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Monday, 23 July 2018 03:09

Business Report writes that Tongaat Hulett chief executive Peter Staude’s total remuneration package declined by 39.46 percent in 2018 to R10.11 million as compared to the total package of R16.70m he received in 2017.

Staude was not paid a cash bonus in 2018, whereas in 2017 he received R6.63m in bonuses, according to the group’s annual report published on 6 July 2018.

“No bonuses were paid to the chief executive and chief financial officer in the 2017/18 year due to the headline earnings threshold of R800m not being met,” the group said in the annual report.

The 2018 remuneration packages for executive directors only consist of annual salaries and retirement and medical aid contributions while the 2017 packages included bonuses.

The group added that decisions relating to the remuneration policy and outcomes had been influenced by the various socio-economic dynamics in the countries in which the company operates.

Staude received the same salary of R8.80m in 2018, while chief financial officer Murray Munro’s annual salary was raised to R5.20m in 2018, up by 6.15 percent as compared to R4.88m he received in 2017.  However, Munro’s total package also declined by 29.33 percent to R6m as there was no bonus for the year.  This resulted in his total package declining from R8.49m he received in 2017.  The 2017 package included a bonus of R2.88m.

Together both executive directors took home a total of R16.08m, down from R25.19m in 2017.

The group said the 2018 remuneration packages were approved by the remuneration committee and approved by the board. In the results for the year to end March, the JSE-listed agriculture and agri-processing group said its headline earnings declined by 37.2 percent to R617m, down from R982m reported a year ago.

The group said its headline earnings were negatively impacted by imports, low international sugar prices and a stronger rand.

“The objective of the remuneration philosophy is to align performance of company executives and fair reward with the company’s commercial success and sustainability, simultaneously taking into account various stakeholders’ perspectives and the affordability/cost to company,” the group said.

It has also nine non-executive directors and they collected R6.99m in fees for 2018. The figure was 6.39 percent higher than R6.57m in fees earned in 2017. The group is expecting better results in 2018/19. “Earnings and cash flows are expected to exceed those of the 2017/18 year,” Staude said.

The original of this report by Sandile Mchunu appeared on page 15 of Business Report of 9 July 2018

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Saturday, 21 July 2018 19:06

Mail & Guardian reports that the battle for control of the Association of Mineworkers and Construction Union (Amcu) has shifted to its members’ retirement savings. And Amcu president Joseph Mathunjwa has appointed himself chairperson of the union’s new fund, the Igula Umbrella Provident Fund, despite the trustees electing his deputy, Sanele Myeza, to the position.

Amcu has 250,000 members and represents the majority of workers in the platinum and coal mining sectors. It is the second-biggest union in the gold sector, which is dominated by the National Union of Mineworkers.

But Amcu has been plagued by internal battles over transparency and the apparently dictatorial leadership style of the charismatic Mathunjwa.

Mathunjwa and Myeza have been at odds because of the deputy president’s increasing support in the union and calls for a national congress to elect new leaders.

Last week the Mail & Guardian reported on a purge of Myeza’s supporters from the union, allegedly for expressing their dissatisfaction with Mathunjwa. Since then, another Amcu official in Mpumalanga, Tlou Kwenait, has been dismissed for gross insubordination, which was conveyed in a letter.

At stake is not only the battle for control of the union members’ monthly subscriptions but also their retirement savings reportedly worth more than R7-billion which the union has demanded should be shifted to the Igula fund.

“Without going back to [the Amcu] NEC [national executive committee] for a fresh resolution, Mathunjwa has yet again used his bulldog tactics and appointed himself as chairperson,” one of the trustees of the Igula fund said. “This will not pass the test with the FSCA [Financial Sector Conduct Authority] and is against the rules of the fund.”

The rules state that the chairperson of the Igula fund must be elected from the trustees and Amcu’s submissions to the FSCA show that Mathunjwa is not a trustee — and appointed himself chairperson.

Myeza was elected chairperson of the fund after Amcu seconded its treasurer Jimmy Gama, Myeza and Amcu Limpopo secretary Neo Mangke to serve as the trustees, the records show.

According to the FSCA records, Igula is administered by financial services group Alexander Forbes while EOH is registered as its investment consultant, with EOH managing director of employee benefits Michael Woods listed as its principal officer.

“To date the [Igula] fund has not submitted annual financial statements although it received preliminary registration in 2016,” a former senior executive of the FSCA, who requested anonymity, said this week.

The FSCA requires statements to be submitted every six months.

Amcu’s submissions on the Igula fund to the FSCA also confirm that it has not submitted the statements.

In a 2015 newsletter, Gama explained that the Igula fund was created “as a result of the huge outcry from our members on unpaid benefits from their existing funds”.

“The Igula Umbrella Provident Fund will play a meaningful role in ensuring that members’ benefits are protected and claims paid timeously,” he wrote.

Woods and Mathunjwa share a long history; Woods helped to manage the employee benefits fund of BHP Billiton, now known as South32, when he was general manager of Amadwala group benefits in Witbank, where Mathunjwa was employed.

