JOHANNESBURG (miningweekly.com) – Black Mountain Mining (BMM), a subsidiary of LSE-listed Vedanta’s Zinc International business, has established a seven-year employee share ownership plan (Esop), with 6% of BMM’s shares issued to an employee-held trust on April 1.

The Esop was established following talks with the National Union of Mineworkers.

The Voorspoed Trust comprises three union-appointed trustees, one BMM representative trustee and an independent trustee. Half of the shares were acquired by the trust through a contribution from BMM and at no cost to employees.

The acquisition of the other half of the shares was funded through a three-year interest-free notional loan provided by BMM. After the three years, the loan will be subject to a notional interest charge of 9.25% until the expiry of the Esop.

The trust will hold the shares on behalf of qualifying employees – current and future – who will be allocated trust participation units. Awards of participation units to future employees will be proportionally lower than those of existing employees, and be based on the year of joining the company.

Qualifying employees are all current and future permanent foremen, supervisors, artisans and operators of BMM’s South African operations.

Currently, there are 702 employees in these categories. A yearly guaranteed dividend payment of R3 500 will be made to the beneficiaries of the trust for the duration of the plan.

In year five, half of the BMM shares held by the trust may vest and a payout may be due to beneficiaries. However, the trustees and the company may, in consultation, decide to postpone vesting of the shares owned by the trust that are subject to the notional loan if it is determined to be in participants’ best interests.

In year seven, all the shares will vest and any value of remaining shares will be paid out to the participants.