Giving back what lies beneath
Mbongeni Mguni | Friday February 20, 2015 16:43
While the sparkle of the new diamond mines discovered in the 1960s and 1970s dulled its lustre somewhat, BCL Mine’s position as the country’s first large scale mining operation has always been esteemed.
The Mine, formed via a British House of Lords-ratified agreement with Bangwato regent, Tshekedi Khama, was the country’s first taste of mineral success, possibly providing impetus and encouragement to explorers elsewhere around the country.
The Morupules, Orapas and Jwanengs would emerge later, brushing aside the jitters that characterised the economy’s first forays into mining, to reveal a multi-billion Pula trove.
The enduring criticism of this golden age of mining in the 1960s and 1970s, has been that the direct benefit to citizens is limited to employment creation, while other opportunities such as procurement and contracting are enjoyed largely by outsiders.
There is a move to change this, however, according to Botswana Chamber of Mines CEO, Charles Siwawa.
Formed in 1983 by BCL Mine, Debswana, Botswana Ash and Kgale Quarries, the industry body “serves the interests of the mining and exploration companies together with associated industries.”
Today, 32 years later, those “interests” include a focus on citizen economic empowerment and upskilling of Batswana, to better position them for a greater share of the profits emanating from the burgeoning mining sector.
Now with 30 members spread across the country boasting annual expenditure in billions of Pula, the Chamber says it is well-placed to lead citizen empowerment and economic diversification, in pursuance of government goals in the new millennium.
Founding member Debswana alone spent P4.1 billion in procurement on Botswana-based companies in 2013, with another P653 million on citizen-owned companies.
During the same period, Debswana spent P1.4 billion in procurement from non-Botswana based companies. The diamond giant has established a Supply Chain register on which 119 new citizen-owned companies were assessed and added in 2013.
While figures are unavailable, other founding Chamber members such as BCL Mine and Botash are almost single-handedly sustaining economies in their respective towns through preferential procurement.
Most businesses in BCL’s hometown of Selebi Phikwe have grown around the Mine, particularly since the initiation in a 2006 procurement policy marking a “deliberate decision to support local suppliers and support Selebi Phikwe’s diversification efforts.”
“We believe that the mining industry can contribute to government’s Economic Diversification Drive and we have looked at our purchasing power in the industry,” says Siwawa, in a wide-ranging interview at his CBD headquarters.
“A lot of that is being bought from outside the country and we are saying ‘let’s look at using that purchasing power to buy our goods and services from within.’
“This is not a small project. It’s the largest that we have undertaken as a Chamber.”
The Chamber’s modest offices belie the collective wealth of its members. A gallery of historical milestones in mining adorn the spartan but pristine office, from where Siwawa runs the industry body.
It is in this unassuming office that a landmark project charter was embraced by all the titans of the mining industry last year, with the project launched last October.
However, the road was not all smooth.
Records of strategic meetings held prior to the October 2014 launch of the project reveal misgivings among some mines as well as concerns around the readiness of local suppliers, lack of supportive citizen empowerment/business protection legislation and a “culture of dependence” among local entrepreneurs.
Besides greater entrepreneurial development, citizen empowerment and economic diversification, however, more mines began to see the very real benefits of the procurement project, which included greater efficiency, cost savings and easier availability of suppliers.
Of the numerous benefits to the national economy, the greatest is expected to be the higher attraction of Foreign Direct Investment as companies seek to set up in Botswana to tap into the procurement project.
“It will establish a manufacturing base and create jobs here. We are now seeing a lot of companies both within and outside the country enquiring about what the project entails.
“We appreciate that capital equipment cannot be manufactured here even if we wanted to, but small items such as pumps and pipes are coming.
“There’s quite a few investors wanting to come over and set up for pipes manufacture. Imagine adding ten or 100 companies each employing 50 to 100 people; you’ll see that it’s a game changer for Botswana,” Siwawa says.
Siwawa adds: “Imagine when you need pumps and you can just order locally, instead of waiting for an order from outside our borders. This is a cost-saving initiative for the mines as well.”
With all the mines officially on board, the gauntlet has been thrown to suppliers and manufacturers, who will need to ensure the highest quality and most competitive prices in order to prise open the billions of Pula in 2015 procurement spending.
As alluded to by Minerals Minister, Kitso Mokaila in launching the procurement project last year, only passionate and dedicated local businesses will find seats at the table as the bigger cake in the mining sector is sliced up.