African Business Review - April 2015

April 2015 • www.africanbusinessreview.co.za

88mph Startup funding for Africa’s tech entrepreneurs LEBARA Backs up ambitious plan with calculated strategy

Transnet Invests In Africa’s Export Infrastructure

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EDITOR’S COMMENT

Infrastructure And Mobile Technology Drive Africa’s Growth A V E R Y W A R M W E L C O M E to the April Edition

of African Business Review. Our cover story this month tracks the progress of South Africa’s mighty infrastructure giant Transnet. The state owned company is playing a crucial part in the realisation of the government’s key objective to reduce inequality, which will be achieved by rolling out investments across strategic infrastructure projects. This is planned to provide skilled jobs and boost the profile of host communities whilst leveraging South Africa’s infrastructure to compete at the global stage.

In this issue we explore how the growing mobile telecommunications market is providing better services for customers, and improved opportunities for entrepreneurs and investors. The international mobile network Lebara has experienced astronomic growth over the past 14 years and has a detailed strategy backing up ambitious plans for the future. We also look at 88mph, dedicated in its focus on developing mobile app startups through a network of experienced entrepreneurs.

Enjoy the issue!

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Features

CONTENTS

LEADERSHIP

SUPPLYCHAIN

Lebara backs up ambitious plan with calculated strategy

Cargo Handling: A key port logistics function for South Africa’s inward and outward trade

14 8 FINANCE Startup funding for Africa’s tech entrepreneurs

18 5

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CONTENTS

76 70

24

Transnet

Kengen

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Company Profiles SUPPLY CHAIN 24 Transnet

ENERGY

88 Dundee Precious Metals

70 Association: Integrating Renewables through Energy Storage 76 Kengen

MINING 88 Dundee Precious Mining

7

LEADERSHIP

LEBARA

backs up ambitious plan with calculated strategy The group is to focus on its core African market on journey to reach one billion people by 2020 W r i t t e n b y : N Y E LO N G M A N

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LEADERSHIP SINCE ITS FOUNDATION in 2001 by three friends, Lebara has seen consistently high annual growth as it expands ceaselessly across fresh territories and develops new technology for its customers. Covering much of the African continent, the company provides fixed rate mobile and landline rates as well as dedicated multilingual customer services. It has won nearly 40 industry awards across a range of sectors including

‘As part of its recent operations, the company has recruited an enviable roster of top-level talent to oversee their expansion into new sectors. The long list of talented executives includes international experts from media, telecoms, and global finance’ 10 April 2015

the coveted Mobile News Awards Best Mobile Virtual Network Operator (MVNO) for four consecutive years.

Building on its seemingly endless success, Lebara is seeking to expand from telecommunications into media and financial services and has already recruited a number of CEOs to oversee the venture. The company recognises that a highly skilled, motivated and loyal workforce is absolutely crucial to maintaining its position as the most

L E B A R A : A M B I T I O U S P L A N W I T H C A L C U L AT E D S T R AT E G Y

well-known and trusted international mobile telephone network.

Directing its network from London provides Lebara with access to the best talent in one of the world’s most metropolitan cities. The ultimate goal of Lebara’s expansion plan is to reach one billion people by 2020 and a significant portion of that group will be made up of Africans, with the population expected to swell to over 900 million by that time.

London gives the company access

to a culturally and linguistically diverse pool of potential talent; according to the 2011 census 37 percent of the city’s population was born outside the UK, with seven percent hailing from the African continent.

London also has large numbers of Arabic speakers, as well as significant Somali, Nigerian, and Ghanaian communities. Whilst real estate costs will always be high in the city, being able to source fluent, natural foreign language speakers for their international customer service roles is priceless.

Smartphones have enabled millions of Africans to access the internet when conventional connections would not be financially possible, or may be inhibited through the limitations of local infrastructure. Aside from simple telecommunication, many people across the continent use the internet in order to manage their finances securely as ATM machines are far from widespread.

The large African expat community means there is an ever increasing demand for a quality international network such as Lebara. As part of its expansion the company has released an app called Lebara Talk 11

LEADERSHIP which allows for in-app or online top up which is set to be taken up by many users across Africa.

Lebara’s ability to acquire new talent rests on its solid reputation for delivering excellence to both customers and employees. When it won the Best MVNO category in 2013, it was recognised for providing a ‘great employee experience’.

Similarly, its award for best Large Contact Centre recognised its innovative approaches to recruitment, training, staff development, and performance management.

As part of its recent operations, the company has recruited an enviable roster of top-level talent to oversee its expansion into new sectors. The long

list of talented executives includes international experts from media, telecoms, and global finance.

A worker at Lebara is not simply an employee; they are an individual stakeholder in the company with the motto “Act as if you own the company” working as a touchstone for every action they take, encouraging an enhanced sense of direction within its teams. This ethos encourages members of the team to make their own decisions.

The most practical example of this is seen in its call centres, where operatives have no fixed time limit for any customer. Since many Lebara subscribers may not be in their country of origin when they make a

‘Its award for best Large Contact Centre recognised its innovative approaches to recruitment, training, staff development, and performance management’ 12 April 2015

L E B A R A : A M B I T I O U S P L A N W I T H C A L C U L AT E D S T R AT E G Y

Lebara helps connect Africa to the world call, it is vitally important that they are put through to a representative who can make time for their requests.

Despite often lacking adequate infrastructure or financial means Africans have adapted available technology to suit their needs of its people. Mobile phones now substitute fixed computer technology in many instances and enable Africans to access the power of the internet

speedily and with convenience.

Ultimately, Lebara’s goal to reach one billion people worldwide is certainly very ambitious, but not unachievable.

Finding ways to improve services across the continent would be a worthy challenge for the company to undertake and has the potential to help Africans become more connected to the world than ever before thanks to Lebara mobile services.

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S U P P LY C H A I N

Cargo Handling

A key port logistics function for South Africa’s inward and outward trade The opening of a new maritime hub at Durban shows the way to operational excellence at a time of very rapid expansion and investment in infrastructure.

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April 2015

OF COURSE IT is not just South Africa’s own economic development that depends on the ports, general and specialised, that ring its coast from Ngqura in the east to Saldanha in the west. Landlocked nations like Zambia, Zimbabwe, Botswana and Swaziland rely on South African ports for the lion’s share of the minerals they

export and the goods they import.

All of these countries are expanding their trade rapidly, as Africa wakes up to its new role as a major presence in the global economy. However South Africa, always the dominant power in the region continues to lead the way, improving its infrastructure to meet the demands placed on it by 21st century realities. Transnet, the governmentowned body responsible among many other things for the railways and ports, is now three years into its seven year Transnet Market Demand Strategy (MDS), focused on a 7 year capital investment nationally in South Africa, with a projected total spend of $25.5 billion.

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S U P P LY C H A I N To keep up with the improvements it is making, contractors and supplier are having to step up the mark as never before. Over 90 percent of the import and export trade in southern Africa is carried out using sea routes.

Consequently, the ports in the region play a very important role for the economies in southern Africa. But no matter how fast materials for export can be got to the ports, or to what extent the increased capacity of container and bulk cargo ships grows, the flow of goods will not improve till the quayside facilities are able to cope. That is why the opening of a new African maritime hub by a major materials handling partner is a significant event.

Transnet operates more than 60 cranes, 13 mobile harbour cranes, 31 ship to shore container cranes and 18 rubber PHOTO: Left, Mr. Dieter Schmid - MD Liebherr Africa (Pty) Ltd., Centre, Mr. Henner Rodenwoldt Division Manager Maritime Cranes - Liebherr Africa (Pty) Ltd. Right, Mr. Pat O’Leary, MD- Liebherr Maritime Cranes.