Amcu’s bid to have its members’ retirement savings moved from investment funds chosen by the mining companies to Igula has been described by gold mining insiders as “one of the most contested discussions” happening at the platinum and gold mines.

The latest gold wage negotiations with AngloGold Ashanti, Harmony Gold, Sibanye-Stillwater and Village Main Reef started last week and are happening simultaneously under the guidance of the Minerals Council, formerly the Chamber of Mines, which represents all the companies.

The council’s spokesperson, Charmane Russell, confirmed that the companies had received a demand to transfer the retirement savings of Amcu members to the union’s new fund but she said this would be negotiated at a company level after the implementation of the wage deal.

The platinum companies received the same demand three years ago but refused to do it because of reservations about Igula’s compliance with the FSCA.

The Labour Court this month dismissed Amcu’s application to force Anglo American Platinum (Amplats) to transfer its members’ savings to Igula.

Judge Andre van Niekerk found that Amplats was duly empowered by its employment contracts to select its preferred retirement funds and Igula had failed to outperform Old Mutual.

Amplats spokesperson Mpumi Sithole said Igula was rated the lowest out of a range of different funds evaluated by external and independent auditors.

“We believe that our employees’ investments are best protected within the context of a well-established and managed umbrella fund.”

Impala Platinum is being equally cautious after the four trustees of its Implats Worker Provident Fund were arrested during a sting operation by the Hawks for soliciting bribes of more than R2-million from a life insurance company in 2016 “for protection”.

The case is continuing but all of Amcu’s shop stewards at the mine have been replaced, said Impala spokesperson Johan Theron.

“There’s been a change on the Amcu side and that has set those processes [to negotiate a transfer to Igula] back somewhat. So there hasn’t been any meaningful progress.

“We have got a worker pension fund we have created with the workers. It is managed by independent fund managers like Allan Gray and Old Mutual,” Theron said.

He said Impala had reservations about the Igula fund.

“As much as we are willing to listen to these good reasons, we are not going to put people’s retirement savings at risk.

“Whatever happens in future will have to follow the letter of the law,” he said.

Former managing director of the Alexander Forbes retirement funds division, Andrew Crawford, described the Igula fund as a case of bad governance.

“It doesn’t meet any standards of corporate governance. The two fundamentals of corporate governance is transparency and a balance of authority, which it doesn’t have,” Crawford said.

Amcu did not respond to questions about the Igula fund and its trustees or to questions about the leadership tussle between Mathunjwa and Myeza.

“We are not going to put people’s retirement savings at risk”

This report by Govan Whittles appeared on page 8 of Mail & Guardian of 20 July 2018

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Thursday, 19 July 2018 13:42

BL Premium writes that the state of SA’s gold mining industry is worse than first thought, with fewer than 20% of gold mines making money at prevailing prices — while large job cuts are forecast in coming years, following decades of steeply falling employment.

Data from the Minerals Council SA (formerly the Chamber of Mines), released as wage talks in the sector have kicked off, show that 80% of SA’s gold mines, once the powerhouse of the country’s economy and global gold industry, are unprofitable at prevailing gold prices of about R520,000/kg.

"Looking at the ‘spot price of gold’ and the ‘spot all-in costs’ [cash costs, sustaining capital and new investment costs], we think that over 80% of companies are not covering their costs at today’s gold price," said Henk Langenhoven, the council’s chief economist, adding "very few companies sell [at] spot prices".

Gideon du Plessis, the general secretary of trade union Solidarity, pointed out that the Minerals Council had as usual opened wage talks by painting a gloomy picture of the industry to motivate for the lowest possible wage increase.

"In keeping with the tradition of the past few decades, mine houses involved in the gold sector negotiations presented a gloomy picture of the sector’s poor performance and weak prospects in their respective presentations," Du Plessis said.

Major crisis in the sector

However, it is not just the council flagging a major crisis in the sector. Analysts have warned that costs are simply too high for SA’s ageing deep-level, labour-intensive mines, where falling grades, mined volumes and productivity have contributed to employment dropping more than two-thirds to 111,800 from 392,000 in 1994.

The country’s gold output could halve within five years from the 140 tonnes it generated in 2017, said Nedbank gold analyst Leon Esterhuizen.

According to his calculations, just six out of SA’s 26 gold mines were making money, with the gold price so far in 2018 averaging R522,460/kg.

"Only four of those six are comfortable," he said.

"I think this industry is done. Some people will say that’s nonsense and a weak rand will save us. Not even a weaker rand will save us. Look at the gold rally in 2001 to 2011 when the rand weakened over much of that time, we produced a helluva lot less gold," he said. He said gold mines were targeting higher-grade areas to try to keep afloat, while wages and electricity costs kept increasing at above consumer price index numbers.

"The drop in productivity is a function of the companies cutting back volumes faster than people, which is an indication you will see significant numbers of people retrenched in the next couple of years."

The National Union of Mineworkers (NUM), the dominant of the four unions representing nearly 80,000 workers in the talks, said the council’s offer of up to R550 per month for miners and up to 4.5% wage increases for artisans and others was "not even close to what our members are demanding".

