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ACHIEVING BUSINESS EXCELLENCE ONLINE

AFRICAN EDITION Issue No.4

ssg consulting: newmont ghana gold: telecel zimbabwe: hyspec Mining services:

Saving downtime and costs Keeping mining operations in Africa moving

EVENT SPECIAL PREVIEW: MINING INDABA 2013


Professional Services to facilitate Compliant Information Asset Management with enhanced Staff Efficiency Summary of ECM Professional Services • Provide Vendor Neutral Professional Services • Analyse, Specify & Design ECM Solutions to Client Needs and Specifications • Ensure Best Fit, Best in Practice, Best ROI Solution is implemented within the client’s Budget. • Retention & Disposal Plan Design • ECM Implementation & Project Management • Back File Conversion Design and Project Management Our Services • Assess current Status and Perform ECM Needs Analysis • Develop and Implement ECM Change Management Plan • Develop Business Case including design of Performance Indicators • Conduct Information Asset Surveys (Taxonomy) • Develop Records Management Policy and obtain Management/Board Approval

• Develop Information Asset Creation/Metadata and Capture Strategies • Develop Appraisal/Destruction Strategies • Develop Information Asset Preservation Strategies • Develop Access Strategies (Security, Search & Retrieval) • Define Integrated Functional and Technical Requirements for ECM Systems • Create ECM Implementation Plan • Implement ECM Systems, Facilities, Training and Procedures • Design and Implement Service Improvement Plan • Assist with Continuous Improvement of ECM Systems • Business Process Re-Engineering in line with Day Forward ECM Strategy • South African developed and hosted ECM Cloud Solution – Conforms to the Tax Administration Act of 2011 and ECT Act 25 of 2002 requirements

CSD Technology | ECM Solutions Architects Mobile +27 82 449 4957 | Office +27 21 556 4049 | Fax +27 86 672 0319 | E-mail Hercules@csdtechnology.co.za www.csdtechnology.co.za


business excellence editorial Martin Ashcroft

Will Daynes

Martin has edited business magazines for 15 years and has been editor-in-chief since Business Excellence began in 2006. mashcroft@bus-ex.com

Will has been a business writer for three years. He joined the Business Excellence team in September 2012. wdaynes@bus-ex.com

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Chief Executive

Tell us your stor y

If your company has something to talk about then get in touch and find out how to BE seen. vincent@bus-ex.com

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8 16

8 Energy

Africa’s untapped potential

There is currently a huge opportunity to direct investments into clean, efficient, renewable energy for the growth of a green economy in Africa.

16 Executive insight

Rob Otty

The managing director of Norton Rose South Africa discusses Steve Jobs, Picasso and reading between the lines

18 EXECUTIVE INSIGHT

Sechaba Letaba

The CEO of Kudumane Manganese Resources talks about leadership, Nelson Mandela and labour unions.

22 Executive insight

22 4 | be africa

ismail dockrat

Ismail, CEO of Denel Aerostructures, thinks social media is overrated and prefers novels to business books.


contents indaba special preview: 26 26 Event preview

Mining indaba

Aligned to South Africa’s employment and growth initiatives in business tourism.

26

34 Hyspec Mining Services Saving downtime and costs

How the supply of hydraulic hoses and inspection services keeps mining operations in Africa moving.

44 SSG Consulting The key to prosperity

How innovation and family values have combined to create a leading project management consulting company.

34 44

52 Set Point group

Serving the African mining industry

An industrial technology specialist offering bespoke products and services to the African mining industry.

54 IHC Merwede B.V.

the technology innovator

Reliable partner for efficient mining life cycles.

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Mining: 56 NEWMONT GHANA GOLD

Setting an example

56

72

George Brakoh, explains how the mine’s economic legacy will benefit the local community for years to come.

72 KUDUMANE MANGANESE RESOURCES Keeping it simple

Developing a mining operation in one of South Africa’s poorest regions, and keeping the local community at the core.

82 CHINA AFRICA RESOURCES A sign of things to come

How the company’s operation in Namibia can be a springboard to greater success.

88

Transport & logistics: 88 Intercape

Growing new routes

A program of expansion at the South African coach services company.

98 Kenya Vehicle Manufacturers On the road to growth

How KVM is attracting the interest of some of the major OEMs in the automotive industry.

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contents

Telecoms: 106 TELECEL ZIMBABWE

Gaining national coverage

CEO Francis Mawindi talks about delivering mobile phone coverage to 90 percent of the population by 2013.

Energy: 114 AFRICAN ENERGY

114

A decade of reliability

122

Managing director Lincoln Dahl discusses how his company has remained at the centre of a rapidly evolving market.

Oil & gas: 122 AFRICA GEOPHYSICAL SERVICES (AGS) Making waves

A team of experienced seismic experts is paving the way for others to reap the rewards that East Africa has to offer.

Food & drink: 130 AFRIFRESH GROUP A fresh approach

130

This South African fresh fruit producer has developed a powerful integrated agricultural business model.