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April 2015

tyre gantry cranes supplied by Liebherr-Africa (LAF), a wholly owned subsidiary of the German Liebherr Group which is made up of more than 130 companies worldwide though its headquarters are in Switzerland.

Liebherr Africa has been serving the needs of the local mining, construction and civil engineering industries for more than 57 years. A Supplier Development (SD) agreement between Transnet and Liebherr is the latest expression of their long partnership. In fact it was largely as the result of the close

LIEBHERR AFRICA : CARGO HANDLING

cooperation with Transnet over the past few years that LAF decided to extend its activities and to establish a specialised maritime hub in Durban, the largest and busiest shipping terminal on the African Continent.

Placed in a central position, the hub ensures that Liebherr’s Africa based clients are getting the same level of service and support as could be expected when dealing directly with the head office in Europe. With this hub, Liebherr Africa covers a variety of different requirements of mining companies, which need adequate infrastructure and competence to ship mineral resources as well as equipment into and out of adjacent countries. “The investment in the new African maritime hub is very important for the maritime industry in southern Africa,” says LiebherrAfrica Maritime Cranes Divisional Manager Henner

‘The investment in the new African maritime hub is very important for the maritime industry in southern Africa’ Rodenwoldt. “It ensures fast and high quality customer service in terms of maintenance, spare parts supply and personnel training.”

The new African maritime hub is peopled by sales, service and training personnel, who are all factory trained.

It also holds a significant spare parts stock to service a large part of the African market. An important service is the training of operators, technicians and service staff, with two separate classrooms for crane-related training.

Simulation methods are used for theoretical and maintenance, as well as operator training on ship to shore cranes, mobile harbour cranes, rubber tyre gantry cranes and offshore cranes.

By installing facilities to this standard Liebherr is showing its customers within the continent, the shipping companies, and above all Transnet that it is taking Africa seriously.

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FINANCE

Startup Africa’s te

88mph has just hosted a week-lon to kick start Africa’s high growt W ri t t e n b y: N

p funding for ech entrepreneurs

ng investment & coaching workshop th web and mobile app companies y e Lo n g m a n

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FINANCE 88MPH HAS SIGNIFICANT investment experience which has provided it with the insight to see that mobile and web applications can have a significant positive social impact, as well as impressive growth potential in emerging markets. The group’s financial expertise and business acumen has been put to use since 2011, supporting the growth of a range of innovative applications developers. It has bases in Lagos, Cape Town and Nairobi, with a general focus on the sub-Saharan region of the continent. The group uses its contacts and vision to bring together entrepreneurs and investors in a way that is more reminiscent of Europe or the USA, putting it at the forefront of innovation on the continent.

88MPH: Nairobi

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April 2015

Its website provides a bold statement of vision, stating its main focus is attracting the best entrepreneurs, investing seed cash, and bringing them to a point where their businesses can grow independently, or be adequately evaluated by angels and VCs. Being independent is especially important in Africa, as credit is often very difficult to come by, and experienced insight can often be just as rare.

The main team of entrepreneurs consists of top t alents from a variety of high growth sectors, including investment companies, ecommerce, B2B platforms and financial services.

The breadth of the company’s experience provides investments with the market-disrupting influence so close to the spiritual heart of the entrepreneurship ethos.

An example of its successfully targeted investment strategy can be seen in their support for Graphflow, utilising funds from Microsoft and Google. The SaaS app developer now boasts a customer recommendation feature, in addition to targeted advertising, and an ecommerce analytics function. Whilst offering a return for investors, the startup

S TA R T U P F U N D I N G F O R A F R I C A’ S T E C H E N T R E P R E N E U R S

The video from the 88MPH launch day

‘Our main focus is attracting the best entrepreneurs, investing seed cash, and bringing them to a point where their businesses can grow independently’

supports the growth of small businesses by enabling them to exploit its technological insights for free.

Having successfully run an accelerator model with projects such as Graphflow for the past three years, 88mph is building on its experiences and launching ‘Deal Week’ which is a week-long intensive workshop that focuses on developing and troubleshooting a choice of the best startup ideas. Successful ventures will receive, alongside vital advice and support, investments ranging 21

FINANCE

‘Entrepreneurship is leading the way and allowing Africans to create their own wealth, reducing reliance on capital from large multinational corporations’ from $25,000 to $250,000 in order to get them off the ground. The process that 88mph shares with its successful entrepreneurs uses lean online canvassing sessions and the setting up of management accounts, overseen by their due diligence checklist (developed using the past three years’ experience) and hosted in their dedicated Cape Town Garage.

Earlier this month it was announced 22

April 2015

that another startup in receipt of 88mph investment had successfully expanded its reach outside of the African continent. In 2013, ApexPeak CEO Gakim Solomons presented a business model to the investors that coincided with their social vision for the continent. His company took the 88mph vision and applied it to

S TA R T U P F U N D I N G F O R A F R I C A’ S T E C H E N T R E P R E N E U R S

finance; their specific aim of providing SMEs in developing markets with short-term funding is a model that has the scope to change the face of the funding climate in Africa forever.

Its acquisition of UAE-based financial technology company Cashnomix has given the startup a greatly increased presence in the Middle East, a location for several emerging markets. This purchase has specifically allowed ApexPeak to acquire a risk calculation algorithm that will enable the company to achieve its goal of providing a stable, risk-assessed short term source of funding for its customers.

Smartphone use on the continent has boomed in recent years as the costs of technology continue to fall, and investment in telecommunications infrastructure continues to rise. By the end of the decade, it has been estimated that there will be upwards of 900 million service subscribers on the African continent. Investment in mobile application technology is therefore proving to be very lucrative for groups such as 88mph. Not only do startups provide a potential stimulus for job creation but they can also allow someone with the right combination of willpower and foresight to rollout

88MPH: Cape Town

88MPH: Lagos beneficial technology to some of the continents most deprived areas.

Entrepreneurship is leading the way and allowing Africans to create their own wealth, reducing reliance on capital form large multinational corporations, which can often come with strings attached.

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The infrastructure of success: Transnet investment supports growing South African economy Written by: Nye Longman Produced by: Dennis Morales

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TRANSNET

Across the board, Transnet is investing in infrastructure projects targeted at increasing the country’s economic competitiveness while ensuring opportunity and security for the communities of South Africa 26

April 2015

T

ransnet in some form or other has provided infrastructure support to South Africa and the neighbouring region for well over a century. The company has always followed market trends, laying tracks northwards in the late nineteenth century after gold deposits were discovered in the Transvaal Republic. Since then the company has remained under state ownership and supervision, gaining control of oil pipelines and port authorities while retaining its control of freight rail. Supply Chain Director, Garry Pita

S U P P LY C H A I N

explained the company played “a vital role not only in everyday life, but in the national economy and economics of several other African states that use the networks and harbours within South Africa to transfer their imports and exports.�

Brian Molefe is the GCE of Transnet, which includes Transnet Port Terminals, Transnet

Operations: With such a wide remit, Transnet has its work cut out in securing results for users, meeting government targets and keeping its own employees happy. In order to coordinate this

National Ports Authority, Transnet Freight Rail, Transnet Engineering and Transnet Pipelines

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Experience the The most advanced maritime cranes boost South Africa’s cargo handling.

Liebherr Afrika (Pty) Ltd. 2 Kubu Ave. Riverhorse Valley Durban North 4071, South Africa maritime.cranes@liebherr.com facebook.com/LiebherrMaritime www.liebherr.com

progress. from Liebherr

SUPPLIER PROFILE

LIEBHERR MARITIME CRANES

Liebherr Maritime Cranes is a division of the Liebherr Group and currently employs more than 3,700 employees worldwide.

