Vedanta Resources
Black Mountain Mining has established an employee share ownership plan through consultation between mine management and the National Union of Mineworkers.

Black Mountain Mining is operated by Vedanta Zinc International. The employee share ownership plan (ESOP) will be overseen by a trust, known as the Voorspoed Trust, comprising three union-appointed trustees, one Black Mountain Mining representative trustee and an independent trustee.

The ESOP will be in place for a seven year period effective from 1 April 2017.

[quote]A total of 6% of Black Mountain Mining shares were issued to the trust on 1 April 2017. Half of these shares were acquired by the trust through a contribution from the company and at no cost to employees.

The other half was funded through a notional loan provided by the company.

The amount of the notional loan will not be subject to any interest charge for the first three years, and will thereafter 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, based on their year of joining the company.

Qualifying employees are all current and future permanent foremen, supervisors, artisans and operators of Black Mountain Mining’s South African operations. There are 702 employees in these categories.

An annual 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 Black Mountain Mining shares held by the trust may vest and a pay-out 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.

In both instances, any pay-out values will depend on the value of Black Mountain Mining’s shares held by the trust at that time, less any trust expenses.

Because Black Mountain is not a listed company, the value of the company and of the shares held by the trust, will be determined at required points by an independent valuer.

“I am excited about the ESOP. It not only recognises the importance of our employees who sustain our business, it is a practical way for us to live Vedanta’s values with employees being financially rewarded for their contributions to their operation’s success,” says Vedanta Zinc International CEO, Deshnee Naidoo.

“We are committed to sharing Black Mountain Mining’s potential prosperity with those who contribute to its success – our employees,” states GM of Black Mountain Mining, Andre Trytsman.

NUM BMM branch chairperson, Darryl Crew, described the plan as: “a positive step … if Black Mountain Mining performs well and grows, employees who own participation units will share financially in this success.”

Feature image credit: Vendanta Zinc International