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Energy

Africa’s untapped potential Alongside the severe energy crises currently being experienced by most African countries comes a huge opportunity to direct investments into clean, efficient, renewable energy for the growth of a green economy in Africa

written by: Ansgar Kiene

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E

nergy is one of the keystones for social and e c o n o m i c development and affects all its major aspects, such as environmental protection, gender equality, food security, climate change mitigation, health, education, and poverty alleviation. This is why access to affordable, sustainable modern energy services— electricity as well as thermal applications—is a major determinant for progress in achieving poverty reduction and the attainment of the Millennium Development Goals (MDGs) in Africa. Accord i ng to t he International Energy Agency (IEA), almost two-thirds of the African population of one billion people have no access to electricity. In rural areas of African countries, the share of people with access to modern energy

services is as low as eight per cent. Only four per cent of the worldwide produced electricity is generated on the continent. On average, Africa consumes about 492 kWh per capita compared to the EU with over 3,000 kWh; and the US which consumes 7,700 kWh per capita. With a total installed capacity of 103 GW, Africa has less power generation capacity than, for instance, Germany with 120 GW. Of these 103 GW, 46 per cent are located in South Africa and 34 per cent in Northern Africa [JRC 2008]. Despite its fast-growing population and economies demanding ever more energy, the high and everincreasing costs of fossil fuels have lead to a situation where 80 per cent of the African population still rely primarily on traditional biomass, including fuel wood or charcoal, agricultural

“Africa is losing more than four million hectares of forest every year” 10 | BE Africa

Solar panel in Botswana


Energy waste and animal dung to fulfil their daily energy needs. The consequences of the lack of access to modern energy technologies are severe. Because of the inefficiency of traditional energy forms, the poor often pay higher unit costs for energy in comparison. In many cases, fuels are burned in poorly ventilated or enclosed spaces leading to indoor air pollution. The World Health Organization (WHO) estimates that 400,000 people, mainly women and children, in Africa die of indoor air pollution every year. Through the unsustainable use of biomass, Africa is losing more than four million hectares of forest every year—twice the world’s average deforestation rate, which makes the continent even more vulnerable to the effects of climate change. A large percentage of household incomes is spent on energy for electricity and cook ing (diesel, kerosene, charcoal, etc). At the same time, women invest a substantial amount of productive time in the

4% Proportion of worldwide electricity production generated in Africa

collection and transport of fuel wood. In order to reach the energ y-poor, polit ica l and business concepts for sustainable energy services will have to be developed. Renewable energies can contribute to a large number of political objectives, such as job creation and poverty eradication, sustainable use of resources, and the protection of both human health and the ecosystem. This is particularly true for small to medium scale renewable energy systems that provide affordable energy to livelihoods currently defined by energy poverty, and help in creating employment by powering enterprises for both rural and urban populations. The rapid expansion of renewable energies across Africa will have a

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80% Proportion of Africans relying on biomass to meet daily energy needs

Collecting firewood in Ghana

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positive impact not only on the African people, its economical progress and the protection of its environment, but also on the world at large, leapfrogging the fossil fuel-based development of t he indust r ia lised countries. Energy services have a significant role in facilitating both social and economic development— energ y underpins economic a c t i v i t y, enhances productivity, and provides access to markets for trading pur poses. In addition, it enables fulfilment of the basic human needs of nutrition, warmth, and lighting; and enables access to education, health, information and communication services. The shift from fossil fuels to renewable energies across Africa also has the


Energy

Mobile charger, Burkina Faso

potential of giving a boost to the achievement of all eight UN MDGs. Generally, almost all A f rican countries are going through severe energy crises, as energy demand increases more rapidly t ha n energ y

supply. The continent’s future energy production and consumption are expected to soar. However, infrastructure is poor and outdated, resulting in high efficiency losses. Deficient power i n f ra st r uc t u re dampens economic growth

and weakens competitiveness by having a disadvantageous effect on productivity. In addition, skyrocketing prices for fossil fuels and huge costs for nuclear power plants (as well as the issues of hazardous waste, mining and operations) leave societies

“In order to reach the energy-poor, political and business concepts for sustainable energy services will have to be developed� BE Africa | 13


“Deficient power infrastructure dampens economic growth and weakens competitiveness by having a disadvantageous effect on productivity�

Windmill in Kenya

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with little alternative to renewable energies. In many cases, large scale hydropower projects are no recommendable alternative, considering their negative environmental and social impacts. Since an overall energy scarcity has resulted in high costs for transport and industrial/commercial sector operations in most African countries, sustainable economic growth can only be achieved on the basis of renewable energy provision for industries. Also, empirical evidence has show n t hat t he diversification of electricity production in A frican countries such as Kenya or Mauritius resulted in a stabilisation of the power sector. Africa’s vulnerability to external shocks, the risks related to volatile prices for fossil fuels, and droughts in the case of large hydropower capacity,


Energy were reduced without high subsidies or increases in the electricity price. By now, many renewable energy technologies have reached competitive levels with conventional energy sources. In order to meet the energy needs of African people in the future, massive new investments will be required in the coming decades. The investment decisions will decide the structure of energy systems in the next 30 to 40 years; therefore, we will have to use this window of opportunity to transform t he nat iona l energ y systems from large scale conventional power plants to decentralised renewable energy technologies. These of fer g reat economic potential in an expanding market, as the renewable energy resources in Africa have hardly been exploited, mainly due to limited p ol ic y i nte r e st a nd investment levels. Business is a main driver of development. One recent example is the massive success of the mobile phone market in Africa, which is exceeding all expectations.

400,000 Deaths in Africa each year from indoor air pollution

New technologies, a huge demand and the liberalisation of t he telecommunications sector, supporting active competition, revolutionised the market drastically and led not only to improved service delivery and quality but to a surge in overall business activities. Draw i ng on this success story, individual entrepreneurs as well as major corporations are offering demand driven, tailor-made energy services in Africa—applications from solar home systems providing basic lighting to wind farms powering industrial production.