Liebherr Maritime Cranes specialises in cargo handling solutions for ports as well as for the shipping and offshore industry.

Liebherr Africa (LAF) is a fully owned subsidiary of the Liebherr Group which comprises more than 130 companies worldwide. Present since 1958 in South Africa, LiebherrAfrica is serving the needs of the local mining, construction and civil engineering industries for more than 57 years.

Contact: Henner Rodenwoldt Division Manager - Maritime Cranes Liebherr-Africa (Pty) Ltd P.O. Box 40033 2 Kubu Ave Riverhorse Valley Durban North 4071 Tel: +27 (0) 31 010 0310 Fax: +27 86 754 6677 Email: Henner.Rodenwoldt@liebherr.com Website: http://www.liebherr.com/en/deu/products/maritime-cranes/ maritime-cranes.html

TRANSNET

S U P P LY C H A I N

vast and sometimes convoluted network of operations, Transnet adheres to directives issued by the Department of State Enterprises, including the New Growth Path (NGP) and the National Development Plan (NDP) These initiatives seek to restructure the South African economy in order to reduce inequality and poverty through the promotion of quality work opportunities.

The backbone of this economic driver will be supported a strong infrastructure system of rail, ports, and pipelines, so the support Transnet provides is absolutely vital.

Through its commitment to these government initiatives, Transnet is looking to create new jobs across the South African economy and reduce the total cost of doing business

Mr Garry Pita, Supply Chain Director

Transnet offers a broad range of job opportunities for its workforce

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Technology leader Maximized customer benefit Turnout system solutions for Africa and

voestalpine VAE SA (Pty) Ltd 23 Anvil Road, Isando 1600, South Africa Tel: +27 11 928 3700, Fax +27 11 928 3910 sales.VAESA@voestalpine.com www.voestalpine.com/vaesa

the rest of the world

SUPPLIER PROFILE

voestalpine VAE SA (Pty) Ltd voestalpine VAE SA (Pty) Ltd is the approved and preferred supplier in South Africa, and Africa, for all permanent way rail, ranging from high speed mainlines, urban traffic, heavy long-distance iron-ore and coal haulage and underground trackwork. Our commitment extends beyond products and services as it provides complete solutions from site-specific design, manufacturing and pre-assembly through to installation. Our guaranteed quality is benchmarked against world-class best practice. voestalpine VAE SA’s is a company within the voestalpine AG Group, a leading European processing corporate with its own steelmaking facilities and its headquarters in Austria. The Group has four divisions, Steel, Automotive, Railway Systems and Profilform, which all occupy top positions in their respective markets. The voestalpine Group resolutely seeks and ardently follows new paths in innovation, whilst focusing on lasting benefit for its customers, shareholders and employees.

In Southern Africa the major customers are the national railway operators, private siding owners, the mining industry and companies who have installation and maintenance contracts with various infrastructure owners.

Management: David Marite, CEO Address: 23 Anvil Road, Isando, 1600, PO Box 774, Isando, 1600 Tel: +27-11-928 3700 Fax: +27-11-928 3900 Email: sales.VAESA@voestalpine.com Website: www.voestalpine.com/vaesa

TRANSNET

S U P P LY C H A I N

across the country by 0.5 percent, a small but nonetheless significant figure. The company also has much potential to boost the skills profile of the communities it operates in through its dedicated localisation programme.

In recognition of this need for increased capacity, Garry Pita said: “It is our intention to strengthen our partnerships to derive greater value from our freight logistics system. We intend to play a positive role in achieving economic growth in South Africa.”

Investments: Demand for Transnet’s services is increasing continuously and is set to continue for a long time. This is because economic growth on a national scale must be supported by reliable, cost-effective infrastructure if it is to be lasting.

Its responsibility to the well-being of the country is reflected through its implementation of Market Demand Strategy (MDS) which focuses on a seven year capital investment, with a projected total spend of R312 billion Pita is keen to inform us that this “excludes at least R500 billion of operational expenditure, including personnel

“We intend to play a positive role in achieving economic growth in South Africa.”

Manual labourer

Port operations

– Garry Pita, Supply Chain Director w w w. t r a n s n e t . n e t

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SAMSA STANDS FOR LEADERSHIP IN THE MARITIME SAFETY AUTHORITY SPHERE.

As an African leader in the Maritime Safety Authority Sphere, SAMSA leads in policy-making and is at the forefront of promoting South Africa’s Maritime Interests.

The organisation works to develop South Africa as an International Maritime Centre, while ensuring Maritime Safety, Health and Environmental Protection.

As 80% of world trade is transported via our oceans, the leadership and services that SAMSA provides are invaluable to our economy.

Visit www.samsa.org.za to find out more about how SAMSA makes a lasting difference.

SUPPLIER PROFILE

SAMSA The South African Maritime Safety Authority (SAMSA) was established under the SAMSA Act 5 of 1998. It is the authority charged with the promotion of South Africa’s maritime interests. These interests, rights and obligations are covered under international conventions to which South Africa is party, such as the United Nations Convention on the Law of the Seas (UNCLOS), the Safety of Life at Sea (SOLAS) and other maritime related conventions, which SAMSA must protect and promote. These international conventions are administered by the International Maritime Organisation (IMO).

The articulation of the maritime policy imperatives and goals are as follows: • Developing maritime awareness; • Assisting in the creation and fostering of an economic environment for the Maritime Transport Industry which will allow it to compete with other nations; • Contributing to the release of the full potential of the maritime industry in South Africa and to the modernisation of the shipping administration; • Ensuring fair labour practices such as employee rights, job creation and security with acceptable standards of employee health, welfare and safety in the maritime industry.

As a result of articulations in the Transport Policy the founding legislation of SAMSA identified three core mandate of the entity as: • To ensure safety of life and property at sea • To prevent and combat pollution from ships in the marine environment • To promote South Africa’s maritime interests Website: www.samsa.org.za

TRANSNET

S U P P LY C H A I N

costs.� Aside from developing modern, sustainable infrastructure the MDS aims to create almost 600,000 new jobs by supporting the growth of local businesses.

This enthusiasm for investment breaks away from the prerogatives of previous management teams, which Pita described as conservative. Most capital investments are planned to be completed in the next five years, which will be across the company’s freight and freight rail operations. Perhaps the most important of these is to increase rail capacity growth to meet growth in market demand volumes which will see capacity soar from 79.7 megatonnes to 170.2 megatonnes.

Increases in coal, iron ore and manganese exports are planned as global demand for these resources increases, especially from China.

600k MDs aims to create this many new jobs An increase in demand for Transnet’s Rail freight operations as demands for larger bulk volumes increases

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TRANSNET

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April 2015

S U P P LY C H A I N

“Transnet in some form or other has provided infrastructure support to South Africa and the neighbouring region, for well over a century” – Garry Pita

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“When Africa called,

Neotel allowed us to answer.”

Axon Holdings Divisional CEO, Andre van Zyl.

As a fast-growing company expanding its presence into Africa, Axon Holdings needed a telecommunications partner that could respond quickly, allowing it to upgrade its services in real-time.

Through NeoOne, our converged access solution, we provided the perfect answer. Using NeoVoice and NeoInternet, Axon Holdings are able to run nearly 50 000 Automated Voice Messages daily.

“Neotel delivers a converged solution that works seamlessly for us,” says Andre.

If you’re facing telecommunication challenges, switch to Ne Call 0860NEOTEL, switch@neotel.co.za or visit www.neotel.co.za

NeoOne’s flexibility and scalability will enable Axon to upgrade its facilities instantly and increase its telecommunication capabilities overnight – with no downtime.

“We’ve also been very pleased with Neotel’s round-the-clock tech support. Their service excellence has given us the confidence to plan our expansion.”

eotel.

