Anglo American Platinum (Amplats) employees are in the money seat after the mining firm yesterday announced a R1.8 billion new employee share ownership plan (Esop), which will see each qualifying employee receiving shares in the firm worth R8 000 a year.
The plan will be implemented during the fourth quarter of this year.
This is Amplats’s third Esop and will replace the second Esop, which expires this month when the final 2020 allocation vests.
The mining firm, with a market capitalisation of R312 billion, will also see employees participating in the evergreen ownership of 2% of Rustenburg Platinum Mines (RPM), the operating subsidiary of Amplats.
The purchase of these shares would be fully funded by the company, and qualifying employees would be entitled to receive dividends as and when RPM declares a dividend, Amplats explained.
The estimated total value of the employee share allocations over the life of the scheme was about R1.8bn and the estimated day one value of the 2% evergreen shares, based on the 30-day volume-weighted average price of Amplats shares as at September 23, was R6.5bn.
Virginia Tyobeka, the executive head of human resources, said, “As an organisation, we are deeply committed to ensuring that our colleagues can benefit from sustainable livelihoods and are rewarded for the hard work that they do. We will be working hard to ensure that everyone understands how the new scheme will be implemented, and that they are empowered to manage their interest in our company sustainably.”
The Esop would allow permanent employees, excluding executives and other management who already participated in share incentive schemes, to receive shares, thereby benefiting directly from the company’s performance across Amplats’s operations in South Africa and Zimbabwe, both through dividends declared and share price appreciation, it said.
Under the terms of the new Esop, qualifying employees would be allocated Amplats shares, with each tranche vesting three years after allocation. These shares were either allocated from treasury shares or purchased in the market on an annual basis for the purposes of allocating to qualifying employees under the Esop – at an annual cash outflow of roughly R170m.
Once shares have vested, employees would have the option to sell or retain their shares.
Earlier this month, Amplats revised its 2022 refined production guidance lower as quality assurance processes detected sub-standard materials received for the Polokwane smelter rebuild.
The refined production guidance was revised to between 3.7 to 3.9 million platinum group metal (PGM) ounces, from previously between 4.0 to 4.4 million PGM ounces.
Amplats in July declared a gross interim dividend of R21.5 billion despite its interim earnings nearly halving due to operational headwinds and social, geopolitical complexities.
Amplats share price was trading at around R1181.60 in intraday trade, having leapt 241.27% in five years.
BUSINESS REPORT