Innovative financial schemes are being developed; new distribution and service net work s are being established to guarantee maintenance. In addition to the activities of the private sector, communities and municipalities have begun to decide on alternative energy provision, fostering social stability through local empowerment and public participation. Africa’s energy challenges require a radical scaling-up of access which calls for an improved enabling environment, effective policy and regulatory frameworks, improved management capacities and financial services. Keeping in mind the unlimited renewable energ y a v a i l abi l it y, there is a huge opportunity to direct investments into clean, efficient, renewable energy for the growth of a green economy in Africa.

Ansgar Kiene is director of the World Future Council Africa and coordinator of the African Renewable Energy Alliance (AREA). www.worldfuturecouncil.org www.area-net.org

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Rob Otty

Managing director, Norton Rose South Africa


executive insi ht Nobody’s perfect. What quality or ability do you wish you had? The ability to read minds! On a more serious note—wisdom. We acquire knowledge at a tremendous pace, and using it wisely is a real skill.

What is the best business book you have ever read, and why?

can never assume that what you are hearing is what the person saying it actually thinks and believes.

What do you consider to be your major achievement (in life or business)? Convincing my wife to marry me and then stay beside me, no matter where life has taken me.

Who or what do you The Art of Managing Professional Services think is overrated? by Maureen Broderick. It contains practical tips and insights on how to deal with matters that are often unique to professional services firms. It offers guidance from leaders of some of the world’s most successful professional services companies.

Someone you would most like to have met, living or dead, and why?

Picasso, caviar, politicians, peas and definitely broccoli.

Which one piece of wisdom would you pass on to your successor? Make time for yourself and your family.

How would you like to be Steve Jobs. I am an Apple junkie all the way! remembered after your retirement? What mistakes have you made (professional or otherwise), and what did you learn from them? Accepting at face value that what was told to me was both true and what the person believed. I have learned that, as a leader, one

Rob Otty is the managing director of Norton Rose South Africa and is based in Johannesburg. Prior to being appointed MD, Rob practised as a litigation lawyer specialising

I hate to even think that far ahead!

Do you have a quote or motto you live (or work) by? No matter who you are, you are never as important or indispensable as you think.

in insurance law and professional indemnity insurance litigation, as well as in engineering and all construction-related litigation. www.nortonrose.com

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CEO of Kudumane Manganese Resources

Sechaba Let


taba

executive insi ht Nobody’s perfect. What quality or ability do you wish you had? Patience, I am impatient. I also wish I was more in touch with my emotional side which would help me express feelings such as sympathy, etc.

What is the best business book you have ever read, and why? Effective Leadership through Effective Relationships (John Maxwell). This book resonates with my own approach when it comes to leadership. I have a strong belief that there must be chemistry between people who work together. You have to like each other in order to be effective in what brings you together.

Someone you would most like to have met, living or dead, and why? Nelson Mandela. He has charisma and possesses the rare qualities such as intelligence, and he expresses and articulates his thinking so well that he reaches his audience. He develops courtesy in all situations, disarming even the guards who had been placed to trouble him. As my motto goes, Mandela believes in people too. He is quoted as he reflected on his life later saying, “all men have a core of decency and if their heart is touched, they are capable of changing.” This is what I believe in. He has mastered patience and compromise.

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“Having walked every step of the way in my mining career starting as a miner to the CEO position” What do you consider to be your major achievement (in life or business)? Believing in people and giving them second chances. As a result, I witnessed people evolve to levels they themselves never thought were possible. Having walked every step of the way in my mining career starting as a miner to the CEO position. “Been there, done that, got a T-shirt for it,” as the cliché goes. Having successfully managed to lead in a diverse environment that did not support my background. Creating the best work teams in my career and being instrumental in bringing about change in South Africa’s mining industry.

Who or what do you think is overrated? The attitude and the mind-set of the labour unions. Labour unions should never lose sight of the fact that they are the major contributors in either making or breaking the mining industry; hence their approach should be aligned as such. The success and failure of the industry will affect them just as much as it will the employers. People miss the fact that human rights go hand in hand with both accountability and responsibility.

20 | BE Africa

What mistakes have you made (professional or otherwise), and what did you learn from them? I have often only believed in the good in people and buried my head in the sand like an ostrich. I have learnt that I must influence decisions that involve my life and career and not leave it in the hands and mercy of others.

Which one piece of wisdom would you pass on to your successor? Understand the environment and the people you have to work with. A happy workforce equals a good safety record and high productivity.


executive insi ht Keep your emotions and temper under control.

Who has been your inspiration professionally? Philbert Rweyemamu. He was my manager as a young mining engineer in my career. He believed in people. He was charismatic and yet that did not translate into poor job performance and compromised outputs. He could be both the boss and the friend.

How would you like to be remembered after your retirement? As someone who sees and acknowledges all human beings. Someone who encouraged uniqueness and individuality in people. Someone who took a chance on people. Supportive and consistent.

Do you have a quote or motto you live (or work) by? Let those I lead spend time on what they know best, (which I don’t know), so that I can spend time doing what I do best. ‘I let them run with it’. Never question a man’s integrity unless they have given you a reason to do so.

do you have something to say? We’re always looking for new executives to feature.

Get in touch to share your story with us... Sechaba Letada, CEO of Kudumane Manganese Resources. www.kmr.co.za

editorial@bus-ex.com BE Africa | 21


Ismail Dockrat CEO, Denel aerostructures

Nobody’s perfect. What quality or ability do you wish you had?

