In this inspiring sequel about the life journey of Phineas Letsoalo, he tells us about the change in mindset he had to make to transition from an Anglo American employee to an entrepreneur and business owner [of Purechem]. He also lays out his thoughts for how we can encourage more children to fall in love with, and pursue science as a career, and how to create and support more small businesses, starting with teaching kids at primary school – WT.
If you missed part one, listen to it here.
PHINEAS LETSOALO: It’s basically a chemical, I would call it a solvent. So it’s a chemical which when mixed with ore at a high temperature it separates, it reduces the melting temperature of metal.
WARREN THOMPSON: Okay, so in a piece of ore out of Rustenburg Anglo Plat mine there where you’ve got rhodium, gold and platinum the flux lessens the work that the smelter has to do.
PHINEAS LETSOALO: Exactly.
WARREN THOMPSON: Okay, so it saves a lot of money. Is it ground into the rock or how is it applied?
PHINEAS LETSOALO: In the laboratory environment they put it into a cup, it’s called crucible, they put it into the crucible and put it into the furnace and turn the temperature up to 1 100 degrees Celsius and everything will melt. Now, what the flux will do – we then add what is called a collector, it’s either lead as a collector or we add nickel as a collector, depending on which samples you are working with, then if it’s lead it will collect all the precious metals and leave everything else aside and everything else would mainly be the base metal, which will go with the slag. Slag is made up of aluminosilicate and then it will form a class. Then the lead button will contain all the PGMs (platinum group metals) and that’s what they will analyse further to determine what is in the original sample.
WARREN THOMPSON: What year was it that you went to GIBS?
PHINEAS LETSOALO: It was in 2008.
WARREN THOMPSON: So you went and did the business degree and then what happened?
PHINEAS LETSOALO: Thereafter my project was on the flux and we found that it would have been more cost effective to find a BEE company to manufacture this for Anglo and I sent that as a proposal to Anglo. Initially it wasn’t accepted but the following year they accepted it and said we’ll get Zimele to work with you to explore this further.
WARREN THOMPSON: Zimele is the enterprise development arm?
PHINEAS LETSOALO: Yes, it’s the enterprise development arm of Anglo. So the whole year I worked with Zimele to look at the feasibility of the business and finally they said this looks like it will work, go ahead and set it up and Purechem was born out of that.
WARREN THOMPSON: So did they promise to buy the product from you or did they capitalise the business for you or how did this work?
PHINEAS LETSOALO: Initially they were going to open market for me within Anglo…
WARREN THOMPSON: Okay, so that you could sell into Anglo.
PHINEAS LETSOALO: Yes, so that I could sell into Anglo but later they financed the business and never gave me the market.
WARREN THOMPSON: Oh really, so they capitalised you but then why couldn’t you sell into the group?
PHINEAS LETSOALO: I still don’t know today but I soon realised that maybe this is the best training opportunity for me not to be cushioned within Anglo but to compete with everyone out there. So I started looking for my own customers and it was very tough because initially before I could even secure funding I had people saying we will buy your product, bring me the sample. I didn’t have the machines, I didn’t have anything, I only had my words. I had to start looking around as to how can I solve this problem and I partnered with a company called Glen International, it’s an Australian company working in the same space that I am in. I will send them the formulation and they will prepare the Flux and I’ll give it to my customer. In no time one of my customers, the big mining house, AngloGold Ashanti, gave me a contract and that’s when Zimele released the funds for me to buy the machinery. Today I have got a fully-fledged, well equipped factory and I’m manufacturing my own flux. There are a number of customers who are actually coming to the party and I really appreciate and thank them for that.
From employee mindset to business strategy
WARREN THOMPSON: So did it take a bit of a mental adjustment for you? You probably had a nice career path in Anglo American, it’s a fairly cushy place I think, if you get into the right echelons of Anglo it’s been a good place to work and develop. Did that require a change of mindset for you?
PHINEAS LETSOALO: A lot. I think the first few months you realise there is no salary coming in and that creates a different way in the way you think. But fortunately for us, immediately after setting up Purechem Anglo Zimele put us on mentorship through Oric and that mentorship came with a nine-month stipend and that was getting us used to the fact that there won’t be a salary coming at the end of the month. I used that opportunity to run around, talk to customers and start looking at what can I do to make sure that I get the business off the ground as speedily as possible.
