South Africa finds itself in an economic slump, which has been exacerbated by the arrival this year of the coronavirus. A position paper published recently argues that mining could improve the country’s financial outlook while also helping to achieve its social objectives, and this can be achieved by following a strategy that focuses on localized procurement.
The mining industry in South Africa was one of the first sectors to be allowed to start operating again earlier this year as lockdown regulations were gradually relaxed. Some sectors in fact were allowed to operate throughout, such as collieries and refineries. Mining can continue to play this dominant role, as South Africa deals with the effects of the pandemic and plans for the future.
In an address to the Investing in African Mining Indaba conference in Cape Town in 2019, President Cyril Ramaphosa told delegates that “mining companies have an opportunity to create broader social value in a way that also enhances the success of their business”. This sentiment is entirely justified, says François Ribeiro dos Santos, a partner at global management consultancy Kearney.
“In our position paper, we explain that capturing and sustaining a competitive advantage will require embracing a shared value agenda – one that benefits not only the mining companies, but also the communities in which they operate.”
He says a localisation strategy is needed, one that addresses the national priorities of inclusive growth and transformation.
“Procurement can be the driver and enabler for this transformation, following what we call a “AAA road map” to design a winning procurement mandate:
- Assess – Create value by doing the right things;
- Adapt – Maximize value by doing things right; and
- Align – Capture value by doing things the right way.”
Kearney’s paper also argues that forward-thinking organisations assess the full social impact of their localisation strategies by defining the key performance indicators, measuring the interaction of business and social results.
“The mining industry is of vital strategic importance, especially now. It has a duty to play a central role in helping South Africa achieve its social and economic objectives. We believe that forward-thinking mining companies will commit to a transformation with inclusive growth.
“A localisation strategy will help the sector reach this goal,” says Dos Santos. The paper is available for download or reading at this link.