Someone you would most like to have met, living or dead, and why?

I am beginning to realise that I ought to use patience as a strategy more often than I do. My tendency is towards driving change and making things happen now. I feel that companies must develop long-term sustainability and therefore must be driven by a long-term vision and strategy. Therefore, there are things that leadership needs to do which doesn’t often have an immediate short-term result and requires planning and patience in the execution.

The person I most would like to have met, and indeed I did meet albeit briefly, is Nelson Mandela. He stands as one of the great leaders of the past century, and has been an inspiration to millions of people. He is a man of vision and integrity, and was patient in achieving his objectives. He could not have achieved all that he did had he not also been tough and determined. I would love to spend time with him to understand some of the difficult choices he must have faced and how he dealt with them.

What is the best business book you have ever read, and why? To be honest I generally prefer reading history and literature and I find that there are great lessons to be learnt from such books relevant to the world of business. A good example for me is the works of Alexander Dumas. One of my favourite works of his is The Count of Monte Cristo. It tells the story of a talented young man who achieves great success driven by the desire for revenge, but who then learns that motives, while they can bring positive results, ultimately don’t bring happiness. The book is filled with many great lessons in strategy.

22 | BE Africa

What do you consider to be your major achievement (in life or business)? Since I was a little boy, I wanted to travel and I wanted to work with aeroplanes. I am very fortunate that my career has allowed me to do both of these things and I enjoy that very much. I feel as if my dreams have come true and I am very grateful for that.

Who or what do you think is overrated? Social media. The technology is in an early stage and consumers have not yet found


executive insi ht


Included The BE Mining Directory showcases leading mining organisations from across the world, ranging from big corporations to junior mines and their supply chains.

Be seen throughout our portfolio of magazines: •BE Mining Directory •BE Mining •BE Weekly •BE Monthly •

To find out how to get involved contact: vincent@bus-ex.com


executive insi ht most important thing is to treat people with respect and if you make a mistake to apologise and genuinely seek forgiveness.

Which one piece of wisdom would you pass on to your successor? Have a high expectation of yourself at all times.

Who has been your inspiration professionally?

the right balance, style and etiquette for its use. I think a lot of people are going be very embarrassed a decade from now by the amount of information they share on the internet about their private lives. Social media is maturing as a business tool and will have exciting applications in the future, but it is not going to alter the basic human need for direct face-to-face social interaction and relationships.

What mistakes have you made (professional or otherwise), and what did you learn from them? Oh, it’s hard to choose, I’ve made so many! The first thing is to know when you’ve made a mistake and what the mistake is. Then you’ve got to be able to acknowledge your role in it and reasons for letting it happen. Then you’ve got to be able to reflect and work out how not to repeat the mistake again. The worst mistakes are the ones – as they almost invariably do – which end up hurting other people’s feelings. The

I work around a great bunch of people, and I take my inspiration very often from the ordinary people I encounter every day in our company. I really love working with people and I learn so much from them.

How would you like to be remembered after your retirement? I hope that I shall be usefully occupied right up until the last, and I hope that people will remember me as a good person who got things done, and was of service to others.

Do you have a quote or motto you live (or work) by? I don’t have a motto or quote, but I try to uphold the values of integrity, respect and fairness in my dealings with people every day.

Ismail Dockrat is CEO of Denel Aerostructures. www.denelaerostructures.com

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EVENTS

Mining Ind

aligned to South Africa’s employment and growth initi MINing indaba™ 4-7 February 2013 The Cape Town International Convention Centre, cape town, south africa The economic and social impact of large conferences and conventions hosted in South Africa cannot be underestimated. Over the next five years, over 200 000 visitors are expected to visit the country on the back of the 200 confirmed international meetings and conferences that will be hosted in South Africa. These meetings are expected to add

26 | Be africa

more than R1.6 billion to South Africa’s GDP. Earlier this year, Tourism Minister Marthinus van Schalkwyk confirmed that his department plans to increase domestic business tourism – mainly conferences and incentive travel – by 10% in 2015 and 15% by 2020. The strategy is informed by a baseline growth rate of 5.3% recorded in 2009. Van Schalkwyk remarked that South Africa boasts a 40% return of delegates as leisure visitors. In addition, 43% of these business delegates are accompanied by a leisure tourist, spending an average of R1,000 a day.


Special preview

daba

initiatives in business tourism

Sustainable development at Mining Indaba In partnership with ICMM, key international speakers will discuss global sustainable development issues with the wider mining, development and investment communities. Mining executives, policy makers, civil society and higher education representatives will come together to examine mining’s contribution and how to improve the industry’s sustainable development performance. Tuesday, 5 February 2013 Mainstage Presentation 16:59 High-Level Panel: Sustainability - A Critical Issue for Investors

Jonathan Moore, Senior Vice President & Managing Director, Mining Indaba LLC

It is clear that by growing business tourism, we can stimulate economic activity and employment. South Africa has proven its ability to attract large-scale global events, and so business tourism should be recognised as an integral part of the national tourism strategy and employment creation. In this, we should also recognise the dual role played by conferences such as the annual Investing in African Mining Indaba – also known simply as the Mining Indaba. The mining sector is a critical part of South

Thursday, 7 February 2013 08:45 Welcome Remarks: Aidan Davy, Director, ICMM 09:00 KEYNOTE ADDRESS: Mining’s Contribution to Sustainable Development 09:45 Panel Discussion: Mining’s Economic Contribution to Sustainable Development 11:30 Panel Discussion: Revenue Transparency and Anticorruption - A Global Challenge 12:45 Closing Remarks and Calls to Action For full session topics and speaker announcements visit: www.miningindaba.com/sustainability