Sibanye-Stillwater, AngloGold Ashanti, Harmony and Village Main Reef started wage talks a week ago to set a fresh two-year wage deal.

The opening demands from the two biggest unions — NUM, with 51% representation of the 79,517 employees at the four companies, and the Association of Mineworkers and Construction Union (Amcu), with 34% — did not reflect an awareness of the difficulties the companies said they faced. Among a long list of demands, NUM is demanding that basic entry-level wages be increased 33% to R10,500 a month from R7,785. Amcu, with its usual demand of R12,500 a month, put its demand at 58% above prevailing wages.

With labour costs making up 53% of gold mining costs, an increase of those proportions, combined with the costs of the other demands, would force marginal mines out of business and lead to large job losses.

This report by Allan Seccombe was originally published at BL Premium (paywall access)

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Thursday, 19 July 2018 12:32

The Citizen reports that the ANC moved fast to axe an employee at its headquarters, Luthuli House in Johannesburg, after news broke on Wednesday of his arrest during a cash-in transit heist blitz on July 6 and 7.

“The allegations that led to Errol Velile Present’s arrest and the charges against him are of such a serious nature that the party had to exercise rules provided for in the ANC personnel manual, terminating his service with immediate effect,” ANC spokesperson Pule Mabe said yesterday.

Present has worked for the ANC for more than 10 years.  He has also been involved in a land scandal. It is alleged he was given a R97 million farm (Bekendvlei in Limpopo) after meeting then deputy director-general in the department of rural development and land reform, Vusi Mahlangu.

Mahlangu is now working for Public Protector Busisiwe Mkhwebane after former minister of rural development Gugile Nkwinti fired him.

Joburg mayor Herman Mashaba yesterday said he had been informed of four arrests of people allegedly involved in a cash-intransit heist in Dobsonville.

“The raid was conducted by the [Johannesburg Metro Police Department’s] K9 Narcotics Unit and the SA Police Service. Four hijacked vehicles were recovered, two of which were used in the robbery,” Mashaba said.  “News of this arrest comes as a shock, given the recent spate of cash-in-transit heists in Gauteng, that pose a threat to the lives of motorists and pedestrians.”

Mashaba said millions of rands had been stolen and only a small amount of that recovered.  “The arrest of this individual does bring into question whether the ANC had been aware of it and, if so, why they remained silent about such an important matter.  It also begs the question of how the ANC, while running government, can employ individuals who so brazenly undermine public safety and the rule of law.”

News of the arrest came as a shock to many, anticrime activist Yusuf Abramjee said yesterday.  “I think the mayor needs to be complimented for making this fact public.  Also, I see the ANC has issued Present with a summary dismissal, which also needs to be welcomed.  That we have seen police officials, even soldiers, arrested before shows how widespread cash-in-transit robberies are.  I know people are saying the ANC was probably protecting the guy, but I think that’s unfair.  In the absence of any facts that should be condemned; you can’t blame the party if an individual in it was responsible for doing something to possibly make money,” Abramjee said.

The original of this report by Amanda Watson appeared on page 2 of The Citizen of 19 July 2018

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Tuesday, 17 July 2018 14:51

The Sunday Independent reports that the community of GaMolekana in Limpopo has accused Mogalakwena Mine of holding back young people who matriculated with maths and physical sciences by not doing enough to empower them with skills. The community says the mine is taking promising students and making them drive trucks instead of training them to become engineers.

“People who obtained good marks are made to drive trucks while we expected to be engineers,” says Esrom Masenya.

The move has left others wondering what kind of jobs they will be able to do in the mine if those with such qualifications are drivers.

Sello Mashalla, who has been applying for a job for a number of years, says he was afraid that he would never get employed.

“Time is not on my side. I’m getting old and they are not hiring us. There are people with drivers licences but they are not hired to be drivers because we are told they want people who passed matric with maths and science. We always thought that such requirements are for engineering jobs,” he says.

Mine spokesperson Mpumi Sithole has defended the move, insisting that the minimum entry requirement for a truck driver at Anglo American Platinum’s Mogalakwena Mine is matric, preferably with maths and science.

“To ensure the highest level of safety, our trucks are installed with electronic devices.

“However, these trucks still require an operator who is expected to interpret situations and act swiftly. With continued technological advancements our current operators will have to be reskilled and retrained,” she says.

Sithole adds that they are not only restricting them from driving but encouraging them to further their studies and acquire the skills required in the workplace.

“Our operators are encouraged to further advance their skills through a number of mining and engineering courses. These can be facilitated by our Training & Development department, through external institutions, or through our very own Engineering Skills Training Centre.”

Another issue of contention for the community is the lack of transformation in the mine. They claim the majority of managers are white and there is no one from the local villages in a managerial position.

In response, Sithole says employment equity at the mine is currently at 40% historically disadvantaged South Africans, with 23% women. She failed to answer the question relating to how many of those in management were locals.

The original of this report by Karabo Ngoepe appeared on page 7 of The Sunday Independent of 8 July 2018

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