Community miners to benefit from R1.6bn Anglo American contract

We have a programme that identifies entrepreneurs and what they’d like to do. We incubate them and give them the necessary skills: Vusi Maseko of Kumba.

SIMON BROWN: I’m chatting now with Vusi Maseko, supply chain general manager at Kumba. Vusi, I appreciate the time this evening. Anglo American announced a R1.6 billion contract to benefit community miners. Obviously Anglo American is the parent company of Kumba. Talk us through the process. We hear a lot, particularly in the mining space, about working with communities. I’m thinking, for example, Pan African has started a blueberry plantation.

But this is fundamentally different. This is actually bringing the community into the process of mining.

VUSI MASEKO: Good evening, Simon and listeners of SAfm. Thank you very much for the opportunity. Yes, you are correct. This is actually a culmination of work that we’ve been doing for at least the past five years, and it’s been establishing how, as mining companies, we can take part in transforming South African society and actually giving back to the communities that are hosting us.

SIMON BROWN: In essence it’s a R1.6 billion contract. This is a giant amount of money. It is up in the Northern Cape. The community – is this them entirely, are they working as independents, or are they working sort of hand-in-glove with Kumba?

VUSI MASEKO: How this is going to work is that we’ve been focusing on developing businesses that are based within the communities. We have a programme that identifies entrepreneurs and identifies what they would like to do. We share with them our value chain and through that they’re able to see what goods and services we consume. Then they set themselves up into smaller businesses.

Some of them have grown to be medium-sized businesses. We incubate them, and we give them the skills that are necessary. Once they’re ready to transact with us, we then run a fair-procurement process and we select one or two.

One of the things we have been insisting on is that, when we have opportunities like this one, which is sizable, we’re not looking for one or two individuals to take that opportunity. We want them to represent a fair size of people who come from their communities. In this instance we’ve got four independent businesses that have come together that have grabbed these opportunities and they’re going to grow them. They then [in turn] employ people from the communities. Also, they themselves will procure goods and services from their community. So this is a spin-off effect that has a potential to grow the local GDP.

SIMON BROWN: It’s proper skills transfer. You made the point there that there’s a procurement process. This isn’t in a sense favouritism. This is really the upskilling of individuals, of ultimately the community as those pieces all come together.

VUSI MASEKO: Absolutely. One of the things that is traditionally helping is that when we, as mining companies, come to communities, we would be importing skills from outside those communities, as we all know the challenges that those communities that are placed outside the big metropoles actually suffer from – key development, be it education, be it health. So while these things are [in the making], we focus on building those things.

We also then ensure that we can grow that more, sustaining it further by involving those communities through entrepreneurship to participate in our value chain, because we do have a value chain that can support the startup of small businesses, see them grow through and get to a point where they actually provide good services and goods – beyond just providing it to Anglo American, which would like to see them providing [those things] to other businesses, not even mining companies.

SIMON BROWN: It’s those proper skills which can then be used within the community and obviously broader. As I understand, you’re not talking around this, you’re not proposing this – this started at the beginning of January with a target of between five and 10 million tonnes of iron ore for this calendar year.

VUSI MASEKO: Absolutely. As we speak right now, we’ve got that company mobilising on our site, establishing themselves to start operating. We’d like to see the first tonne of iron ore coming through in the second month. Then, of course, as you say, by the end of the year we’d like to see that having grown to about five million tonnes. Of course the upside is to grow that beyond 10 million tonnes.

SIMON BROWN: Ultimately, there’s a mine there, there’s a lot of iron ore there. That number can continue to grow. As I said right up front, it’s proper community involvement. I hate the word ‘upliftment’, but this is the real deal.

We’ll leave it there. That was Vusi Maseko, supply chain general manager at Kumba. Anglo American has given R1.6 billion. I think the key point there is that this is under normal procurement processes, this isn’t favouritism or anything. This is a community which has got together four ventures for R1.6 billion. This is going to have to have a significant impact in the Northern Cape.

We’ll leave that there. Thank you very much for your time.

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