SAIMM Breakfast

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IDC Sandown, Sandton

Local is Lekker: Creating capacity and capability for mining companies to buy local


The Southern African Institute of Mining and Metallurgy (SAIMM) in collaboration with the Mining Equipment Manufacturers of South Africa (MEMSA), the South African Mineral Processing Equipment Cluster (SAMPEC) as well as the Mandela Mining Precinct held a breakfast discussion on February 14, 2019. The discussion was on “How mining companies can meet the supply chain requirements of the Mining Charter?” The Competence Centre for Mining and Mineral Resources from the Southern African-German Chamber of Commerce and Industry attended the discussion. Other attendees included members of MEMSA and SAMPEC, representatives from the Minerals Council, mining companies, The Department of Mineral Resources and the Department of Trade and Industry.

One of the key aspects of the Mining Charter is the 60% local content requirement on all non-services procurement spend by mining companies within a period of 5 years. Emanating from this requirement are the challenges of a single coding system for mining inputs product categories, the verification process for local content and South Africa’s local manufacturing capacity to meet the local content requirements for the future procurement demands of mining companies. The major themes of the discussions centred around these challenges and possible solutions to these challenges. Speakers from SAIMM, MEMSA, SAMPEC and the Mandela Mining precincts gave presentations and this was followed by a question and answer session.

The major conclusion from the discussion was that a cloud based product coding system should be established and used by mining companies. The general view was that South Africa has the potential to develop enough manufacturing capacity to meet the mining companies’ future demand and that the mining charter is positive and presents an opportunity to Industrialize South Africa. From a technological perspective, the Mandela Mining Precinct (mining research institution) will support the local manufacturers to meet the technological demands of mining companies and the equipment manufactured currently is susceptible to add on technology. Verification of local content is a task given to the South African Bureau of Standards (SABS) in the Mining Charter. The financial and capacity constraints currently faced by the SABS makes it impractical for the SABS to fulfil this task. In this regard, the discussions proposed a verification process similar to the Broad Based Economic Empowerment (BEE) verification process overseen by the SABS. This verification proposal would create a new industry, jobs and competition thus driving the cost of the verification process down.

The Mining Charter is gazetted and both local and foreign suppliers doing business with or wanting to do business with mining companies in South Africa must comply with it. It remains to be seen if South Africa’s business environment is conducive enough to attract the kind of capital investment required to industrialise South Africa and as a result meet the local content requirements of Mining Charter.