120/1/15/e

They currently have 480 voice channels and plan further expansion into South Africa and Africa through the Neotel network.

SUPPLIER PROFILE

NEOTEL Neotel challenges the status quo and makes ICT simpler. Since August 2006, Neotel has helped thousands of businesses - large and small, reduce their communication costs, increase their productivity and grow their revenues. As South Africa’s first converged telecommunications network operator, Neotel provides innovative and cost savings solutions to its customers.

We welcome businesses wanting to explore options with Neotel. Neotel enables business and consumers to communicate and collaborate within South Africa and connects South Africa to the world – developed and emerging to enable commerce.

Over the 8+ years with over R6 billion investment in infrastructure, Neotel prides itself by being a level 3 business with its ~1000 passionate staff that help the business ‘inspire possibilities’ through innovative technologies and leveraging access to over 16,500 kms of national long distance fibre, over 9,000 kms of metro fibre and access to all 5 submarine cable systems that connect South Africa to the world.

Neotel provides the most superior and reliable communications services in the country to its customers and deploys innovative technology in its Converged Services and Voice, Internet and Internet Services. Thank you Transnet for your support!

Transnet rail freight equates to 80 percent of sub-Saharan Africa’s total freight

Freight Rail: Rail Operations is by far Transnet’s oldest and largest division, and the network has snaked across the Southern half of the African continent for well over a century. With so many decades of growth and innovation behind it, Transnet’s freight rail accounts for almost 80 percent of sub-Saharan Africa’s total freight infrastructure, which helps to explain why the country retains its place as one of the most developed countries on the continent. Past investment and foresight has ensured that the company has the capacity to transport freight from all of the country’s key industries including minerals, automotive, coal and agriculture. Beyond its extensive coverage of South Africa, the company oversees a web of operations which spans 17 other countries in

Transnet supports the country’s key industries including automotive, coal and agriculture.

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TRANSNET Africa, employing 25,000 people.

As part of Transnet’s Socio-Economic Infrastructure Development (SEID) portfolio the company donates old freight trailers to under-resourced communities and transforms them into usable facilities. So far over 30 such structures have been completed, enhancing the lives of over 100,000 citizens.

This project has been particularly successful in delivering security to remote areas, in

Transnet’s Socio-Economic Infrastructure Development (SEID) portfolio has reaching benefits, supporting local communities and their growing infrastructures.

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April 2015

TRANSNET

terms of both policing and healthcare.

Transnet Foundation Head, Cynthia Mgijima said: “We have invested over R27 million into the programme since 2001 and have built 19 satellite police stations and 14 multi-purpose centres. Added to this, 27,000 jobs have been created. We aim to meet the needs of the present, without compromising the ability of future generations to meet their own needs.�

S U P P LY C H A I N

Capital investment increased by 15.6 percent to R31.8 billion in Q4 of 2014.

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About Us

KHULA Fleet Solutions (pty) LTD was established in 2012 in an Industry dominated by large business. The founders vision was to form a truly black empowered Fleet Management Company in the South African market and was of the opinion that the industry would be receptive for a small business entrant, who would be

able to be nimble and unique in its customis product offerings, focusing on the customer’ unique needs as its key priority. KHULA Flee mission is to be a premier, growing compan that provides innovative, cost effective and focused, fleet management solutions and services which are strategically suited to its clients’ operational requirements.

Our Services Vehicle Disposal

Management Information

Tyres

Fuel Management

Traffic Fine Management

Vehicle Tracking

+

Relief Vehicles (short term rent

Fleet Telematics

Sourcing & Purchasing

Operating Rentals (OR) + Full Maintenance Rentals (FMR)

Maintenance Managemen

Our Value proposition Continuous Improvment Initiatives

Continuous Improvment Initiatives

Maintenance/ Abuse Tracking Enhanced driver awareness/training Right mix of vehicles “fit for purpose” Right sizing the fleet

sed r’s et’s ny

Introduce a culture of continuous improvement Enhance reporting access to quick information

KHULA Fleet’s objective is to maximize the efficiency of our client’s fleet by reducing operational costs and reduce the impact on the environment in the most economically feasible manner, while meeting the travel needs of our clients. This balancing act will have to be well managed thus ensuring cost effective transportation choices for current and future initiatives.

These include

tal)

e nt

• Right-sizing the vehicle fleet • Optimizing fleet management by achieving the right mix of vehicles matched to duty requirements – Fit for Purpose • Improving vehicle use through enhanced driver awareness and training, like green defensive driving courses • Improving vehicle maintenance tracking • Timely and more comprehensive reporting on vehicle operations • Enhanced two-way communication with Client and its Business Units • Enhanced reporting to Client and its Operations • Encouraging the ongoing development of a culture of continuous improvement within Client base

www.khulafleet.co.za salesenquiries@khulafleet.co.za +27 87 722 0003

SUPPLIER PROFILE

KHULA FLEET SOLUTIONS (PTY) LTD

KHULA Fleet in-turn delivered +-2500 vehicles nationally and expensed a capex value of +-R400 million. In 2013, KHULA Fleet was awarded in part for the light commercial and passenger fleet amounting to +-3500 vehicles. KHULA Fleet has fought the odds and remains in a strong business position going forward. We believe that through our innovation, embracement to technology based solutions and customer focused deliverables, KHULA Fleet can and will differentiate its identity in the industry.

Management: POOVANDEREN PILLAY Tel: 011 460 0764 Fax: 086 568 4602 Email: darrenp@khulafleet.co.za 53 Brunton Circle Founders New South Modderfontin www.khulafleet.co.za

TRANSNET

S U P P LY C H A I N

The coal and minerals bulk terminal at Richards Bay

Ports: Transnet Port Terminals (TPT) operates container terminals at Durban, Richards Bay, Ngqura, Port Elizabeth, and Cape Town. In 2007 redevelopment on Durban Container Terminal Pier 1 facility finished, the port becoming South Africa’s first ever rubber tyred gantry operator.

Ngqura Container Terminal has also recently been launched, servicing traffic from the East, South America and West African markets. Recently,

“We aim to meet the needs of the present, without compromising the ability of future generations to meet their own needs.”

Port officials in action

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RAIL 2 RAIL MANUFACTURES CONCRETE RAILWAY SLEEPERS OF THE HIGHEST INTERNATIONAL STANDARDS UNDER LICENCE FROM RAIL ONE GMBH (GERMANY) AND PROVIDES OUR CLIENTS WITH MORE THAN 6 DIFFERENT OPTIONS IN TERMS OF SLEEPER TYPES. WE OFFER A FULL TURN KEY SERVICE, FROM DESIGN OF THE APPROPRIATE PRODUCT THROUGH TO A DELIVERY SOLUTION THAT IS TAILOR MADE FOR EACH SPECIFIC SITUATION

ASHLEY VAN DER BERG, OUR FOUNDER, ESTABLISHED RAIL 2 RAIL AS A RESPONSE TO TRANSNET FREIGHT RAIL’S CALL FOR ENTERPRISE DEVELOPMENT AND TRANSFORMATION IN THE RAIL SECTOR 14 – 32 STUDY STREET FABRICIA, KIMBERLEY, SOUTH AFRICA Tel: +27 (53) 832 0266 Fax: +27 (53) 832 2097 www.rail2rail.co.za Email:5ashley@rail2rail.co.za 2 April 2015 Concrete Sleeper Innovation

TRANSNET

S U P P LY C H A I N

Ngqura was earmarked to receive an additional R2 billion in funding to deepen several ship berths and procure a raft of technical equipment in order to expand operational capacity. Equipment procured included 18 rubber tyred gantries, 48 bathtub trailers, two megamax ship-to shore cranes and 48 haulers.

