Inclusive procurement and enterprise and supplier development at Impala Platinum Holdings Limited
Impala Platinum Holdings Limited (Implats) is one of the world’s foremost producers of platinum and associated platinum group metals (PGMs). Core to the group’s ethos is its belief that preferential procurement and investment in enterprise and supplier development (ESD) provide important opportunities for promoting social and economic transformation in South Africa.
Creating shared value through its supply chains is a key enabler to reduce poverty, unemployment and inequality. The inclusion of small, medium and micro enterprises (SMMEs) in its value chain is essential to building sustainable vibrant communities post mine closure.
Across all of its operations, this world leading PGM producer has implemented targeted local procurement and ESD initiatives aimed at promoting local employment and socio-economic benefits.
One example of this is its initiative to provide SMMEs with preferential early payment terms to help them manage their cash reserves.
The Group’s improved operational performance and the positive price environment for palladium and rhodium also support its efforts to increase local procurement opportunities in the face of increasing expectations from the local mine-host communities.
Increasing preferential procurement opportunities
In advancing inclusive procurement in South Africa, Implats’ ESD activities are a critical enabler for increasing preferential procurement opportunities. Impala Rustenburg and Marula have endeavoured to align their procurement activities and targets with the transformation objectives and expectations of the 2018 Mining Charter (Mining Charter III or ‘the Charter’) and B-BBEE codes.
The Charter places a significant focus on procurement spend with South African women-owned and South African youth-owned suppliers (51% or more owned and controlled). It also focuses strongly on creating South African manufacturing capability by including a 60% local – content requirement in the procurement scorecard.
Supplier support
As part of Implats’ ongoing eff orts to transform its supply chain, last year saw 18 new operational term contracts being awarded to 51% or more HDP-owned and controlled companies. Eleven of the contracts were awarded to women-owned and controlled companies and range from the supply of timber products and early warning instrumentation devices for underground rock monitoring to the rehabilitation of old shafts. Marula has established a platform known as the Marula Business Forum (MBF) to enable local BEE-compliant businesses, especially those that are youth and women-owned, to access potential business opportunities.
Promoting local community procurement
Implats strives as far as possible to source goods and services from local businesses defi ned as tier 1, 2 and 3 based on their proximity to operations. All procurement teams place a significant focus on supporting local-to-site (tier 1) suppliers; these are enterprises that are owned by host community members.
In 2020, Implats local procurement spend was 32% of the total discretionary procurement spend. This was one percent lower than in 2019, with the impact of the lockdown affecting the excellent progress that the Group had made in increasing local-to-site procurement year-on-year since 2017.
Supporting community-based entrepreneurs
Implats ESD initiatives provide important opportunities for host community-based entrepreneurs to develop and become sustainable enterprises that can provide Implats operations with high quality goods and services. Its current ESD activities are focused on increasing participation of new black-owned companies (with the emphasis on youth and women-owned enterprises) from host communities. Implats also hosts sourcing (tender) events which provide opportunities for local businesses to participate in the company’s supply chain through formal fixed-term contracts.
Enhancing procurement opportunities, specifically in neighbouring communities, is important in creating sustainable communities, improving community relations and advancing local economic development.
In 2020 a total of R5.4 million was spent on enterprise development in South Africa. Of the total discretionary procurement spend, 32% (or R2.7 billion) was with local tiered suppliers in which BEE ownership was greater than 25%. The founders of 1 122 SMMEs were trained and mentored through the programmes offered by Accuracy and Classic Oriental Consulting in Rustenburg and the Centre for Supplier Development in Marula has resulted in increased business knowledge among participants and contributed to more than R52 million worth of Implats procurement opportunities for small businesses.
Implats provides enhancing procurement opportunities, specifically in neighbouring communities, is important in creating sustainable communities, improving community relations and advancing local economic development.
Implats’ ESD activities focus primarily on supporting local and black-owned businesses and are designed to ensure compliance with regulatory expectations, contribute to socio-economic development in neighbouring communities and build a more robust and competitive supply chain for the Group.
