8th Annual Investing in African Mining Seminar Monday December 1, Socio Economic Aspects in Africa Hindrance or Enabler?

Transcription

1 8th Annual Investing in African Mining Seminar Monday December 1, Socio Economic Aspects in Africa Hindrance or Enabler?

2 2 Contents 1. About Hatch Goba 2. Socio-Economic Aspects 3. Supplier Development 4. Case Study in South Africa

3 3 Contents 1. About Hatch Goba 2. Socio-Economic Aspects 3. Supplier Development 4. Case Study in South Africa

4 4 About Hatch Hatch is Employee-owned Serving mining & metals, energy and infrastructure for more than 80 years Projects in more than 150 countries More than 11,000 professionals worldwide More than US$35 billion of projects under management EPCM, integrated teams, project and construction management Provides consulting, design engineering, technologies, environmental services, operational services, and project and construction management to the global mining, metallurgical, energy and infrastructure sectors. International reputation for introducing innovative and reliable processes and equipment to client production facilities

5 5 Global Operations 11,000+ staff May 2013 CANADA Calgary, Alberta Halifax, Nova Scotia Mississauga, Canada Montréal, Québec Niagara Falls, Ontario Oakville, Ontario Saskatoon, Saskatchewan St. John s, Newfoundland & Labrador Sorel-Tracy, Québec Sudbury, Ontario Toronto, Ontario Vancouver, British Columbia Winnipeg, Manitoba EUROPE London, England Moscow, Russia St. Petersburg, Russia CHINA Beijing Shenyang Shanghai Amherst, New York Baltimore, Maryland Boston, Massachusetts Buffalo, New York Cleveland, Ohio Denver, Colorado Houston, Texas Millburn, New Jersey USA New York, New York Pensacola, Florida Phoenix, Arizona Pittsburgh, Pennsylvania Sacramento, California San Diego, California San Francisco, California Seattle, Washington Tampa, Florida SOUTH AMERICA Antofagasta, Chile Belo Horizonte, Brazil Lima, Peru Rio de Janeiro, Brazil Santiago, Chile São Luís, Brazil São Paulo, Brazil MIDDLE EAST Abu Dhabi, UAE Al Khobar, Saudi Arabia Sohar, Oman SOUTH AFRICA Johannesburg Pretoria Cape Town AUSTRALIA Adelaide Brisbane Gladstone Mackay Melbourne Newcastle Perth Townsville Wollongong INDIA New Delhi INDONESIA Jakarta NEW CALEDONIA Nouméa

6 Hatch in Africa 6 Hatch Goba Hatch Goba is part of the Hatch Global Group of companies Provide full service to clients in the mining, energy and infrastructure sectors. 1,428 technical and support resources in 8 offices and project and site offices in the region Active in 17 countries on the African continent centred in Southern Africa Full range of services; Concept planning, Basic and final engineering design Project management Construction management. Sectors; Mining & Metals Power Public and Industrial Infrastructure

7 7 Our Business Units metals COAL INDUSTRIAL MINERALS IRON & STEEL IRON ORE LIGHT METALS MINING & MINERAL PROCESSING energy NUCLEAR OIL & GAS RENEWABLE POWER THERMAL ENERGY TRANSMISSION & DISTRIBUTION infrastructure INFRASTRUCTURE SERVICES PORTS AND MARINE TERMINALS RAIL WATER AND TAILINGS ROADS & TRANSPORTATION BUILDINGS & STRUCTURES NON-FERROUS

8 8 Contents 1. About Hatch Goba 2. Socio-Economic Aspects 3. Supplier Development 4. Case Study in South Africa

9 What do our clients need? 9 Public Sector Clients How to service growing urban population: Housing, Utilities, Amenities Preventing Social Unrest Funding and Integrating Budgets Streamlined and Effective Delivery Geo Political Alignment Private Sector Clients Product to Market Gateway Logistics. Commercial Services to Urban Population Retail, Offices etc Meeting socio economic and environmental needs. Financial Market. Local development supplier development. Country risks.

10 Key Considerations 10 Mining has a finite resource. It will come to an end ultimately. Have the end objective in mind with respect to socio economic development in mining. Create interdependencies with local communities and not dependencies. Engage timeously, openly and with honesty Capacity to deliver on community and governmental expectations. Do it incorrectly and; Infrastructure will fall apart. Home ownership not transferred to the community will become worthless and derelict. If local suppliers are not developed as a secondary industry in the mining community, the businesses will fail on mine closure. A dependent society will be created. Do it correctly and; Become part of the local spatial plan and will be used by the community at large. Sustainable home ownership transfer Local suppliers will add to the growth of the local industry. An inter-dependent society will be created Reference: The Socio Economic Aspects of Mine Closure and Sustainable Development: Guideline for the Socio-Economic Aspects of Closure: Centre for Sustainability in Mining and Industry (CSMI) University of the Witwatersrand: January 2010

