Dual-listed Orion Minerals has announced the registration of community and employees trusts, which are part of the Prieska Project’s ownership structure and are registered by the Master of the High Court in South Africa.
This formal recognition of the trusts as vehicles for community and employee ownership structures at Prieska ensures that the community and employees will always be the beneficiaries of 5% of future dividends remitted by the owners of the Prieska Mine.
The Prieska Mine in South Africa’s Northern Cape province is owned by an Orion subsidiary. The community and employees also have full proportionate shareholder voting rights in the affairs of the subsidiary.
Orion Minerals CEO Errol Smart says the company recognises the challenges in South Africa with establishing and operating these trusts and ensuring a transparent governance framework that ensures that no faction of the community can misappropriate or misdirect the share in future mine profits.
“We have engaged with top legal and commercial advisors to ensure that independent, external trustees have an oversight role and ensure that no trustee or element of the community gets preferential treatment. We also want to ensure that the earnings of the trust are maximised for maximum sustainable impact within the community and to benefit the most vulnerable of its historically disadvantaged members,” says Smart.
The registration of the trusts is a significant milestone in the establishment of the Prieska Project in that it paves the way for Orion to achieve full compliance with Mining Charter III, well in advance of the legal requirement for junior mining companies to do so.
“While the 2018 Mining Charter allows Orion five years to establish community and employee ownership structures, our wish is to forge a strong relationship with our community and employees right at the outset and engage meaningfully with these key stakeholders as equity partners with full voting rights. This has motivated the establishment of fully compliant ownership structures well in advance of the legal requirements,” says Smart.
The trusts will become equity owners in the mine, which is planned to be developed at the Prieska Project, following completion of the bankable feasibility study (BFS) to be delivered this month. The equity ownership costs and contributions on behalf of these trusts, will be recovered from future cash-flows of the mine. The shares to be issued to these trusts will be non-transferable, therefore protecting the trust beneficiaries from any risk of being disowned.
The community trust will be administered by a board of trustees comprising independent professional trustees, elected community representatives and an Orion single company representative, and will be advised by a Stakeholder Engagement Forum.
The stakeholder engagement forum will ensure that the interests of the community and other stakeholders are tabled and considered in the business affairs of the company and the mine. The forum will also provide a structured channel for continued communication of mine and project progress by mine management.
Orion has completed a four-month process of community engagement, which included holding six well-attended public meetings in all the residential areas of the Siyathemba Municipality. This culminated in the election of the 10 community members on the forum, who will represent interests selected by the community as being of significant local importance, namely education, social development, unemployed, skilled elders, sports and recreation, safety and security, religious groups and business.