now this first ESOP as they call it, which is an employee share ownership plan, has matured. So, before Christmas you will have 6 209 shareholder workers from Kumba Iron Ore becoming half-millionaires pre-tax.
De Gouveia: That is the kind of bonus we are talking just ahead of Christmas. They certainly are leading the way setting quite a high bar if one can put it that way for other companies.
Creamer: We hear of CEOs and top management and MDs getting these share options, that is why a guy becomes a CEO, he wants those share options. You don’t hear of workers getting share options.
Just look at what it has done for this company, their productivity is huge, their unions have backed this all the way. It is from the ordinary workers share in this without any discrimination and you see that it has set an example for the world.
De Gouveia: Certainly is good and I’m sure they are all going to be have a fantastic Christmas.
Creamer: In Southern Africa, we just look across the border and we see Botswana as a diamond giant, almost what Saudi Arabia is to oil, Botswana is to diamonds.
You think that they are going to dominate this without a fight, because they are up at 27% of the world diamonds by value. You start forgetting about other countries, where there is also a lot of diamond mining. I must say that Canada is popping up very sharply.
There is a lot of new diamond mines coming up there. They are not only saying that they are going to diamond mine, they are starting to go through the rhetoric that Botswana has taken a long time to go through.
Botswana is now saying that it wants to cut and polish, make jewellery, wants to have financial services and all the other aspects of diamond aggregations that people come to Botswana and Gaborone to select their diamonds.
Canada is now talking the exact same language that they also want to do this. You say to them but how are you going to compete on the cutting side with countries like China and India. The advantage of China and India is slipping away very fast because of technology.
The new technology that is coming through enables people to do it at a very high level. Because the wage inflation is rising dramatically in India and China and wage inflation is very low in Canada, it is becoming a different story.
I think Botswana, when they muscled De Beers into taking the centre of gravity of diamonds from London and putting it in Gaborone – and they succeeded in doing it and that process is taking place – I hope they never got the idea that they have got a monopoly there.
De Gouveia: There is nothing quite like good competition to motivate people to work harder.
Creamer: Yes, lets hope they do.
De Gouveia: COP 17 dominating headlines this week and some interesting news coming through that the South African Weather Service has now got a dual job – it must now also blow the whistle on air pollution transgression.
Creamer: This is very interesting. The new legislation that is coming through, the South African Weather Service Amendment Bill, which has been Gazetted, adds a new weapon to the arsenal of the services and gives them a new job.
They become pollution watchdogs. It is coming just at the COP 17 time and we see that one of their phases, and they are going to go through various phases of this monitoring process, the first phase is to actually set the building blocks in place and get all the legislative framework right. Part of the second phase is actually to also deal with not only the normal air pollution, but also the greenhouse gasses that they are talking about in Durban, the carbon dioxide emissions.
They are over time going to take over the role – we have got 94 monitoring stations around the country and we build new ones quite regularly – they are in the process now of taking over these air quality monitoring stations around the country from the Department of Environmental Affairs.
They are working with them on this new issue where almost in real time in the third phase, they will move towards a real time monitoring of air pollution and greenhouse gas emissions, so that they can actually see in real time what is happening and if these people transgress then you can move much faster.
We see that the whole idea is to improve South Africa’s situation with regards to clean air and environment. Interestingly you see them also setting up now these air quality monitors being built in Limpopo province.
You know, Mpumalanga is the pollution hot spot at the moment, everything from greenhouse gas emissions to Nox and Sox and nitrogen oxides and sulphides coming into the air, but it is going to happen one in Limpopo, because we see the big Medupi power station going up there and talk of other coal-fired power stations.
This is being prepared through new legislation coming through Parliament now where the South African Weather Service won’t only just forecast weather, but they will also forecast pollution.
De Gouveia: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back with us at the same time next week.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines
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