Kumba Iron Ore confirmed that engagement is continuing with the less than 300 employees who embarked on an illegal strike on Wednesday, 3 October 2012, at the company's Sishen Mine in the Northern Cape.

The strikers are demanding a monthly salary increase of ZAR 15 000 for all Kumba employees over and above what they are already earning.

The company's engagement with the strikers is focused on encouraging them to leave the mine property, securing all mining equipment and to resume safe mining operations as soon as possible.

Production was suspended on Thursday, 4 October 2012, when the strikers blocked access to the pit, creating an unsafe environment for mining operations. The company is losing approximately 120,000 tonnes per day of finished product due to the illegal strike. However, Kumba currently estimates that it will have sufficient production from its other mines and stockpiles of finished product at Sishen Mine and Saldanha to continue supplying its customers until mid October. The loading operations at Sishen Mine have also been affected by the illegal strike and therefore not all load-out stations are operating at full capacity.

The strikers are all permanent employees belonging to the Company's recognised unions, but are acting on their own without union representation. Sishen Mine employs approximately 12,700 workers.

Kumba concluded a two-year wage agreement with organised labour two months ago that makes provision for an increase of between 9% and 12% (total cost to Company), which is well above the rate of inflation. Permanent staff below management level also benefit from Envision, an employee share scheme, that paid out ZAR 2.7 billion to 6209 members at its first maturity date in December 2011. Each Envision scheme member who has been employed by the Company since its market listing in 2006 received a pre-tax cash payout of approximately ZAR 570 000 at the time. Envision scheme members also receive dividends twice a year which amounted to ZAR 33 675 (pre-tax) per member in August 2012.

Source - Kumba

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