The coal and minerals bulk terminal at Richards Bay has received numerous funding packages across its four decades of service, and now has capacity to process 20 million tonnes per annum, with a berth capacity of 13. Billions of rand have been set aside to fund further capacity which will see growth in this area between 2013 and 2019 to keep up with increased demand.

In January, it was announced that the Transnet port at Saldanha Bay would receive R9.65 billion

(above and below) The coal and mine bulk terminal at Richards bay

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fueling service continuity WHO WE ARE NRW’s Trading and Logistics PTY (Ltd) is a leading South African supplier of bulk wholesale fuel, including gas and lubricants. Based in Gauteng, we are wholesale licensed, level 2 BBBEE contributor that is 100% black woman owned. We are ISO compliant and help you to comply and practice ISO OHSAS 18001: 2007, ISO EMS 14001:2004, QMS ISO 2001:2008. Operational since 2009, NRW is committed to a partnership with clients to keep their performance powered on a continuous basis.

WHAT WE DO We source, supply and store refined petroleum products, primarily liquid petroleum gas, lubricants and greases, petrol, diesel and fuel oil, for all industrial and automotive applications. We supply nationally with accounts across a wide spectrum of refineries including Sasol Oil, Total SA, PetroSA, Totalgaz and Engen. Our supply is therefore unrestricted and unlimited.

WHO WE SUPPORT Through our collaborative effort with the company Food and Trees for Africa, “The Trees for Homes” programme contributes to climate change mitigation action and is registered internationally through the Verified Emission Reductions under the Voluntary Carbon Standard (VCS).

Mahlohonolo Maja MANAGING DIRECTOR

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S U P P LY C H A I N

The ro ro (Roll-on, Roll-off) port at Durban

to boost its ability to provide crucial services to the nation’s oil and gas industry. This spend is part of President Zuma’s blue economy drive targeting infrastructure inefficiencies in order to streamline the South African economy for future growth. A completely new rig repair quay will be constructed alongside the building of an offshore supply base.

The ro ro (roll-on, roll-off) port at Durban also received funding to the tune of R438 million, in order to increase its Twenty-foot Equivalent Unit (TEU) handling capacity to 230,000. Earlier this year it was announced that German crane operator Liebherr would be opening a dedicated

R438m The amount of funding received by the Port at Durban

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TRANSNET hub in cooperation with Transnet at Durban, to ensure that the company’s African customers received a level of quality service worthy of their global standards. The hub will contain a specialised spare parts service alongside sales and customer service departments. It will meet the specific needs entailed by the mining industry; namely specially trained personnel and dedicated infrastructure.

S U P P LY C H A I N

‘Earlier this year, it was announced that German crane operator Liebherr would be opening a dedicated hub, in cooperation with Transnet’

Liebherr is opening a dedicated hub in cooperation with Transnet

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www.pwc.co.za

Turning challenges into opportunities

At PwC, we understand that every business is unique. Working with our clients, we first gain an understanding of their industry, and then bring value-adding solutions to the table. Our Advisory practice is proud to be working alongside Transnet to identify opportunities in the following areas: • Strategy support • Capital project and programme assurance • HR change management • Private sector participation • IT effectiveness • Protecting against fraud and corruption To see how we can help your business, visit www.pwc.co.za.

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©2015. PricewaterhouseCoopers (“PwC”). All rights reserved.

(15-16635-1)

TRANSNET

S U P P LY C H A I N

Pipelines: Transnet’s pipeline operations have been fuelling the growth of the economy since 1965 by supplying crude oil in addition to petrol, diesel, and aviation fuels; in total, they process 100 percent of South Africa’s bulk petroleum products. Their pipelines handle an annual average throughput of roughly 16 billion litres of liquid fuel and upwards of 450 million cubic metres of gases. The division facilitates many of the major oil companies in South Africa including Shell, Chevron, British Petroleum and Sasol.

The most recent project in the pipelines division has been the construction of the R11.2 billion New Multi-Product Pipeline (NMPP) that spans 715 kilometres between Durban and Gauteng and has been recognised as the

Transnet pipelines handle an annual average throughput of roughly 16 billion litres of liquid fuel and upwards of 450 million cubic metres of gases

Company pipelines handle c.16 billion litres of liquid fuel yearly

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“Every day our employees, contractors, suppliers and customers have an impact on the natural environment and depend on it for their livelihoods” – Garry Pita

largest of its kind in the world. It will play a crucial role providing fuel for countless businesses, and is also responsible for lowering emissions through decreasing the number of freight trucks on the road by up to 60 percent. The NMPP can transport over a thousand cubic metres of fuel per hour which means that domestic and commercial demands can be swiftly met.

Constructing the pipeline represents a massive logistical achievement for Transnet and its partners, who delivered it on time and on budget.

The project facilities will support a 4.2 percent annual growth in refined products along the Transnet Pipelines delivery region which will

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Transnet developed its Energy Security and Carbon Mitigation Strategy which looks at operations across a 25 year period

inevitably have a knock-on effect on the local and national economies. The project employed over 12,000 people, drawing significant numbers from the local areas it passed through, evidencing Transnet’s commitment to improving the lot of the communities it affects. Perhaps the greatest challenge that the Transnet team overcame was safely constructing the pipeline across almost 100 kilometres of wetland, without causing any environmental damage.

Corporate Social Responsibility: Pita admits: “Every day, our employees, contractors, suppliers and customers have an impact on the natural environment and depend on it for their livelihoods.� In an effort to reduce the effects of an energy hungry industry, Transnet w w w. t r a n s n e t . n e t

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Railway Axle Manufacturers Swasap is a proudly South African owned level 3 BBBEE manufacturing company commited to the railway industry which it serves and to its clients.

Swasap has been manufacturing railway axles for Transnet Engineering and other railroad operators, rolling stock builders and refurbishment workshops worldwide for the last 65 years.

Management systems at Swasap conform to the highest international quality, safety and environmental standards.

• • • • • • •

SABS ISO 9001 – Quality standard ISO 14001 – Environmental standard American Association of Railways (AAR) – Axle manufacturer approval certification RISAS Approved – UK quality certification IRIS – International Railway Industry standard OHSAS 18001 – International safety standard EN 13261 (Europe)

+ 27 11 873 6666 • info@swasap.com • www.swasap.co.za Rinkhals Street • Industries East • Germiston 1401 • South Africa

Axle Forging

Axles ready for dispatch

School library Handover

TRANSNET

S U P P LY C H A I N

Transnet works closely with local communities

developed its Energy Security and Carbon Mitigation Strategy which looks at operations across a 25 year period.

The initiative is currently being implemented throughout the organisation, aiming to minimise security of energy supply risks, energy costs and emissions from energy use.

This will be harmonised with the overarching business strategy and will be included in the Supply Chain Management Strategy, which incorporates the Procurement, Governance and Enterprise and Development Strategies.

Transnet recognises that its remit extends far beyond simply providing a service, and has to embrace responsibility for the development of the communities it comes into contact

‘Transnet recognises that its remit extends far beyond simply providing a service, and has to embrace responsibility for the development of the communities it comes into contact with.’

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Reliable partner for mining life cycles and efficient dredging solutions

Marine mining solutions

Innovative dredging vessels

Life-cycle support

Royal IHC (IHC) is the world’s number one shipbuilder for the dredging, deep sea and alluvial mining industries offering unrivalled expertise and vast experience in these fields, accumulated over four centuries. IHC has been active on the African continent for decades. Besides offering a number of consultancy and advisory services throughout the various stages of mining, IHC has supplied many dredgers to various clients, varying from trailing suction hopper dredgers to cutter suction dredgers. These dredging tools provide high efficiency and ultimate reliability on a wide variety of dredging projects in Africa. This is ensured by providing unrivalled life-cycle support with our local support office in Africa. This impressive package results in a lower total cost of ownership.

