As one of South Africa’s largest industries, mining plays a significant role in South Africa’s social and economic transformation.
To demonstrate our commitment to South Africa, and to government’s National Development Plan (NDP), one of the areas we place a huge focus on is local procurement. We chatted with Ashlin Ramlochan, Principal for Sustainable and Responsible Supply Chain to get his views on local procurement and the potential impact of the recent industry workshop on supplier development.
What local procurement means for mining
According to Ashlin, local procurement is increasingly recognised by global mining companies as a priority as it plays a key role in securing and maintaining our license to operate.
He believes that this is the ultimate means of sustainably developing thriving and healthy host communities, and at the same time, boosting efficiencies within our own Supply Chain. If done properly, it is one of the most effective ways of driving real community development through smarter purchases rather than over investing in social spend. Developing our local suppliers will help drive transformation, create better visibility and assist in building their capacity. All-in-all, helping them grow, create more jobs, and became a part of a thriving South African economy. This is at the core of strong economic growth, as examples, in the USA over 53% of businesses are small businesses, while in Europe this is as high as 65%.
Our approach to securing, transforming and making our Supply Chain more inclusive through programmes such as local procurement is aimed at exceeding compliance targets as we work together with our stakeholders to foster meaningful and sustainable change.
This is part of the reason why we, as Anglo American, have developed our own ‘Local Procurement Toolkit’ to help guide our operations and align all efforts to grow suppliers wherever we operate. Not only in South Africa, but across the world.
“We want to have a common database of mining opportunities in South Africa for potential suppliers and want to share this toolkit with other mining companies. This will allow us to simplify the way we communicate with suppliers and helps us increase opportunities for them beyond our supply chain.”
Industry collaboration equals national growth
Recently the industry came together to harmonise approaches to supplier development in a workshop that was open to all mining companies. While this was the first of its kind, Ashlin is confident that it’s ‘more than just a talk shop’.
It was there that he saw industry leaders band together to analyse and share opportunities for collaboration and critical learnings. “This had never happened to this degree before,” says Ashlin.
“Increasing our local procurement efforts means more money, skills and opportunities are made available to our host communities. As an industry, we are too fragmented, so it will save us a lot of time, effort and money if we just consolidate opportunities for small businesses near all our operations. This means job creation, skills development and more efficient mining companies. It’s a win-win for the economy and social development,” says Ashlin.
Over the past four years, our business units in South Africa have spent more than R100 billion with Black owned suppliers (excluding goods and services procured from the public sector and state-owned enterprises). In 2014, alone the business units expended over R39 billion (nearly 70% of total expenditure in South Africa) with Black owned businesses.
Ashlin says, “At the end of the day, our approach to securing and transforming our Supply Chain aims to exceed compliance so that we can work with stakeholders to foster meaningful, sustainable change. We believe that through the creation of meaningful entrepreneurial and employment opportunities through our Supply Chain, we will help more people to build sustainable livelihoods, which is good for us, them, and the country as a whole.”
He added that doing this as individual companies is one thing, but doing it together as an industry is what economic and social transformation is all about.
Learn more about our global approach to local procurement and read our latest Transformation Report (page 87) to unpack the latest facts and figures.