Supply chain and procurement

The Supply Chain Department has implemented various safety initiatives in order to contribute to the all-important vision of Zero Harm. The aim of these endeavours is to ensure that suppliers and contractors adhere to the Company’s safety principles and standards at all times. The supply chain scorecards and key performance indicators (KPIs) we use are all aligned with our operational safety standards; and progress on adherence to the standards is discussed monthly by management.

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SUSTAINABLE DEVELOPMENT SUPPLIER AUDITS

To ensure their compliance with the relevant Amplats standards, the Company conducts sustainable development (SD) assessment audits of its on-site suppliers.

During the year the SD team audited 38 suppliers.

Second annual Transport Safety and Sustainable Development Conference

Our second annual Transport, Safety and Sustainable Development Conference was held on 19 September 2012. Attendees included representatives from all our road-transport services providers and our suppliers of dangerous goods.

 

 

 

 

The objectives of the conference were twofold:

  • To reinforce the Amplats safety and sustainable development vision and principles.
  • To enhance safety and sustainable development as a collaborative effort between Amplats, its transport-services providers, and suppliers of dangerous goods who transport products to sites.

The full-day conference included presentations on road infrastructure; trends in, and feedback on, safety and SD audits conducted with transport-services providers; Amplats personnel transport standards; and Company progress on the following:

  • Rollover protection. This covers operator compartment structures (usually cabs or frames) intended to protect equipment operators and motorists against the injuries 
    that may be caused when a vehicle overturns.
  • Supplier parks (transport business centres situated in a common area and sharing services and infrastructure).
  • Criteria for intermodal transportation, which refers to the use of more than one form of transport for a goods journey.

The presenters included subject specialists from the Company and also speakers from Imperial Logistics, Econogistics and the Road Traffic Management Corporation. Two workshop sessions were used to discuss the following:

  • The optimisation of our carbon emissions footprint.
  • The possibility of identifying, and collaborating on, opportunities for local community upliftment.

Supply Chain Department’s safety workshop for small contractors

The Company hosted a safety summit  on 3 August 2012 for a group of 42 black economic empowerment (BEE) and community-based companies that operate in Rustenburg and supply Amplats with products and services. The summit focused on risk assessment; contractors’ safety packs; legal appointments; risk-identification tools; and corporate governance.

Entrepreneur Internship Programme

The chief executive of Anglo American, Cynthia Carroll, made a public commitment in 2012 that Anglo American would create up to 25,000 sustainable new jobs in South Africa by 2015. This announcement was linked to our Entrepreneur Internship Programme (EIP), an innovative enterprise that supports the accelerated growth of high-potential entrepreneurs to create job opportunities and achieve rapid growth in employment size 
and revenues.

The programme, hosted by the Supply Chain Department, saw five emerging entrepreneurs join Anglo American for a 12-month internship in March 2012. It combines experiential learning with industry exposure, mentoring and networking. Together these components help to accelerate the necessary cycle of personal and business-capacity development, confidence and accomplishment that empowers each entrepreneur to translate his or her ideas into a sustainable business. Entrepreneur interns are exposed to Anglo American’s business, the aim being to enable them to start a new local company or grow an existing one, ideally one that supplies goods or services to Amplats. By the end of the EIP experience they will have developed a detailed “go to market” business plan that can be implemented and provide the foundation for a successful business with strong growth opportunities.

The programme’s combination of skills development, mentoring, real-life learning and opportunity identification is providing positive results for everyone involved in it. The EIP is designed to help create sustainable businesses that can lead to meaningful social and economic transformation. Anglo American is also interested in investing in small and medium enterprises that could, given time, build a pipeline of products and services for the Company’s supply-chain needs.

Procuring goods and services from BEE-compliant companies

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By supporting BEE vendors situated in close proximity of its operations, Amplats has continually met its commitment to procure goods and services from BEE-compliant companies. It has been eight years since the Company started to track its procurement spend with BEE-compliant vendors. (See the graph on page 93.)

The figures show that Amplats has been making solid progress with BEE procurement year-on-year. Between 2005 and October 2012, the Company has spent R60.9 billion on such procurement (i.e. 37% of the total procurement spend of R166 billion during this period). Of the R60.9 billion spent on BEE procurement, R16.7 billion was spent in the regions/provinces where the procuring operations are located, representing 11.95% of total BEE spend, while local (less than 50 km from a procuring mining operation) BEE spend was R11.8 billion (8.8% of total spend).

UNDERGROUND MINING TOUR – AFRICA AND AUSTRALIAN REPRESENTATIVES

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Bernadette Mwakacheya (Zambia), Calitha Weeks-Bropleh (Liberia), Vincent Annan (Ghana), Ana Maria Esteves (facilitator), Yaw Asare Appiah (Ghana) and Joseph Abbey (Ghana)

In March 2012, the Supply Chain Department hosted visitors from the Australia−Africa Partnerships Facility (AAPF). The AAPF is an initiative of the Australian Government to facilitate relationships and development co-operation with African governments and institutions, and is a key pillar of Australia’s aid and development programme in Africa. The facility responds to requests from African partner governments and institutions to provide training, study tours, short-term advisory support and funding for capacity-building programmes, particularly in the areas of mining governance, agriculture, and food security and public policy reform. AusAID, the Australian Agency for International Development, funds all AAPF activities.