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EVENTS Conference Agenda Summary Saturday, 2 February 2013 12:00 - 18:00

Registration Open

Sunday, 3 February 2013 07:30 – 18:00 10:30 – 18:00

Registration 8th Annual Mining Indaba Golf Tournament at Pearl Valley Golf Course

Monday, 4 February 2013 07:30 – 19:00 09:00 – 12:30 09:30 - 11:30 12:50 – 17:40 14:00 - 16:00 14:55 – 15:55 17:30 – 19:00 17:40 – 19:00

Registration Pre-Conference Workshops New in 2013 Securities Exchange Session 1 Commodities Outlook & Review Forum Securities Exchange Session 2 Keynote address: Dr. David Humphreys Norlisk Nickel Exhibit Hall Open New in 2013 Ice Breaker Reception in the Norilsk Nickel Exhibition Hall

Tuesday, 5 February 2013 07:00 – 18:00 Registration & Breakfast 07:30 – 18:00 Norlisk Nickel Exhibit Hall Open 08:00 – 08:05 Opening Remarks – Jonathan Moore, Mining Indaba LLC 08:06 – 08:25 OFFICIAL WELCOME: H.E. Minister Shabangu 08:26 – 09:16 Keynote Address: Dr. Marc Faber 09:15 – 12:20 Corporate White Paper Presentations (throughout the morning) 09:17 – 16:58 Mainstage Corporate Mining Presentations (throughout the day) 09:30 – 11:30 Securities Exchange Session 3

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Special preview

10:30 – 11:50 12:26 – 13:25 13:00 – 14:45 14:00 – 17:02 16:59 – 17:39 17:40 – 18:30

Non-African Government Presentations Keynote Address: Dr. Dambisa Moyo Networking Luncheon African Mining Ministerial Forums 1 & 2 High-Level Panel: Sustainability - A Critical Issue for Investors Cocktail Reception

Wednesday, 6 February 2013 07:30 – 18:00 08:30 – 09:10 09:11 – 09:51 08:00 – 18:00 09:15 – 12:20 09:52 – 17:55 10:30 – 11:50 12:00 – 13:45 13:45 – 14:15 14:00 – 17:30

Registration Keynote Address: Dr. Mamphela Ramphele Keynote Address: Robert M. Friedland Norlisk Nickel Exhibit Hall Open Corporate White Paper Presentations (throughout the morning) Mainstage Corporate Mining Presentations (throughout the day) Non-African Government Presentations Networking Lunch Keynote Address: Bernard E. Sheahan African Mining Ministerial Forums 3 & 4

Thursday, 7 February 2013 07:30 – 12:00 08:30 – 13:00 08:45 – 12:45 09:00 – 09:45 13:00

Registration Norilsk Nickel Exhibit Hall Open Sustainable Development at Mining Indaba Keynote Address: Mark Cutifani 19th Annual Mining Indaba Concludes

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EVENTS

Africa’s economy, contributing 19% of the country’s GDP if indirect effects are included. The Mining Indaba provides a platform for delegates from all over the world to network every year in Cape Town, facilitating dealmaking and employment. Mining is also the sector with the greatest potential for job creation in South Africa if you take into account mineral beneficiation, consequently it is imperative that the sector is supported. Events such as Mining Indaba allow policy makers to interact with industry officials to exchange views and share information, leading to better policy outcomes.

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The conference helps to support the mining sector, by ensuring the industry remains healthy, but it also leads to direct job creation itself. To date, we have spent R336 billion over the last 18 years, supporting the Cape Town economy and creating 2000 direct and 1000 indirect jobs during the last six years. (The Cape Town International Convention Centre has been researching the information for the last six years of the event.) As the Investing in African Mining Indaba has grown, so has our contribution to the economy of the country and the Western Cape. In February this year, we recorded


Special preview “As the Investing in African Mining Indaba has grown, so has our contribution to the economy of the country and the Western Cape” a 17% increase in the number of visitors, with a record 7,020 delegates attending the conference. We are now the world’s largest gathering focused on African mining, and attract the sector’s most influential stakeholders. We were able to contribute R100 million towards employment opportunities in the Western Cape. This meeting created close to 500 jobs as a direct result of our participation in the hospitality and transport sectors in the province, as well as 246 indirect jobs elsewhere in the country.

The Nedbank Business Matchmaking Programme The matchmaking programme is an integral element of the Annual Mining Indaba experience. The programme features a state-of-the-art personal concierge service assisting delegates to make their critical connections before and ensure the meetings happen during the event. With more than 7,000 delegates representing more than 100 countries, the Business Matchmaking Programme is the platform to create and nurture vital cross-continental business relationships. The internetbased, pre-conference Business Matchmaking software is powered by OUTsmart Marketing, the official provider selected by the organisers. Programme quick facts: • Available to all registered delegates at no cost • Delegates will be required to create an online profile to participate and request meetings • Meetings are confirmed before the event

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EVENTS

7,000+ Number of attendees in 2012

The Mining Indaba is committed to a zero-waste philosophy. This year we were able to donate in excess of 1,200 conference bags including stationery to local schools. The Cape Town International Convention Centre donates all left-over food from the

conference to Foodbank South Africa, where it is redistributed to needy families. New York 23 October 2012. In line with its agenda of aligning itself with the transformative policies of the South African government, and contributing to the advancement of the country’s mining industry, Investing in African Mining Indaba has offered bursaries to two deserving mining engineering students. The bursaries valued at US$10,000 each, have been offered to Lindiwe Nyalunga, a 4th year student at Wits University and Hlulisani Mabege, also a 4th year student pursuing the same academic