11 11 Vision for mining Establish a flourishing local economy to provide a diversity of sustainable jobs, that is aligned with broader government planning processes; This would include the Local Economic Development Plans and Spatial Development Plans Effective engagement and participation by local people, groups and businesses, especially in the planning, design and long term stewardship of their community Take into consideration the mine s Social and Labour Plan, The initial closure plan required in the Environmental Management Plan, through to the final closure plan as part of the formal closure process. Reference: The Socio Economic Aspects of Mine Closure and Sustainable Development: Guideline for the Socio-Economic Aspects of Closure: Centre for Sustainability in Mining and Industry (CSMI) University of the Witwatersrand: January 2010

12 12 Contents 1. About Hatch Goba 2. Socio-Economic Aspects 3. Supplier Development 4. Case Study in South Africa

13 Successful Supplier Development (SD) Programs Helped Build Stronger, Broader, Sustainable Local Supply Bases 13 SD Program Local Global Global Local Skills development Technology transfer Capacity expansion financing Buy local incentives / obligations Local friendly packaging strategy Exports facilitation

14 But If Improperly Planned or Managed, SD Programs Fail and Instead Lead to Local Value Destruction 14 Disillusioned, angry communities Inadequate Quality Schedule slippages SD Programs Wasted public / shareholder s money Owner cost overruns Operations disruptions

15 Hatch Local Supplier Development (SD) Services 15 SD Program Initiation SD Strategy Design Local Supplier Assessment Local Supplier Improvement Local Supplier Engagement SD Program Monitoring

16 Example of Local Socioeconomic Development Studies Completed by Hatch 16 Elliott Lake region, Ontario, Canada Ø Regional development plan and implementation program for former uranium mining area with local businesses, major mining companies, government scientific institutions and university. Worked with small local businesses to develop/ implement business plans British Columbia, Canada Ø With Hatch economist developed provincial, regional and local impacts of new investments in several industries and how to develop a program Czech Republic Ø Worked with a quasi government agency to identify roadblocks in attracting international industries to invest in the county and potential policy options Mauritania Ø Assisted mining client to identify the supply segments with potential for development through a major capital project and design the SD

17 Hatch Global Procurement Is Ideally Positioned to Connect Local And Global Suppliers 17 Hatch Global Procurement Team Global Suppliers Local Suppliers

18 18 Contents 1. About Hatch Goba 2. Socio-Economic 3. Supplier Development 4. Case Study in South Africa

19 19 SUSTAINABLE DEVELOPMENT (SD) Introduction to the Project Hatch Goba is actively involved in a Resettlement Project: Relocation of people Sustainable Development is critical to the success of the Project, the Mine, and the Corporate entity Sustainable Development in the Project focuses on Recruitment, Training and Small, Medium and Micro Enterprises Development

20 SUSTAINABLE DEVELOPMENT MODEL: Model provides the basis of Implementing SD 20 Negotiations by SD Manager to ensure employment activities are distributed to local people affected by the project EMPLOYMENT TRAINING Financial Health Awareness Construction Skills Tender Processes Business Health Contracts Administration Skills and Business Development of Small, Medium and Micro Enterprises (SMME) Identification of local contract opportunities SMME DEVELOPMENT OTHER SD PROJECTS Projects related to Environmental and Social Sustainability for example maintenance of solar geysers

21 21 SUSTAINABLE DEVELOPMENT Project Challenges To Identify sufficient SD opportunities within a short time period To identify opportunities that are sustainable on a long term basis and to be successful after completion of the Project To link identified opportunities with existing SD Programmes To meet the local community s needs To align SD with the Project Schedule and Costs

22 22 SUSTAINABLE DEVELOPMENT Recent Press Coverage

23 23 SUSTAINABLE DEVELOPMENT Recent Press Coverage Property value increase from ZAR 27 million to ZAR 326 million. Single business increase from ZAR 90 k to ZAR 1.2 million. Phase 1 Dec Final relocation by years of consultation.

24 24 SUSTAINABLE DEVELOPMENT Case Study - Key Statistics Relocation of the complete community for mine expansion. Initial phase includes 71 homes, two churches and guest house business Full relocation of: people, 500 new homes, 24 businesses, educational and medical facilities, a satellite police station and related infrastructure, seven churches (serving 16 church denominations), a town hall and offices community centre, Social infrastructure inlcuding roads, parks, an environmentally-friendly water, energy and sanitation supply Extensive consultation process with the community and other stakeholders, Value of their properties increase on average more than tenfold The difference in rates and taxes and water tariffs paid by client. The relocation plan includes training and educational programmes, as well as small enterprise development. Client quote: We are dealing with people and their homes and will approach any challenges with sensitivity and empathy,

25 SD Core Team Board Sponsor Global Lead Hatch Local Supplier Development (SD) Organization Global SD framework Global SD partnerships SD tools SD Best practices SD Knowledge sharing Global client interface SD Regional Teams 25 Mgmt Operational Consulting Performance Communities Procurement SD local knowledge SD framework localization SD local partnerships Local client interface SD services delivery Learning Systems

26 26 Questions? For more information, please Contact me at or visit