OPERATIONS •
TRANSFORMING PROCUREMENT
– NAVIGATING CHALLENGES AND EMBRACING INCLUSION
Contributed by Mbali Milanzi , co-founder and executive director of Tshepa Basadi
Provoked by the Mining Charter , the inclusive procurement era in the South African mining industry is far from perfect . Real transformation and inclusion emanate when trade opportunities accompany due diligence .
I
have been very privileged to work in the South African mining industry ; our industry is resilient and holds a great deal of potential . My lens in the mining world is narrowly focused on the capital space , where I ’ ve worked as a project manager , an employee and an entrepreneur providing project management services to the mines .
The inclusive procurement era has been around for almost as long as I have been in the mining industry . The targets set by the Mining Charter of 2010 have provoked many to work on these goals earnestly . The mining charter ’ s transformation targets stipulate the following focus areas : ownership , employment equity , procurement , enterprise development , human resources development and mine community development . Procurement plays a pivotal role in all capital and community projects and has nudged mining companies to make room for suppliers and enterprises in their local communities , which has created some semblance of positivity . The Mining Charter provides procurement spending targets of 40 % on capital goods , 70 % on services and 50 % on consumables from black entities . According to the Minerals Council of South Africa , in 2018 , in their analysis of 87 mineral rights holders , these entities exceeded their procurement targets and achieved 75.4 % on capital goods , 75.1 % on services and 79 % on consumables . 1 Demonstrably , this points to a change in the face of procurement .
Project managers have been instrumental in leading the change and working alongside procurement departments to drive transformed procurement practices . And over the past decade or more , we have seen a rise in black entities entering the mining industry . However , the reality is that both the mining community and black entrants into it were not ready for this wave of change . Many jumped on the bandwagon without a clear strategy or an understanding of the critical success factors . Chaos ensued , contractors absconded with large sums of up-front payments , projects were left unfinished or poorly finished , black entities ran out of funds to complete the projects – there were many horror stories . Suffice it to say that this chaos left many weary and apprehensive about procuring from black entities . And to this day , with all the progress made , many mining organisations and the project managers representing them perceive black entities as a risk .
Supplied by Mbali Milanzi Supplied by Mbali Milanzi
Mbali Milanzi , co-founder and executive director of Tshepa Basadi .
Mbali Milanzi on site .
I believe project managers have been instrumental in leading the change and working alongside procurement departments to drive transformed procurement practices . www . africanmining . co . za African Mining Publication African Mining African Mining • March 2024 • 19