WARREN THOMPSON: Now you’ve got a fully-fledged business that sells into a range of mines and I think you said the reason for this interview was delayed for a while was because you were traveling to China, so just tell us a little bit about what the business is and what you hope for it to become in the future?
PHINEAS LETSOALO: The challenge within our industry is we only have one company supplying the main raw ingredient, which is Letharge. So I travelled quite a lot to China to source the raw material that I use in the manufacturing process. Another important product that I need to have as a mix of my product offering is the cupels and crucibles, so my plan is to secure equipment to manufacture those.
WARREN THOMPSON: So you recently travelled to China, so you’re getting into the business of manufacturing these things as well?
PHINEAS LETSOALO: Yes, I’m busy in discussions with the Chinese engineers to design the equipment for me to manufacture these products.
WARREN THOMPSON: I had a fascinating interview with a young lady called Tshiamo Legoale last who, she’s a young geologist who actually works at Mintek as well. She won a prize in an international science competition in the UK and her love with science was also by default. I think she was at one of the rural schools in the North West but she decided to study geology almost by default when she got to university as well. So, I’d love to understand in a country where we’ve got so much unemployment and we need entrepreneurs like you, how do you think we can go about – if you look back at your own story – how do you think we can go about getting more people first of all involved in science, and second of all willing to start their own businesses and become entrepreneurs?
PHINEAS LETSOALO: The first one, to really get people to be involved in science we need to first create an exposure. From the rural setup science is theory, you don’t have the well-equipped labs, you don’t even know where it is applied. Secondly, those who have done science we don’t have a mechanism of bringing them back as role models. We really need to create something around that. We also need to take students to companies, maybe even for a week or so to see how science is applied and that will start creating interest, especially in rural areas. Currently the world is going into robotics and I’m afraid that the rural communities are being left behind because they’ve never seen anything to do with science and we really need to do something around that.
On the entrepreneurial side I think this must start at high school, it can’t be something that is done only at business schools. Entrepreneurship should be taught very early, say from grade six upwards, people should be taught about how money works, the value of money, how you generate income, how to do your accounting and things like that. But also to start identifying opportunities because entrepreneurship is really about identifying gaps in the market and solving problems and taking opportunities that exist around you. There are lots of those opportunities and the only challenge is how do you mobilise resources to optimise on those opportunities.
In a country like South Africa we really need to open up and help entrepreneurs very early because 70% of startups are dead within a year and that’s such a waste of resources. I was fortunate to partner with Cheetah last year to conduct a study on challenges facing SMMEs in the chemical sector, especially as far as market access is concerned. The study found that although big companies want to work with small businesses there are a lot of fears as to how do we absorb them into our system, are we going to risk not meeting our target because of these small businesses or are we going to have a mechanism where we will absorb them but continue with the status quo.
There’s a dire need to break that disconnect and small businesses can’t even go to big businesses because they require certain tests to be done. For my product to be accepted anywhere in the mine it must be tested and at times these tests take forever and as a small business I don’t have a lot of resources to wait such a long time. If I were to do it my own way through SABS and things like that it costs a lot of money, which I might not have. So something needs to be worked out around that. If we were to build a country with a lot of entrepreneurs, SMMEs, succeeding in that space because a lot of employment comes from them, 60% of employment comes from small businesses but there isn’t a visible support system for these businesses.
WARREN THOMPSON: Phineas there’s obviously a bit of a backstory to this interview because our producer, Hezekiel, told me about you and he nagged me and said you’ve got to listen to this guy and I said, okay, okay and eventually I did so. Hezekiel, thanks very much, it’s amazing what happens when people open their ears and open their eyes and what you can see. I think Phineas is a great role model for a whole generation of young black kids who might want to be scientists and entrepreneurs. Thank you very much for telling us about your story, from climbing coffee trees to selling chemical products to mining houses that’s been one hell of a journey, congratulations and I wish you all the best for the future.
PHINEAS LETSOALO: Thank you very much, Warren, and thank you, Hezekiel.
WARREN THOMPSON: That was Phineas Letsoalo, the owner of Purechem.
If you missed part one of the interview, catch it here.