KEYNOTE SPEAKERS

Mark Cutifani

Chief Executive Officer, AngloGold Ashanti Thursday 7 February 2013 09:00 - 09:45

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Dr. Marc Faber

Investment Advisor, Fund Manager, & Broker/Dealer Tuesday 5 February 2013 08:26 – 09:16

Robert M.Friedland

Dr. David Humphreys

Wednesday 6 February 2013 09:11 – 09:51

Monday 4 February 2013 14:43 – 15:43

Chairman, Ivanhoe Capital Corporation

Principal, DaiEcon Advisors


Special preview discipline at the University of Pretoria. The bursary is for one academic year, 2013, and it will cover tuition, books, accommodation, meals and other related academic expenses like mine excursions. As part of the award, Nyalunga and Mabege have been invited to the 2013 Mining Indaba, where they will have an opportunity of interacting with financiers, investors and mining’s most influential stakeholders, who are expected to be part of the more than 7000 delegates attending the Indaba. We recognise the importance of partnerships in contributing to the sector’s

Dr. Dambisa Moyo International Economist and Author

Tuesday 5 February 2013 12:26 – 13:25

Dr. Mamphela Ramphele

Chair of Gold Fields; Founder of Letsema Circle and Founder of The Citizens Movement in South Africa Wednesday 6 February 2013 08:30 – 09:10

growth. We will continue to work with our partners in South Africa in supporting broad-based black economic empowerment, education and capacity building, and sustainable development. We have drawn up baseline standards which will inform our work with established vendors who are either already BEE-certified or are in the midst of the certification process. For more information about Mining INDABA 2013 visit: www.miningindaba.com

H.E. Mrs. Susan Shabangu

Minister of Mineral Resources, Republic of South Africa Tuesday 5 February 2013 08:06 - 08:25

Bernard e. Sheahan

Director of the Infrastructure and Natural Resources Department, Africa and Latin America, The World Bank Group Wednesday 6 February 2013 13:45 – 14:15

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ba

N ou Vi mi o.1 r st sit n i n 82 an gi 0 a d n d t: a

Saving downtime and costs Managing director Alan Wood describes the progression from the supply of hydraulic hoses to inspection services that save downtime and costs for mining operations in Africa

written by: Martin Ashcroft research by: Richard Halfhide

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Hyspec Mining Services


Assembling hydraulic hoses in Burkina Faso


Hyspec Mining Services

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ounded in 1996, Hyspec Mining days there were no phones, no internet, and Services specialises in the to send a fax involved a 60km round trip to provision of hydraulic, fuelling pay $5 per page. Through some acquaintances and lubrication equipment and I found out about an underground mining services to the mining and operation in Obuasi in the Western region of exploration industry in Africa. The company’s Ghana, so I made a nine hour taxi journey growth over the last fifteen years has been a and found an Australian drilling company phenomenon, so much so that its major parts with hydraulic hoses dripping off its drilling supplier Manuli Fluiconnecto, a subsidiary of rigs. The owner of the business gave me 45 the Italian Manuli Rubber Industries, acquired minutes in his boardroom and explained to me a 51 percent equity stake in the company on the mining industry in Ghana; when I came 31 November 2012. out I thought – this is where we have to be.” Wood put together a 40 foot container “It’s a win-win situation for us both,” says managing director Alan Wood. “They gain a of hydraulic hoses, assembly equipment, significant share of the African parts and fittings and sent mining market and we secure it to the Ghanaian port of continuity of supply, as well Tema, meeting up with it as opportunities to spread our a couple of months later to business model. Being part of start a bridgehead, register a large group also provides a the business, recruit some Hyspec Mining employees and start training buffer in the event of a shaky Services established them. It soon became clear, economic future.” Hyspec has come a long however, that this operation way since 1996. In a similar business in the UK was still too far from the mine sites to be as at the time, Wood was looking for an overseas effective as it should be. opportunity to excite him. One of his friends “After about six months the mining guys (also a customer) was engaged in deep sea were complaining that we weren’t much use diving in support of the early oil exploration to them in Tema, 300 kms away, so one of the operations on the Gold Coast offshore Ghana. mines assisted by clearing a patch of jungle “He talked up the African experience and outside of their perimeter; they laid a concrete encouraged me to visit, stating there was base and we built our first containerised simply nobody providing hydraulic services workshop. That was in 1997 in Tarkwa at there,” says Wood. Eventually, he went. the Iduapriem mine. We opened our second He was not immediately inspired by one at the Ashanti Gold operation in Obuasi what he saw, but then fell upon the mining and we now have over 50 workshops across industry. “Fifteen years doesn’t sound like a twelve countries in sub-Saharan Africa.” Operating from onsite workshops has long time but it’s a lifetime away in terms of infrastructure in Africa,” he says. “In those allowed Hyspec to progress from the simple

1996

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90% Proportion of Hyspec’s contracts on gold projects

