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The recently gazetted Mining Charter, which makes provision for mining companies to issue 8% of their shares to employees, will no doubt be warmly welcomed by the industry’s more than 300,000 beneficiaries of employee share ownership plans (Esops). It is a significant improvement on the current levels of employee shareholding ranging from 1% to 3%, but it will not necessarily translate into better payouts than the disappointing average of below R5,000 received by beneficiaries when their shares matured. It matters how the schemes are put together. Will it be free shares or loan shares? Or, as is predominantly the case, will 60% of the shares constitute a loan payable at a prime interest rate and 40% a free component? Or, as with the Gold Fields and Sibanye trusts, would employees be entitled to shares only after 15 years? Unless the values of the schemes are protected from the vagaries of the market, the charter’s provision to allocate 8% of mining company shares to employees won’t ...

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