IHC Holland B.V., The Netherlands T +31 78 691 09 11 info@ihcmerwede.com www.ihcmerwede.com

IHC MMP Ltd., South Africa T +27 21 657 17 00 info@ihcmmp.com www.ihcmmp.com

www.bbdsteel.co.za

087 808 2956

SUPPLIER OF ALL STEEL PRODUCTS • • • • • • • 64

April 2015

SECTIONS SHEET & PLATE TUBING STAINLESS STEEL ALUMINIUM SPECIALITY STEEL PIPES & FITTINGS

Contact Us Monika@bbdsteel.co.za 084 253 0404 Gwen@bbdsteel.co.za 083 291 2710 Cnr. Doreen and Rosslyn Road, (R566) Rosslyn ext 1

TRANSNET

S U P P LY C H A I N

with. The Transnet Foundation (which has so far received R160 million of funding) is the realisation of the company’s commitment to communities with the goal of: “Uplifting and empowering communities through health interventions, promoting education, enabling effective asset utilisation to provide much needed infrastructure solutions, developing rural sports and deploying its employees’ skills.”

Over the past 20 years, the Transnet Foundation has taken the noble challenge of “nation building” to the core of its operations, using a plethora of initiatives.

Perhaps the best-known is the Phelophepa health train, which, since its inception in 1994 has reached almost 24 million people. The

24m people have been reached by the Phelophepa health train since 1994

Phelophepha train serving the community

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TRANSNET

Complete systems integration company

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TRANSNET

S U P P LY C H A I N

name ‘Phelophepa’ combines elements of Sotho and Tswana dialects and means ‘good, clean health’ which is the precise purpose of using the train network to deliver healthcare.

The ‘train of hope’ offers medical and psychological aid to the most needy, in addition to education programmes. It also won the United Nations Public Service Award in the ‘Improving Service Delivery’ category in 2008 in recognition of the beneficial effect it has on the communities it serves. The Transnet Foundation also supports education and sport in rural schools, in addition to the allocation of various funds and grants for those most in need.

Planning a successful future for all: Transnet is ambitious about its role in the future

Loading bay Port Elizabeth

The Phelophepha health service utilises the train network to provided much needed healthcare to regional communities.

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Transnet recognises that with its ability to facilitate large-scale growth in the South African economy, it also has the power to lift citizens out of poverty and develop communities using education and training

of South Africa and, given that it holds a critically influential position as a state-run entity, these objectives seem highly feasible. Transnet is seeking to lead the way in exporting both thermal coal and manganese, as well as retaining important iron ore supply links with China.

Committing to developing the best business possible, it is looking to become the leading logistics hub in sub-Saharan Africa, while leading the field globally by becoming an internationally recognised benchmark for container and heavy haul operations.

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S U P P LY C H A I N

Company Information INDUSTRY

Supply Chain HEADQUARTERS

Johannesburg EMPLOYEES

50 000 REVENUE

R56.6 billion PRODUCTS/ SERVICES

Transnet has recognised that, alongside its ability to facilitate large-scale growth in the South African economy, it also has the potential to use technology and financial power to lift citizens out of poverty and develop communities using education and training. The scale of investments the company has made and has earmarked for the future is substantial. It is increasingly showing that economic growth can improve the lot of society through developing communities and investing in projects that will contribute to social as well as economic well-being.

• Transnet freight rail (formerly Spoornet – the freight rail division) • Transnet rail engineering (formerly Transwerk - the rolling stock maintenance business) • Transnet national ports authority (formerly the NPA fulfils the landlord function for South Africa’s port system) • Transnet port terminals (formerly SAPO - managing port and cargo terminal operations in the nation’s leading ports), and • Transnet pipelines (formerly Petronet - the fuel and gas pipeline business, pumps and manages the storage of petroleum and gas products through its network of highpressure, long distance pipelines)

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Integrating Renewables Through Battery Energy Storage Written by: Cleverson S. Takiguchi

Mount Komekura Photovoltaic power plant

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AFRICAN UTILITY WEEK

Energy storage system

E Energy storange systems address the challenges of renewable energy

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lectrical power utilities are working diligently to meet renewable energy mandates enacted by many governments around the world. This massive undertaking demands more widespread deployment of both grid-scale and distributed renewable resources. However, wind and solar energy generation poses significant integration challenges. Both resources can be intermittent and can cause serious power grid reliability and stability issues, while also impacting electric service quality for businesses and consumers.

In Africa there is much potential for off-grid renewable generation, which has developed in response to the often poor coverage provided by national grids. It is here where intermittent generation can have the most far reaching

ENERGY

effects, since reverting back to the grid can often prove fruitless. In some cases connecting to weaker grids can also be problematic given the low inertia of this type of generation.

Another concern that arises when generation surpasses demand is bi-directional power flow which can further impact grid stability and reliability. Today’s systems were built to handle a one-way flow of power from centralised generators, down transmission and distribution lines to loads.

Distributed energy storage systems, particularly when located in close proximity to renewable resources, are well suited to address the key challenges associated with renewable energy supplies.

Key Personnel

Cleverson S. Takiguchi S&C Electric Company

A solar plant, Shams

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AFRICAN UTILITY WEEK Solar power station

In Africa there is much potential for off-grid renewable generation, which has developed in response to the often poor coverage provided by national grids

ENERGY

Variability in output from wind and solar energy generation can create rapid swings in local and feeder-level voltage, but distributed energy storage can provide fast response to help firm up voltage levels and effectively fill in gaps created by large voltage fluctuations.

Co-locating storage and renewable energy resources gives utilities a particularly effective way of managing unwanted voltage changes, allowing them to maintain grid stability whilst meeting power quality requirements.

Distributed energy storage systems also provide an easily deployed energy resource for utilities, allowing them to ensure renewable energy supplies are available to meet demand.

Renewable energy generated when demand is low can then be stored to meet future demand.

Energy storage can be deployed in smaller capacity sizes, which can help avoid establishing a completely new plant. Distributed energy storage also supports other useful grid functions. For example: peak shaving, which can provide further savings by reducing the need to maintain conventional generation, and maintaining grid capacity to meet peak demand.

For more information on the latest battery storage technology, come to African Utility Week & Clean Power Conference. The Renewables: Wind & Solar track will have a dedicated session with presentations addressing uses for next generation energy storage on Wednesday 13 May 2015.

A Li-Ion battery being placed in an underground vault, beneath S&C’s PureWaveŽ CES unit.

Find out more at African Utility Week

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KENGEN’s Path

from Good to Great

Kenya Electricity Generating Company Limited (KenGen) is Kenya’s leading power generation company, producing some 80 percent of the country’s electricity, overwhelmingly from sustainable sources Written by: John O’Hanlon Produced by: Richard Deane 77

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The 140MW Ngong’ wind farm near Nairobi

Aerial view of the geothermal spa, a KenGen innovation and the only natural spa in Africa

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hen it comes to sustainable power, meeting emission targets, and rolling back the advance of global warming it would be hard to beat Kenya which has no coal plants and very few diesel or heavy fuel oil (HFO) generating stations. The nation has no fewer than 14 hydroelectric schemes on which it has traditionally relied for most of its power.

Kenya has an estimated hydropower potential of about 6,000MW as of December 2014 comprising large hydros (sites with capacity of more than 10MW) and small hydros. Potential for small hydros is over 3,000MW, of which about 25MW has been developed. However hydro power, like wind power, is a variable resource. Over the last three years or so both the long and the short rains across East Africa have been disappointing and consequently many dams have dried up or been depleted.

