The union has spoken out against the retrenchments, which may affect 1,600 workers.
Kumba Iron Ore has issued retrenchment notices that could affect 1,600 employees, in a process that trade union Solidarity says could result in 653 job losses.
Solidarity’s deputy general secretary for mining, agriculture and chemical industry, Riaan Visser, said Kumba’s reasons for the retrenchments were baseless in light of the company’s solid financial performance in 2020.
“It is unfair and simply insensitive of Kumba to punish workers amid a pandemic and an excellent financial performance with increased turnover, profits and dividend declared,” Riaan said. Saying that employees had worked throughout the Covid-19 pandemic crisis, he added: “We understand that there are industries that are suffering terribly at the moment. However, it makes it that much worse when a mining giant such as Kumba wants to retrench employees after an excellent financial year.
In February, Kumba, which owns the Sishen and Kolomela mines in the Northern Cape, delivered record earnings and dividends during the 12 months to the end of December on the back of 19 percent higher iron ore prices to $115 (about R1,765) a ton.
On 5 March, Kumba Spokesperson Sinah Phochana confirmed that the company had initiated a targeted consultation process with the employees who might be affected.
Sinah said the group had been on a business transformation journey in recent years: “Our transformation journey includes deploying breakthrough technologies and new ways of working to become safer, cleaner, more productive and more competitive on the global stage, while driving demand for our quality ore. It also includes a targeted organisational restructure to ensure that the right work is done at the right time, in the right way, by capable people in roles that are designed with clear accountabilities and authorities.”
In the year to the end of December, Kumba, a subsidiary of Anglo American delivered R20.7 billion of free cash flow, which supported the board’s decision to declare a final cash dividend of R41.30 a share.
Combined with the interim cash dividend of R19.60 a share, the total cash dividend for the year increased by 30 percent to R60.90 a share, representing a payout ratio of 86 percent of headline earnings.