The objective of the AAPF visit to Amplats was to enable participants from various African countries to gain insight – from the Company’s local procurement and Zimele teams – into opportunities and good industry practice in improving the capability and competitiveness of small and medium enterprises (SMEs), particularly those capable of supporting mining operations. The 18 visitors, from governments, local chambers of commerce and the mining industry in Kenya, Malawi, Nigeria, Tanzania and Zambia, visited the Company’s operations in Rustenburg and described the visit as constructive and informative. As one participant put it, “the host organisations wanted to learn as much from the group as the group wanted to learn from them.”

SUPPLY CHAIN HONOURED

In 2010, Amplats’ transport service provider went insolvent, putting at risk the Company’s supply chain and platinum production. Barloworld Logistics was appointed to provide a solution. Since then, it has moved more than 80,000 tonnes of concentrate per month, at service levels exceeding 98%. The team has optimised costs and aligned itself with operational requirements, achieving a 15% reduction in operating costs per annum. Ninety employees from the communities close to the mines have been upskilled and empowered, world-class risk-management and safety processes have been implemented, and strategic relationships with key service providers have been formed.

In 2012, Amplats won the prestigious gold award jointly with Barloworld Logistics at the 24th annual Logistics Achiever Awards. These are the benchmark logistics and supply-chain-industry awards recognising excellence and outstanding performance in sustainable supply-chain solutions in South Africa.

Gary Ditchfield, operations supply chain manager for Amplats, commented: 
“A key part of Platinum’s strategy to achieve its vision is to conduct its business safely, cost-effectively and competitively. In support of these goals and strategy, the team delivered a smart supply-chain solution that is flexible, agile and responsive to the continually fluctuating supply and demand of platinum as well as to the complexities of both the transport network and the operating environment.’’

Francois van Rensburg, divisional director at Barloworld Logistics, had this to say: ‘’These results can only be achieved through a mutual vision, a strategic partnership and collaboration with all stakeholders. The entire solution is built on a culture of operational excellence, continual improvement and innovation, the results of which provide ongoing service and cost enhancements to Platinum.” The solution achieved with Barloworld Logistics is also scalable, and replicable in other, similar operations.

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BEE spend in 2012

In 2012, the Company spent R20.6 billion on procurement, of which R11 billion was with BEE-compliant companies, representing 53.4% of the total procurement spend. Of this 
R3.4 billion was spent in the mining regions/provinces, representing 16.7% of total procurement, while R2.8 billion was spent in areas that are less than 50 km from the procuring mining operations, representing 13.5% of total procurement spend.

Envisaged BEE spend in 2013

Although we have made significant progress in terms of procurement from BEE enterprises, we realise that we are still not having enough of an impact in terms of creating procurement opportunities in the communities close to our mines or within our labour-sending areas. It is with this in mind that the supply chain is refocusing in 2013, to accelerate the development of supplier companies within these areas.

Anglo Zimele

Anglo Zimele, Anglo American’s enterprise development arm, began to fund black economic empowerment (BEE) transactions from as early as 1998.

From 2008 to 2012, Anglo Zimele’s four funds have provided R708 million in funding, supported 1,393 companies, and completed 1,972 loan transactions. Furthermore, funded businesses have employed 25,364 people, and achieved a collective annual turnover of R3.47 billion.

Zimele is recognised as an integral part of the way we do business, and this in turn enables us to take a holistic approach to enterprise development.

These aspects have resulted in Zimele being recognised as a global leader in enterprise development. The Zimele formula has been adopted by both the International Finance Corporation and the United Nations Development Programme.

We have ensured that Zimele’s enterprise development model is made more visible and accessible through a corporate centre that is supported by a national footprint of 31 small-business hubs, with experts always on hand to offer professional advice and other services to existing or potential entrepreneurs, through every step of their business journey.

Anglo American also fully recognises the vital importance of partners, and collaborates with a number of key stakeholders in order to achieve its enterprise development objectives. It is this very approach, over a period of 23 years, that has enabled Anglo American’s enterprise development philosophy to grow into the successful model it is today.

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ASSISTING LOCAL SUPPLIERS

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William Baloyi, Kevin Kwakwa, Baston Manyaka, Justice Nyaka, Jimmy Machoga, Jeremiah Chimika and Pfunzo Maluta

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Cynthia Tloubatla, Makinta Masenya(owner), Portia Ramashala, Johannes Nkgoeng, Doctor Tobane, Lucy Sebatana and Joseph Ramotebele

 
Makinta Mahlako Transport and 

Projects CC is a business wholly owned by Mr Makinta Esrom Masenya, who lives at Ga-Molekane village, less than a kilometre from Mogalakwena Platinum Mine. The company was registered in 2008 and started operating in 2011, with welding and building as its core activities. Currently, Makinta Mahlako Transport and Projects CC is carrying out plant maintenance at the mine.

Makinta Masenya originally approached the Anglo Zimele Communities Fund in January 2012, regarding an order for the manufacture and installation of guard rails. The fund financed the CC’s first loan to the amount of R236,542, which was repaid within three months. Zimele has also financed a Hyundai light-delivery vehicle worth R209,000 and repayable over three years, and the building of a parking bay costing R476,000. This most recent loan will be settled at the end of January 2013.

Having begun to work for Amplats for an order valued at R17,000, Makinta Mahlako Transport and Projects CC had accumulated company orders totalling approximately R3 million by the end of 2012. The business, which started to operate from Mr Masenya’s home with three employees, was employing 22 people and renting two workshops 
in the industrial area of Mokopane by October. All its employees are recruited from the local mining communities. The staff members consist of 18 young people, three of whom are women. Only four employees are older than 35 years of age. In the short space of time 
since it started supplying services for Amplats, Makinta Mahlako Transport and Projects CC has also invested in assets such as vehicles, an overhead crane and welding machines.