In Excess Of R535 Million Worth Of Purchases To Date From HDSA And BEE Compliant Businesses
Between January and September alone Kangra procured over R535.86-million worth of goods and services from Black Economic Empowerment (BEE) compliant companies. By the end of 2019 it is forecasted that this figure will increase to a total of around R600 million.
Moreover, over the past 12 months, Kangra has spent over R33.52 million on procuring goods and services from local communities, notes Procurement Manager Michelle Pretorius.
She has been with Kangra for five years, having previously served as Procurement Officer before being appointed to her current position of Procurement Manager.
The Procurement Department is responsible for procuring everything that the mine requires, from items that cost a few rands like pens and pencils to large pieces of equipment like continuous miners and everything else in between.
A major emphasis as part of opening a new chapter of improved working and business relationships with the local community at Kangra was increasing local procurement opportunities. This has been a major focus for Menar, since its subsidiary Canyon Coal became the new owner of Kangra in September 2018.
“What we are also doing on an ad hoc basis is to ensure that small items like general hardware is purchased from local businesses, which is already enhancing their knowledge and improving the quality of goods they are able to supply the mine,” states Michelle.
Recently Awarded Product and Service Contracts to Local Companies:
1.For the supply of groceries and cleaning products to the mine.
2.Underground ventilation contract awarded to a local entity for the first time. It was awarded in 2018 and will run for two years, in which time, Kangra will be working closely with the company to ensure they develop their service offering. The contractors are responsible for ensuring that all ventilation controls are correctly constructed, maintained and properly located to provide ventilation to working sections and other areas where ventilation is needed to dilute methane, respirable coal dust and other contaminants.
3.Contract awarded for sanitation management, which includes the cleaning and servicing of all the portable toilets for underground and surface areas.
4.Sewage disposal services contract for the mine.
5.Underground conveyor belt cleaning.
6.Surface cleaning at the siding for any coal spillages that occur.
7.Coal haulage – Through a local economic development (LED) Mentorship Programme Kangra has appointed a strategic partner to assist with the development of two local coal haulage contractors. It has created additional employment and has the opportunity to develop the companies into sustainable coal haulage contractors. This will create a minimum additional turnover of more than R40 million for the local contractors over the next 12 months, which will increase every year until targets are met.
8.Community hall construction.
Future Contracts that Will be Awarded to Local Companies:
1.Gardening services for the mine.
2.Transportation of workers to and from the mine – from the surrounding towns and cities. Moreover, Michelle says that the Procurement Department has put in a place a procedure to diversify the awarding of contracts to the different communities, to ensure that business opportunities are fairly spread among the local communities that fall within the jurisdiction of the mine.
“It is important for this to be done correctly in order to allow for fairness and the creation of a system that allows all communities to benefit from business opportunities arising from the mine,” she states.
Improving BEE Procurement Compliance
The Mining Charter stipulates that a minimum of 80% of mine’s total spend on services must be sourced from South African based companies:
50% must be spent on services supplied by Historically Disadvantaged Persons Owned and Controlled Companies;
15% must be spent on services supplied by women-owned and controlled companies;
5% must be spent on services supplied by youth; and
10% must be spent on services supplied by BEE compliant companies.
In 2017, Kangra’s total BEE procurement compliance was only 58%, in 2018 this improved substantially to 85% and to date Kangra is standing at around 88% and is expected to reach around 90% by year - end.
“We are committed to supporting HDSA and local businesses through our preferential procurement procedures. Kangra seeks to promote BEE and local procurement in order to support the development of commercially viable local businesses that meet our requirements,” Michelle concludes. These projects also form part of Kangra’s skills development programme, which seeks to provide work and new skillsets to local, historically disadvantaged building contractors.”