Fortunately Kenya has another renewable resource, and one that is much more robust.

Geothermal power generation has proven to be a highly effective technology in places, like the Great Rift Valley, where volcanic activity creates hotspots near the surface. In the decades since the inauguration of Olkaria I Power Station in 1981, the first geothermal power plant in Africa, Kenya has forged for itself a leadership position in this field. In Kenya more than 14 high temperature potential sites occur along the Rift Valley with an estimated potential of more than 10,000 MW. Other locations include

ENERGY

Chyulu, Homa Hills in Nyanza, Mwananyamala at the Coast and Nyambene Ridges.

Geothermal now accounts for 51 percent of the national power generation mix and has averaged 41 percent over the last six months.

This has resulted in a decline in reliance on hydro and thermal sources leading to a reduction in the cost of electricity by more than 30 percent and a more reliable base; at best hydroelectric stations can only run at around 70 percent efficiency whereas geothermal plants typically achieve over 90 percent.

KenGen is not resting on its laurels; by 2018 a further 460 MW of geothermal may be developed.

If this is achieved, the amount of electricity generated by hydro power could be reduced to 28 percent of the total mix.

“Our strategy now is to push forward with the projects that we have lined up, and in the next year or two we hope to bring in additional capacity of up to 385 MW, all from geothermal” – Albert Mugo, Chief Executive Officer

KENGEN Our Partners

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KENGEN

ENERGY

Decreasing the country’s reliance on hydro power would likely be beneficial, because lower rain levels have decreased hydro power output. Drought can be a big problem when it occurs because river flows often reduce to a trickle. Climate change is believed by some to intensify droughts so shifting away from hydro power is probably a good decision.

Albert Mugo was appointed as Managing Director and CEO of KenGen in January 2014, having previously served for close to six years as its Business Development and Strategy Director.

His first task was to complete development of 280MW of geothermal power plants in order to help the country reduce reliance on expensive thermal power and weather dependent hydropower generation. A year into his job he had grounds for considerable satisfaction when on 19 February, Olkaria I units four and five were inaugurated by Paul Kagame, President of Rwanda, accompanied by his Kenyan counterpart Uhuru Kenyatta. The inauguration of the two units marked the final phase of the 280MW geothermal power project at Olkaria.

Mugo estimates that Olkaria now saves the country $273 million (about Sh24 billion) a year compared with the cost of thermal generation.

But Mugo’s task is far from done. He now aims to increase the installed capacity from the current 2,000MW to 5,000MW over the next three years. “Our strategy now is to push forward with the projects that we have lined up, and in the

Side view of the 140MW Ikaria IV power plant

The 140MW Olkaria IV power plant commissioned in October 2014 by president Uhuru Kenyatta

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next year or two we hope to bring in additional capacity of up to 385 MW, all from geothermal.”

Geothermal sites need to be determined with care, he explains. “We have been fortunate in the Olkaria area, where we’ve identified potentially 1,000 MW. So far we have only developed 440 MW there, so we still have a lot more to do.”

The future is geothermal, he firmly believes, but he is far from presiding over a one-resource policy. Hydropower will always be an important part of the mix and he keeps an eye on the natural gas reserves lately discovered in Northern Kenya, near Garissa, and at the coast. Additionally, KenGen has a wind farm generating 25 MW very close to Nairobi, and plans to develop another 100MW of wind power by 2018. In addition private companies are interested in creating up to 500MW. “We see a lot of potential in wind power” said Mugo. “Wind looks like becoming a big thing in Kenya, and we are part of a group of businesses developing wind power in the country.”

Coal is another possibility, as Kenya contemplates becoming a coal producing nation.

According to the Ministry of Energy, the Mui Basin

“We are looking at how the company may best provide leadership in the geothermal space regionally”

A section of the 140MW Olkaria 1 power plant

Olkaria 1 power plant

– Albert Mugo, CEO w w w. k e n g e n . c o . k e

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A section of the Olkaria 1 project

180 kilometres to the east of Nairobi could yield an estimated one billion tonnes of coal, valued at $75 billion, and could produce 5,000MW of electricity if a thermal generating station could be built close by. The government is currently looking for mining companies to exploit the coal, so that project is some way down the line.

For the time being the most promising area remains geothermal technology and KenGen has unique expertise. “We are expanding quite rapidly” said Mugo, “and looking at the company to provide leadership in the geothermal area.

We have been cooperating with countries round the region in terms of providing expertise and

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have been called in as a consultant in Rwanda, the Comoros, Zambia, and Sudan. Uganda also has shown interest in asking our people to go and help them develop geothermal capacity.” He is also looking at innovative means of financing new geothermal projects. “So far we have always developed our power plants through debt finance, with KenGen providing some equity: now we are looking at going into joint ventures, with private companies joining with KenGen in a public/private partnership (PPP) and developing that project together. That is what we are trying to do with Olkaria VI.” The first step, he explained, is to invite an expressions of interest (EoI) from potential bidders, then to issue a request for proposal (RfP) to those that offer best value.” EoIs have already been issued for

Aerial photo of the 140MW Olkaria 1 project which was commissioned by president Kagame of the Republic of Rwanda

Olkaria 1 power plant

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A side view of the Olkaria 1 power plant

“We are getting a consultant to look at the Olkaria area to see where we could establish industrial parks, what infrastructure would be required and which industries would benefit most” – Albert Mugo, CEO

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the next phase of Olkaria, Olkaria VI, which will be the first test for the PPP model, he stated.

The land holding at Olkaria is very large compared with the footprint of the installed plant and the drilling locations. This means potential for industrial development right above the geothermal resource. Factories on the site would benefit from inexpensive and dependable power, and in addition a source of steam which many industries require. “This idea has attracted quite a lot of interest, and we are getting a consultant to look at the Olkaria area to see where we could establish these industrial parks, what infrastructure would be required and which industries would

ENERGY

benefit most. The government is very keen to see this happen” The income from leasing out the land for industrial development and more importantly the sale of both electricity and steam, would go straight to KenGen’s bottom line.

Mugo has recently meeting at which he shared his 2014 financial results with his shareholders.

It was an agreeable occasion for all: geothermal has really impacted the top line, with revenue to December 2014 up 37 percent on the previous half year. Revenue from electricity sales jumped by a third to Ksh11.6 billion from Ksh8.4 billion in December 2013. Profit before tax showed a 100 percent improvement. The shareholders, including the Kenyan government which holds a 70 percent stake, are very much behind KenGen since it cleared with no problem a $300 million loan from the French Development Agency to fund Olkaria development back in 2009.

Not surprisingly they are extremely keen to support future development, he says. “We are also looking at restructuring our balance sheet to give us more headroom for debt: so we are planning a rights issue and asking investors to put Ksh 30 billion into the company.” Mugo also said the firm is in discussions with the government to convert up to KSHs 20 billion of loans to KenGen into equity during the rights issue. If this can all happen by September this year as planned the company will be in excellent shape to meet its future obligation to catalyse Kenya’s growing prosperity.

Company Information INDUSTRY

Energy HEADQUARTERS

Nairobi, Kenya FOUNDED

2002 EMPLOYEES

2,300 REVENUE

KSHs 12 billion PRODUCTS/ SERVICES

Electricity generation

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Dundee Precious Metals shows that

caring leads to success Written by Tom Wadlow Produced by James Pepper

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The Canadian miner has embedded into Bulgarian and Armenian communities thanks to its environmentally and sociallyresponsible operations, bringing with it much needed economic boosts

D

undee Precious Metals is maximising productivity from its European assets in a responsible manner having boosted output fourfold at its flagship Bulgarian site while operating under the mantra ‘we succeed because we care’.

