Getting transformation back on track

Transformation in South African mining continues to slowly move in the right direction


Transformation in South African mining continues to slowly move in the right direction with some high profile mergers between established companies and emerging black-owned firms over the last three to five years
One of the leaders in this regard is Nombini Mehlomakulu whose company, Lwazi Capital, merged with highly respected Digby Wells Environmental in 2015, putting transformation words into action.

Mehlomakulu is currently the Non-Executive Director of Digby Wells Environmental and managing director for Lwazi Capital, the 30% BEE shareholder to Digby Wells Environmental. Prior to this the well travelled leader held the position of international manager: social performance for Anglo American.

Before that Mehlomakulu was the head of Investor Relations for the Sage Group, a financial services company, and completed her BA Honours in Political Science. Mining chats to Mehlomakulu:

In terms of transformation, are we on track with the more skilled, semi-skilled jobs available?

Transformation remains a challenge and in this country has happened on two levels, the lower levels and at the board and executive level, but we have left out that whole middle layer. That’s where the real transformation is going to take place in terms of building long-term skills that will take over and run as industries. But we need a different type of transformation, which is not just in terms of skills in the company, we need to educate our kids earlier about these industries when they choose their subjects at school level and encourage them to choose this industry and this sector - the mining and mining services and support areas.

Do you think mining hasn’t been advertised properly to students as a viable option?

They’ve only seen certain aspects of mining but not others.

A lot of young people know about engineering, they know about geology but they don’t know about the other side of mining, for example, there are not enough metallurgist. We still need the engineers and support from the lawyers, environmentalists and social practitioners.

We don’t have enough people in the hard sciences. I don’t know if that is because of the barriers to entry associated with our schooling system, but yes, those things are going to change.

Access to finance for start-up companies is often a problem for the entrepreneurially minded graduates?

It’s always been a challenge, either from the Development Finance Institution (DFI) themselves or from the commercial banks, but there are now contractors who are starting to fund the junior miners. But funding is a problem—in order to get the juniors ready, you need to make that initial investment.

It might seem like a lot of money when you say for a certain permit you need R500 000, half a million is a lot of money when you don’t have money. R500 million or half a billion is achievable if you’ve got support, so in order to be able to get to that stage you need to build up, you need to get the right permits and licenses and to get that it is expensive for junior miners, so we need to find ways and alternatives to fund those.

How has the transition gone since merging with Digby Wells?

Internally we’ve looked at it in various pillars. We know the buzzword is 51%, we cannot stay away from that, 51% BEE ownership, and we are looking at those initiatives. Secondly we’ve looked at our staff complement at both the executive level, middle management as well as entry level staff, so we’ve addressed it and I’m happy to say we are on target, there is not one area where we are slack.

In terms of supplier development we found that to be slightly challenging based fundamentally on two reasons, we have worked with people for a long time and established relationships. Being able to find and get them to the right level of transformation because you need to work with them and get them to transform has not been easy.

We’ve had some success in that area but in some areas you don’t find a lot of BEE suppliers, for example in the drilling sector, so we’ve struggled.

In areas where we’ve been able to find empowered suppliers we have worked with them and encouraged our existing suppliers to be empowered. We’ve also done well in terms of social development, which is the last pillar of empowerment.

In terms of leadership and women in leadership in mining, are you seeing a shift in that?

Again it’s an area where there’s still some work to be done, but it is better than it was five years ago and we’re hoping that in five years time it will look radically different. 

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Issue 42