Hose crimping on site

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provision of hydraulic hose assemblies into a service provider focused on reducing customers’ downtime and operating costs by inspecting their production equipment— excavators, drill and blast drilling rigs, and dump trucks. “Downtime on an excavator can cost many thousands of dollars per hour when they’re producing gold,” says Wood, “and 90 percent of our contracts are on gold projects. If a hydraulic hose fails, even with us onsite it might still take up to three hours to replace it. By the time one of the client’s service technicians gets down to the pit, takes the hose off, brings it to our workshop for us to make the hose, then gets it back down to the machine and fits it, they may have had three hours of downtime. That could be ten, twenty, even thirty thousand dollars’ worth of lost production. Hose breakdowns not only incur production loss, but affect other areas such as oil contaminations of the high grade gold, equipment damage, personal injury situations or environmental damage. The cost of a hydraulic hose pales into insignificance compared to the cost of the breakdown and associated downtime, so it’s really important that we work to catch a hose before it fails.” This is where Hyspec’s inspection service


Hyspec Mining Services

Hyspec evolution of the hose container

is worth its weight in gold. The mine’s equipment will have maintenance periods for refuelling and lubrication a couple of times a day, explains Wood, so if that time can be used to inspect the hoses it gives the customer the opportunity to replace suspect hoses before they fail. “We also carry out root cause analysis of failures,” he continues, “which allows us to pinpoint areas that the customer might need to start concentrating on to reduce downtime and improve productivity.” The average life span of a hose might be six months on a drill rig, or a year or two on an excavator, but it can vary for a variety of

reasons. “It depends how hard the customer is working it,” explains Wood. “How well is the hose routed within the configuration of the machine? Is it chafing for example? How good and sympathetic are the drivers or operatives? Are they damaging the hoses against rocks? Temperature of the hydraulic oil is a major factor, and it is important to keep the hydraulic oil cool. There are a lot of reasons why hoses fail. That’s why we conduct root cause analysis so we can identify which machines are most at risk and why. We can then make plans to help a customer reduce hose failures and improve their uptime.”

“One of the mines cleared a patch of jungle outside of their perimeter, laid a concrete base and we built our first containerised workshop” be africa | 39


As the business grew and its customer destinations multiplied, it became apparent that changes would need to be made to the logistics operation to get the right products to the right place at the right time. “We became a very large purchaser of hydraulic hoses and fittings,” explains Wood. “The GFC manufacturers simply do not keep inventory, however, and the lead times have extended significantly. Miners are not interested in

excuses, they need the service and product immediately, and the manufacturers were struggling to provide the stock in the volumes we were ordering.” To keep up with customer demand, Hyspec ran up an air freight bill in excess of a million dollars a year, so the decision was made four years ago to invest in a purchasing and logistics facility in Perth, Australia, to consolidate all its shipments there. “Now we’re in charge

“Downtime on an excavator can cost many thousands of dollars per hour when they’re producing gold”

Hose technician inspecting service truck for potential failures

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Hyspec Mining Services

Diving umbilicals can be a challenge

of all our shipping to individual countries,” says Wood. “It has reduced our annual air freight bill by three quarters, and allowed us to get the right product in the right place to better support our mining customers. We know we are not perfect, however, and we are continually looking for improvements.” Hyspec has had a single source agreement with Manuli for hydraulic hoses and fittings from the beginning, with 80 percent of its business deriving from Manuli products. The other 20 percent relates to greasing, lubrication and fuelling equipment. “Now we are part of their direct family we have new opportunities in the oil and gas industry where Manuli is making an impact,” says Wood. “The use of hydraulic

systems in offshore oil is considerable and we already have operations in Takoradi in Ghana, which is a new offshore centre for oil production. We’re also opening up in Cote d’Ivoire where there is already an offshore oil production industry. Guinea and Sierra Leone have development phase drilling, as well as Tanzania where we have a presence already, so the sub-Saharan region is full of oil and gas opportunities.” Between the mining and oil and gas sectors, Hyspec is looking to set up six to ten new workshops in 2013, but finding a skilled workforce to fulfil this expansion is a major challenge. “There are little to no skilled workers available, and we cannot steal from our clients,” says Wood, “so we

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Conventional single containerized workshop

“Now we are part of Manuli’s direct family we have new opportunities in the oil and gas industry” must train our own technicians. We have a full time technical training manager who ensures that all our technicians are up to scratch, and we have now developed a train the trainer system within each country, which he manages.” Whilst multinationals continue to expand in Africa, it’s becoming harder to employ expatriate labour, says Wood. “The governments naturally want their own people

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to be employed, not just within the mining or oil and gas industry but by all the multinational companies. We’re all under pressure to reduce our expatriate headcount. I believe it’s the right way to go, but it takes significant time and effort to bring the local employees up to a standard where they can provide the same level of service as any other global company in the first world. Our hoses are assembled in accordance with first world fabrication


Hyspec Mining Services

New workshop format

procedures: we want to avoid contamination on our customers’ equipment, and ensure that the hoses made in our workshops last as long as possible. This involves using appropriate manufacturing equipment, internally cleaning the hoses before they are installed on the mines’ equipment, storing them correctly, and banning practices such as mixing and matching, hose re-ending or welding of fittings. All of the hoses made by Hyspec are tagged and carry a three month warranty. Meeting these objectives in Africa therefore requires extended training in the assembly and identification of high pressure hoses and systems, and involves close monitoring in every workshop to ensure that procedures are understood and strictly followed at all times.” After talking to Alan Wood, I am impressed

