* FY diluted headline EPS 48.02 rand vs 38.76 year earlier
* Company had flagged to market it expected 46.60-49.00 rand
* Says no significant stoppages in 2013
* To pay total div of 40.04 rand/shr vs year ago 31.7
* Shares down 0.4 percent
By Olivia Kumwenda-Mtambo and Ed Stoddard
JOHANNESBURG, Feb 11 South Africa's Kumba Iron
Ore On Tuesday hailed the vastly improved labour
relations it had achieved since suffering a crippling and
violent illegal strike in 2012, setting an example for the
country's turbulent mining sector.
Reporting a 24 percent rise in underlying full-year
earnings, Africa's top iron ore producer highlighted its
recovery from the wave of illegal strikes, rooted in a bruising
union turf war, which swept South Africa's mining sector in
Kumba said it had worked hard to improve the labour
environment at its operations, centred in the remote and
sparsely populated Northern Cape province.
"In Kumba, 2013 saw improved relations with no significant
work stoppages, quite different from 2012 when we had a serious
unprotected strike at Sishen mine," the company said.
"This was achieved by significantly improving communication
with our employees and instituting a number of post-strike
studies and remedial actions," it added.
Kumba is a unit of Anglo American and is the biggest
contributor to the latter's profits, making it a stand-out in
the global mining group's troubled portfolio in the southern
African region, which includes the world's top platinum producer
Anglo American Platinum (Amplats).
Amplats is still reeling from an almost three-week strike in
the platinum sector by the hardline Association of Mineworkers
and Construction Union (AMCU), which has poached tens of
thousands of members from the once-unrivalled National Union of
Mineworkers (NUM) in the labour conflict.
Amplats also faced a number of brief strikes last year as
AMCU protested against planned job cuts.
Kumba Chief Executive Norman Mbazima said on a conference
call with journalists that in 2012 the company had been caught
up "in the contagion of what happened elsewhere", but had since
gone to great pains to explain to the workforce the "advantages
of working for Kumba".
SKILLS, SCHEMES AND PAY
The company struggled to recover from the strike fallout
during the first part of the year and the tense labour situation
on the ground and Mbazima said in the first quarter of the year
"we were working at about 70 percent of our normal operations."
A share ownership scheme that paid out in late 2011 brought
windfalls of close to $70,000 for more than 6,000 workers at
Kumba, some of whom at the time were earning only a few hundred
dollars a month in basic wages.
That may have provoked resentment from those excluded
because of when they joined the company, but it has helped curb
the tide of labour militancy.
Mbazima said the NUM represented about 47 percent of its
labour force while the Solidarity trade union, comprised mostly
of skilled workers and with a reputation for moderation, had 20
He said AMCU only represented around 5 percent of its
workers now and was in the process of securing a recognition
agreement with the company but still fell short of the threshold
needed for bargaining rights.
This makes for a big contrast with the deep-level gold and
platinum mines, where AMCU has made its inroads among a migrant
rural labour force that is largely unskilled or semi-skilled.
"We are very mechanised and so the level of skills we need
to employ even at the lower levels are significantly higher than
in the underground industry. As a result are pay levels are much
different and much higher," Mbazima said.
The company also said earnings had been boosted by higher
export prices and a weaker rand.
Diluted headline earnings per share for the year to
end-December rose to 48.02 rand from 38.76 a year earlier. The
company had flagged to the market that it expected a number
between 46.60 rand and 49.00.
Headline EPS, the main measure of profit in South Africa,
excludes certain one-time items.
Kumba also said it had been granted a crucial mining right
for rail properties needed for the expansion of its key Sishen
mine. Mbazima told Reuters last week in Cape Town it was
expected by June.
Total production reached 42.4 million tonnes for the year,
down 2 percent from the prior year due to output shortfalls at
The company, whose shares were little changed, down 0.4
percent by 1017 GMT, said it would pay a final dividend of 19.94
rand per share, bringing the total for the year to 40.04 rand
against 31.7 the year before.