Media releases

New Blyvoor profit share scheme means lowest paid workers can earn up to 55% more

Details

Published: Tuesday, 12 March 2002 02:00

Durban Roodepoort Deep, Limited has announced a new profit sharing scheme at its Blyvooruitzicht Mine near Carletonville that will give the mine’s lowest paid workers the opportunity to boost their earnings by 55%.

“At wage negotiations last year we committed ourselves to improving the circumstances of ordinary workers by giving them a stake in the fruits of their labour,” said DRD Chairman and Chief Executive Officer Mark Wellesley-Wood.

“This innovative scheme differs from its predecessors in DRD and from most others in the industry in that it factors in gold production, costs, gold price and resultant profit against budget.”

The scheme, which will be phased in over four months from the beginning of March 2002, will benefit more than 3 600 of the mine’s employees in job categories 3 to 16. Each can earn up to R705 a month more, depending on the profit achieved by the mine.

The lowest paid workers, currently earning R1 295 a month, stand to benefit most. A primary motivation for the scheme, which has taken some months to develop and pilot, was to give those earning the minimum an opportunity to reach the R2 000 a month level.

In terms of the scheme, profit achieved will be calculated by multiplying the ounces of gold produced by the gold price, then subtracting costs. Employees’ profit share will be calculated by subtracting budgeted profit from profit achieved.

“Budgeted profit will be based on realistic gold production, gold price, cost and shareholder return on investment levels,” says Blyvoor’s Mine Manager, Deon van der Mescht.

“Transparency will be critical to the scheme’s success, so financial information will be shared monthly with a monitoring committee comprising of management, union and association representatives. The committee will be involved in implementing the scheme and keeping employees informed about it.”

Blyvoor, which faced closure little more than two years ago, is now well into an extensive expansion programme which could give the mine between 12 and 18 more years of life.

“We would have liked to have implemented the profit sharing scheme sooner but were held back by the capital demands of the expansion programme,” Wellesley-Wood said.

“Now that the expansion programme is under way, we are able to offer our employees greater job security and a share of the rewards that, going forward, could see them exceeding the rest of their industry counterparts in terms of take-home pay.”

The new profit sharing scheme will be in addition to – not instead of – Blyvoor’s current production bonus schemes. In terms of the production bonus schemes, underground production team members can significantly increase their wages by face advance achievement. Members of highest achieving teams earn up to R600 a month more.

Queries:

James Duncan
Russell & Associates
27 11 880 3924 (work)
27 82 892 8052 (cell)