Leading South African mineral processing equipment manufacturer Multotec was the first to take the pioneering step of having its local content verified by the South African Bureau of Standards (SABS), in line with the requirements of the draft Broad-Based Socio-Economic Empowerment Charter for the Mining and Mineral Industry, 2018.
The work of the technical teams from the SABS and Multotec together pursued the creation of this “prototype” process as a starting point for promoting local content in mining goods, and July 2018 saw the end of the verification assessment for Multotec.
Mines’ procurement requirements have, in the past, been linked mainly to the B-BBEE ownership of suppliers, but the new Mining Charter requires a more direct measurement of local manufacture embodied in the products themselves.
Following the publication of the National Development Plan, the Department of Trade and Industry (DTI) and the Department of Mineral Resources (DMR) have put more emphasis on the promotion of the South African manufacturing industry. These proposals were incorporated by the Department of Mineral Resources in the Mining Charter.
The amendments propose that 70% of all goods procured by mines are required to be “South African manufactured goods”, which are in turn defined as “goods with a minimum 60% of the value added during the assembly or manufacturing of the product is created in the Republic.” It is also defined that this plan is phased in over five years, giving suppliers time to align themselves and become compliant if they wish to continue supplying mines.
Known for setting benchmarks, the Multotec Group took the proactive decision to drive this process after a DTI-SABS presentation early in 2018 to the South African Mineral Process Equipment Council (SAMPEC) – part of the South African Capital Equipment Export Council (SACEEC) – where the benefits of the local content requirement were outlined.
South Africa’s manufacturing sector has shrunk considerably in recent years, and this localisation drive forms part of efforts to support and grow local manufacturing and job creation.
The Multotec Group’s action underpins its support for the spirit of these local manufacturing requirements by its investment to have its products verified. While there were reasonable standards in place against which such verification could be initiated, there were aspects of the requirements and processes that were, at that stage, not clearly defined.
The Multotec Group has invested millions of Rands over the four decades since its establishment in 1978 in state-of-the-art manufacturing plant and equipment and is actively engaged in training initiatives to ensure that the skills are developed and maintained to put these investments to best use.
Multotec believes this process will need to be embraced with a significant responsibility and accountability to the industry by local mining suppliers. The key focus among all stakeholders – including local manufacturers – must be the sustainability and success of the South African mining sector, with the supply of world class products at competitive prices to the mining industry.
The mining industry is under severe cost pressure and is not in a position to absorb higher prices from suppliers. Local manufacturers are therefore obliged to continue becoming more competitive themselves, and to improve productivity as a strategic priority going forward. For mining in South Africa to be competitive, it must have an efficient and competitive supply chain.