HomeMagazine ArticlesThree ways to empower mining SMMEs in South Africa

Three ways to empower mining SMMEs in South Africa

Despite obvious challenges, including energy insecurity and policy uncertainty, the immense natural resources in South Africa – coupled with current macro factors – provide ample opportunity for the country to further enhance its position on the global mining stage.

Spencer Eckstein, Director of Business Development, Ukwazi

One fundamental aspect hampering South Africa’s progress in mining is the lack of industry skills – skills that are required to meet the ongoing technological and leadership demands of a green and digitally-driven economy.

Access and supply chain visibility remain essential when it comes to growing local small, medium, and micro enterprises (SMMEs), as do the stipulations of the Mining Charter III and related legislation, which aim to promote job creation and empower the historically disadvantaged.

Here’s how we can get it right…

Engagement and hands-on collaboration in South Africa

When selecting SMMEs to collaborate with, it is critical that mining companies engage with a view to establish whether businesses effectively align with their goals, values and ethics. In addition, these SMMEs should be viewed as more than just vendors, they are in fact, partners in success.

As part of Ukwazi’s transformation journey, focus has been placed on engaging with SMME and/or black junior mining companies and participating with them on projects and tenders; enabling them to become established and trusted suppliers to the industry.

Ukwazi has, since 2019, established a black women in mining initiative comprising the company’s own black female mining engineers. The objective was to create a black female mining contractor business, focused on load and haul, rehab and mining for closure.

Incubation and training

Ukwazi has used various enterprise incubation techniques to allow the SMMEs in South Africa it has worked with to grow and mature as they navigate going up the value and maturation curves of business evolution.

These involve assisting SMMEs with opportunity recognition; with conducting technical due diligence and project valuation; and helping these businesses apply for mining equipment and negotiate with original equipment manufacturer (OEMs).

It is also critical to guide SMMEs on how to submit tenders, proposals, and bids to provide technical and other services to mining companies. Of course, on-the-ground knowledge sharing, and skills transfer are non-negotiable. Doing this in an academic setting also helps to lay the foundation for adequately equipping young, sector professionals of the future.

Impact over quantity

The reality is that many SMMEs are start-ups and have little to no mining experience. Despite this, they must start somewhere. Not all SMMEs can be assisted, but emphasis can be placed on trying to make an impact over a longer period of engagement rather than just focusing on quantity over quality.

When it comes to SMME empowerment, there are valuable lessons that can be shared. It will take longer than originally anticipated (not forgetting regulatory authorisations) and expenses will be much higher that initially budgeted, with SMMEs and/or junior miners often underestimating the complexity of project, costs, and timeframes.

Lastly, expectations must be managed, results are worth it, but they will take time. Ultimately, the overall goals can be achieved: enhancing local employment and empowerment and equipping mining SMMEs to provide the same services as their peers, independently.

What the industry can do to help is to establish dedicated tech channels on their procurement platforms for SMMEs to participate in directly, particularly where procurement is outsourced, to improve access to opportunities in South Africa.