• OPERATIONS
We now find ourselves in a dilemma – the industry is still apprehensive to procure services from black entities , and procurement decisions are now made in fear . How do we move forward ? Fearful or not – the mining charter targets are still an ever-present reality compelling mining organisations to act . In a bid to correct past errors , mining organisations have over the years adopted and improved their enterprise and supplier development ( ESD ) programmes . These ESD programmes are meant to ensure that black entities are developed before or while they are given opportunities to trade . Programmes usually include entrepreneurial skills training , as well as funding opportunities , but very often lack trade opportunities as this process is driven by apprehensive stakeholders . While all good and well , ESD programmes therefore sometimes fail to demonstrate change as black entities are stuck in ESD programmes without real opportunities to build sustainable businesses . As the old saying goes , “ You only have a business if you have a customer ”, and many black entrepreneurs are without customers , yet they are building “ businesses ”.
The risk aversion developed over time has led to an exclusionary procurement practice , which assesses ways in which to keep the black entity at bay through skewed adjudication practices . So , how do we move away from making decisions with a biased perspective to making decisions that serve us well , while still using a risk-based decision matrix ? Truth be told , my proposal will not be popular with the procurement fraternity as it requires time and effort . However , I believe that these are some of the lengths we must be willing to go to , to meet preferential procurement targets in the mining industry : 1 . Intensive market research is necessary through continuous requests for information inquiries – this trend has grown in the industry . This is key to understanding who can provide the services within the community as we prepare to go out on tender and a great way to target new entities in the community .
2 . Project managers need to assess their projects and preallocate work that is not deemed specialised and commit to an inclusionary procurement process , where work packages are tendered with the hopes of awarding to qualifying black entities within the community .
3 . Another practice is enforcing inclusive procurement from any bidders who do not meet the preferential procurement requirements . Some mining companies are using this method , which makes a difference .
These practices will encourage the development of procurement habits aligned with the change we want to see .
Typically , in multidisciplinary projects , the mine should do homework on black entities in the community and build up a database of entities to invite to tender . It is very possible that the companies may have limitations and may be unable to carry out the entire scope of work . This would call for the project manager to segregate the work breakdown structure into packages for tender and identify suitable entities to invite . In my experience , through a fair and robust procurement process and assessing the entity from a commercial and technical perspective , I have appointed black entities from communities to carry out single work packages , allowing them to establish credibility steadily .
A case in point , was when my team appointed a civil construction company owned by a black civil engineer for a time-sensitive project , where the work packages relied on meticulous earthworks and civils as the project was neither simple nor insignificant – and the chosen entity did not have it easy .
This was one of the first local and 100 % -black-owned entities to be awarded a construction project of this magnitude in our organisation , and needless to say , the award was met with a lot of criticism . The truth of the matter is , if we were looking for reasons not to hire the entity – there were many :
• The company was junior compared to the other bidders , with minimal mining experience ;
• The entity was owned by a young black engineer , who had less experience ;
• The company did not have a long , impressive list of references .
“ Experience ” has been utilised by many to keep people from advancing , and sometimes with good reason . However , when a process is applied fairly and an entity meets the criteria applied in the adjudication criteria , it should be awarded on merit , and neither emotion nor or fear should be applied to exclude them .
We knew when we hired the entity that they had little mining industry experience which was a concern . However , they had construction experience and had the right mix of knowledge and willingness to learn the industry . They also met the minimum statutory requirement criteria , and their pricing was competitive . Through due diligence , we were assured that we were not dealing with an amateur entrepreneur . All that was required was “ an opportunity ” in the right mining environment to enable growth .
We took a calculated risk – a leap of faith with our eyes wide open – we assessed the risks and were prepared to mitigate failure and , better yet , utilise this opportunity to set this company up for success . Our project approach relied heavily on logic and risk mitigation , which looked at the following critical success factors :
• Safety – We had to ensure meetings were held to make the entity aware of the mining safety requirements and allow them an opportunity to learn . More than that , we provided safety support to ensure that all controls were put in place and upheld , this would be the same for any other contractor .
• Finances – No upfront payments were granted to the entity . However , favourable payment terms were implemented , which was mutually beneficial for the mine as they benefited from preferential procurement points on their scorecard , and the entity was able to manage its cash flow .
• Technical / quality – The engineers who designed the system were involved in providing guidance and conducting quality checks , which is common practice for all projects . We had an experienced in-house construction manager to facilitate technical and safety measures and provide fulltime support .
This entity is a success story because it executed the work within price , scope as well as quality requirements and went on to execute many other projects at the mine . Positive
20 • African Mining • March 2024 www . africanmining . co . za