The company has four working projects and a number of exploration programmes spread across three continents, and is looking to cement itself as a global leader in sustainable mining operations, combining strong social work and provision of jobs for locals with environmental innovation in the mines themselves.

Having begun in Toronto, Canada, 30 years ago, Dundee Precious Metals began life as an investment fund in the gold mining sector, converting into an operator when its founders discovered the underground

Heat exchangers, converter, absorption towers to stack

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Strong CSR saw Dundee embed into communities

sites in Bulgaria and Armenia.

Now it is close to opening another Bulgarian mine and expanding its operations in Namibia, adding a sulphuric acid plant to convert the emissions created by its Tsumeb smelter.

Chelopech Encapsulating what Dundee Precious Metals is about is its flagship mine at Chelopech in centralwestern Bulgaria.

Bought by the business in 2003, the former Soviet-run gold, copper and silver mine has been given a complete facelift to the value of $400 million which has seen overall production quadruple, with ore output reaching 2.076 million tonnes.

“This is about earning respect as a foreign company and our stakeholder engagement and environmental work has allowed us to embed into societies� – Rick Howes, CEO

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Chief Executive Officer Rick Howes believes there is even more potential to be extracted.

He said: “We are exploring the whole surrounding region and believe there is a lot more mineralisation out there. There is about 10 years of life left in its current state, but we keep adding to this all the time and it is already one of the largest gold mines in Europe.”

Dundee Precious Metals has greatly upgraded the site, replacing the 50-60-yearold systems and processes with modernised technology and solutions.

For example, a recent innovation has been the introduction of wifi to allow real time tracking of operations, crucial to monitor productivity and stay on top of potential health and safety hazards.

Partners such as HP and Cisco are helping to

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D U N D E E P R E C I O U S M E TA L S

bring further technological upgrades to the site.

Local people from the surrounding are of the Dundee sites

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Giving Back Key to success at Chelopech, and indeed all of the company’s work, has been the careful integration into the project communities, both in a social and environmental sense, convincing the local populations that Dundee Precious Metals is a positive influence in their areas.

MINING

Key Personnel

Richard Howes President & CEO

Chelopech has seen a number of sustainable innovations implemented. This includes a new staged flotation reactor from Woodgrove Technologies, reducing power consumption of the flotation process by 50 percent. Air consumption is reduced by 80 percent and the amount of floor space required is 50-60 percent of that taken up by conventional equipment. “We have proven it is a no brainer, and are

Rick Howes is a Professional Mining Engineer with over 34 years’ experience in the mining industry.

His extensive industry experience includes progressive technical, operating, management and project roles in many of the largest Canadian underground mines and mining companies throughout Canada and most recently internationally.

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the first company to use this technology on a broad basis.� Howes added. “It is fully-installed at Chelopech and the big miners like Rio Tinto are now testing it. We will use it wherever we can as there are so many environmental and economic benefits to it.�

Other examples include systems which treat and recycle 100 percent of the water used at Chelopech with zero discharge, and a new conveyor to transport materials form the mine to the surface, replacing the use of trucks, leading to a 40 percent reduction in diesel use in 2013.

On the social side, building relationships with governments and local populations has been Rick Howes the most important challenge that Dundee Precious Metals has had to overcome. In 2013 the company spent $3.2 million on community investment and was recognised as the most

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growing new technology

Amec Foster Wheeler is pleased to be working with Dundee Precious Metals on the Krumovgrad Project in Bulgaria.

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D U N D E E P R E C I O U S M E TA L S generous financial donator in Bulgaria.

“This is about earning respect as a foreign company and our stakeholder engagement and environmental work has allowed us to embed into societies,” Howes said. “Convincing them that we will continue to invest was a challenge, but we have been successful and that is proven by the fact we are now working on a second project in Bulgaria.”

The company’s social responsibility is no better demonstrated than by its Chelopech English Language School, which was acquired with the mine and now attracts Bulgaria’s brightest students having seen significant investment. All teachers are Dundee Precious Metal employees.

Across all sites Dundee Precious Metals takes on local workers and provides them with training

MINING

“It was vital to take away the concerns of the local people and we are also introducing other sustainable features including new dry waste disposal methods” – Rick Howes, CEO

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D U N D E E P R E C I O U S M E TA L S in the key skills required, encouraging promotion from within and embracing six core values – dignity and respect, continuous improvement, transparency, environmental responsibility, safety and community investment. Including contractors the company employs around 4,000 people.

A worker at the mine

Kapan and Krumovgrad In the southeast of Armenia, the Kapan underground mine has been modernised like Chelopech since the company acquired it in 2006, requiring a big focus on skills training and addressing language barriers.

Last year 403,000 tons of gold, copper, silver

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NAMIBIA

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Shell trademarks used under license.

MINING

and zinc ore was produced, and although the mine is markedly smaller than its Bulgarian partner, there is excellent expansion potential.

Howes said: “We think we can double it in size, and though the decision to fully invest has not been made yet we are doing the studies and evaluations – within the next year or two we will have made a final call.”

Another exciting prospect is Dundee Precious Metals’ first open pit project, the second Bulgarian venture located just outside of Krumovgrad in the southeast of the country.

The site will be built by local contractors and a much-opposed cyanide method for extracting gold has been removed from any plans for the development, with Howes keen to showcase this as a pioneering example of an environmentallysensitive mining operation. Production should begin by late 2017 or early 2018.

“The life of the mine is about eight years and we are still exploring the area in the hope of expanding this further,” Howes added. “It was vital to take away the concerns of the local people and we are also introducing other sustainable features including new dry waste disposal methods.”

Dundee will also be starting its first open pit project in 2017 or 2018

Namibia There is also exciting work taking place in Namibia, home to Dundee Precious Metals’ specialised smelter which processes complex copper concentrates produced at Chelopech, having once served the notorious Tsumeb copper mine. w w w. d u n d e e p r e c i o u s . c o m

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“The uranium mines require the acid to leach out the uranium and the miners are keen to get their sulphuric acid locally as opposed to shipping in from other parts of the world� – Rick Howes, CEO 102

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Since buying the site in 2010 having been a customer of the previous owner, the company has invested around $350 million on modernisation, $242 million of which on a sulphuric acid plant which converts smelting emissions into product which is then sold onto Namibian clients.

Rossing Uranium Limited has already signed a five-year contract for 225,000 tons a year of sulphuric acid for use in its uranium mine, with local logistics operator TransNamib doing the transportation work by train.

Weatherly International is another customer signed up, with the total annual production of

MINING

230-280,000 tons already completely sold.

“There are about 1,200 contractors on site at the moment completing the project,” Howes said. “The uranium mines require the acid to bleach out the uranium and the miners are keen to get their sulphuric acid locally as opposed to shipping in from other parts of the world.”

The site has already seen emissions reductions of more than 44 percent over the course of 2013, with the new plant set to boost this figure even further.

Tsumeb is also improving its energy efficiency, with an 18.7 percent energy intensity decrease seen across 2013.

Chelopech saw a 10.6 reduction while Kapan achieved a 7.3 percent drop.

By continuing to pioneer greener mining techniques across all of its growing and impending production sites in Bulgaria and Armenia, Dundee Precious Metals will continue to build on its collaborative work with local communities and bring vital wealth and resources to local populations.

Such principles will not be sacrificed as the company continues to grow, with Howes determined to lead the way as a responsible miner with a worldwide presence in the future.

He concluded: “You must earn the right as foreign company to mine another country’s resource – being an investor of choice is hugely important, and people want us to stay.”

Company Information INDUSTRY

MINING HEADQUARTERS

Toronto, Canada FOUNDED

1980s EMPLOYEES

2,800 (4,000 with contractors) REVENUE

Not disclosed PRODUCTS/ SERVICES

Mining

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