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Local Roots, Local Benefits

Black Royalty Minerals’ Chilwavhusiku Colliery in Bronkhorstspruit may take its name from the past, but it is focused on the future.
Image: Black Royalty Minerals’ Chilwavhusiku Colliery - Bronkhorstspruit Image: Black Royalty Minerals’ Chilwavhusiku Colliery - Bronkhorstspruit

Named after a historical Venda warrior leader, the Chilwavhusiku Colliery in Bronkhorstspruit, owned by Black Royalty Minerals (BRM), harks back to the country’s past, while at the same time providing inspiration for the future.

Ndavhe Mareda, chairman of the Makole Group, of which BRM is a subsidiary, points out that as a 100% black-owned mine, the company is eager to localise everything about its operations. This means ensuring that the region’s residents, the local businesses and the community surrounding the mine must benefit from it.

“Chilwavhusiku was known as a protector of his people, and we feel our operation can achieve some of that same spirit, helping to uplift the community in the area, providing  jobs and business for the immediate surrounds. This is why we have tied our name back to history, so that what we do will speak to the local community,” he says.

The mine, which began operations in the final quarter of last year, expects to produce between 75 000 and 150 000 tonnes of coal per month, with the bulk going to Eskom, and the balance either to other local entities or to the export market.

Mareda explains that as part of the company’s commitment to job creation, more than 80% of its 350 employees have been sourced from the local community. The same is done when tenders are issued, he adds – those with a local component are given preference. BRM also cooperates with a number of local businesses, particularly those that provide trucking services or the bowsers that provide water for dust control, as well as organisations that provide for staff transportation.

“We are trying our best to broaden empowerment across this community, as much as we can. Furthermore, even though our operation is still in its formative stages, we have offered bursaries to two students from the community to enable them to study at university. This is part of our firm commitment to local development and we plan to intensify our academic support, in both the secondary and tertiary education arenas, moving forward. These students have done really well at school and we aim to encourage them to focus their studies on skills like technology and engineering.”

Junior mining challenges

BRM is part of the Makole Group, continues Mareda, which is a property development organisation. The move into the mining sector is part of the group’s diversification strategy, with BRM placing particular emphasis on the mining of coal, with iron ore, manganese and other minerals also on the radar.

“Africa, after all, has many commodities and mining is thus a cornerstone of African economic activities. With our background in construction and property development, we felt we were well positioned to move into mining, which has many similarities. After all, it also begins with a strategic consulting phase, before moving on to the project-based aspects such as the construction of infrastructure. Therefore we see the move as a perfectly natural one.”

As a junior miner, he suggests that BRM faces the same challenges many other smaller mining companies have to deal with, most notably the issues around the stringent requirements for both technical and financial competence.

“These are generally difficult to achieve as a junior. We were fortunate to be part of a larger group, so BRM was more easily able to demonstrate its competence in the financial arena, while it also had partners to assist it with the technical side. However, many other juniors struggle to prove their financial competence, because they do not have enough history to back it up. And if they are a new business, they will likely not have enough assets to support their claims of competence either.”

This is a challenge the industry needs to look into, he says. “It is equally imperative that the financial services organisations and the developmental institutions like the IDC get involved in such a discussion as well.”

Ultimately, he indicates that the junior miner conundrum here is very much a “chicken and egg” scenario, since in order to undertake a project, you need the finance, but without infrastructure or collateral, you cannot get the finance in the first place. “It is thus clear that more needs to be done to assist the development of junior miners if we are to make the local industry more diverse and representative,” he says.

Representing hope

Looking ahead, Mareda says the company has discussed internally a number of different potential projects, and has now short-listed these to the few that demonstrate the most potential. These include organisations seeking to offload assets and those looking for a black economic empowerment (BEE) partner.

“These are players who are looking for a BEE partner that is capable of raising its own finances and is able to technically develop a project. In other words, they want partners who can add value and who are prepared to put skin in the game as well. We feel that BRM is ideally positioned for such collaborations, because we are quite capable of offering exactly that.”

He adds that while BRM is not in a position to name the projects it is working on or the partners it is in talks with, he expects that the company will be able to give more detail on these in the near future.

“BRM’s story is one that represents hope; it is one that demonstrates that regardless of how small you start, if you remain focused and concentrate, you will be able to make a success of your business. Obviously there will be challenges, but these are there to be overcome. As a 100% black-owned business, we believe our story provides the prototype for how South African stories should be told – it is the story of diversity and, more critically, that of excellence in diversity,” he concludes.

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