Central workspace for new workshop

by Hyspec’s success on a continent known for its difficult business environment— from a one workshop company providing hydraulic hoses to a single mine in Ghana, to a group with over 50 workshops spanning twelve African countries, providing a full range of services aimed at reducing the mines’ operating costs and at improving their production. Hyspec and Manuli’s combined expertise will allow the group to grow further and expand to other markets and areas very quickly. Time and effort are definitely not a problem for Hyspec. For more information about Hyspec Mining Services visit: www.hyspec.com

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The key to prosperity

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ab

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N our Vi mi o.4 st sit nin 11 an gi 1 a d n d t:


SSG Consulting

Chief executive officer Steven Golding explains how a lack of fear, a willingness to embrace innovation and good old fashioned family values have combined to create a leading project management consulting company

written by: Will Daynes research by: Marcus Lewis

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he concept of family values is one that stretches across all four corners of the world. From the United States to Brazil, South Africa to China, the concept of family exists as a fundamental building block of society. In each of these countries and beyond one will find a multitude of businesses that adopt family values as a part of their core philosophy, yet perhaps no better example can be found than SSG Consulting. “We are a company,” explains chief executive officer, Steven Golding, “that is very much built on a Christian foundation with the concept of family very much at the heart of what we are all about.” Formed in late 2007, SSG Consulting has developed rapidly in the years since, based almost exclusively on previous relationships with clients and their founders. Possessing collective experience of more than half a century within the field of project management, the company is ideally placed to service a growing client base within the infrastructure, energy, mining and petrochemical industries. “Embracing innovation and having a lack of fear,” Golding continues, “are two of the core characteristics that define us as a company. We are a relatively young crowd, by comparison, with an average management age of under-50 and we believe that this comes across in the way that we approach each task with a degree of boldness and energy that others may lack.” Looking at the company’s offering, it provides services through four different spectrums, those being project execution, consultation, the SSG Training Academy and

46 | Be africa

The company serves a growing client base within the infrastructure, energy, mining and petrochemical industries


SSG Consulting


2007 The year SSG Consulting was formed

SSG provides project execution services

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its KEY360 management system. KEY360 was borne out of the company’s frustration based on years of experiencing business and project management systems that often did not facilitate the basic function that they themselves were designed to perform. “As part of executing our projects,” Golding states, “we soon realised that effective data management and having the ability to work with a large number of documents, and present them back to our clients efficiently, required a system that did not come close to existing within the marketplace at the time. It was our own internal requirements that drove us to develop what is now a commercially successful product and one that we, quite boldly, predict will result in a scenario where, in a matter of years, no mega-projects under construction anywhere in the world will run without KEY360 being used somewhere in the fold.” The human aspect of the KEY360 system has similarly been a major contributing factor to its success, as Golding goes on to highlight. “A lot of what we try to do as a company, both internally and with our clients, involves energising and motivating people. What KEY360 does is provide its users with the ability to monitor people in such a way that it can improve efficiency, output and collaboration. Actually being able to watch


SSG Consulting

KEY360 was created to provide effective data management

people grow and mature in the field, thanks in part to the use of KEY360, is definitely one of the most exciting and inspiring things that comes from the work that we do.” It is messages like this that SSG Consulting intends to take with it to the 2013 Investing in African Mining, INDABA, event in Cape Town this coming February. “We think that this INDABA is going to be a massive springboard for a lot of investment,” Golding says, “and Key360 was built for that exact purpose.” Investors across Africa are today in the process of establishing assets and, as

an investor, having access to up-to-theminute information regarding said assets is fundamental. In reality, most project management information that is delivered at present is not real-time. KEY360 on the other hand is specifically designed to provide minute-by-minute data that is available to all stakeholders, making it an incredible tool that gets information to where it should be quickly, accurately and in a useful format. This, in turn, helps get the assets in question up and running faster, and in a more cost effective manner.

“Embracing innovation and having a lack of fear are two of the core characteristics that define SSG Consulting” Be africa | 49


“KEY360 is specifically designed to get information to where it should be quickly, accurately and in a useful format�

Effective management systems assist the physical execution of the project

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SSG Consulting The need to be on top of information when establishing an asset is clearly the core message that the company is hoping to put across at the INDABA event. “Information,” Golding reveals, “is what we, in our experience, find actually costs projects the most in terms of time and money. The reason being that, while technical solutions are more often than not fine, it is the physical execution of the project in terms of pure management and data management that holds back the process. This fact makes it all the more important that KEY360 has the ability to become a networking tool those involved in establishing assets have an understanding early on of the opposed to against one another.” importance of using effective management Providing companies with a platform that systems that provide the information that is allows them to work together seamlessly is yet needed, when it is needed.” another example of the way SSG Consulting KEY360 was developed at the same is able to bring innovative ideas to the fore. time as, and very much inspired by, the “Innovation,” Golding concludes, “as well explosion in popularity of social networking, as the way in which KEY360 works and, of driven by the likes of Facebook and similar course, the way in which we as a company programmes. What KEY360 was designed execute business are the things that have to create however is what SSG Consulting enabled us to get where we are today, and defines as corporate networking. “In some they remain the aces up our sleeves that cases,” Golding enthuses, “we have examples will allow us to remain relevant in an everof upwards of 50 companies working together changing market.” on a single piece of software. This is unheard of anywhere else and goes to prove that KEY360 For more information about has the ability to become a networking tool SSG Consulting visit: that gives different parties the opportunity www.ssgconsulting.co.za to work together in establishing assets, as

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a

15 ou V mi 04 - r st isit nin 15 an g i 06 ds n d at ab :

Serving the African mining industry An industrial technology specialist offering bespoke products and services for the African mining industry

written by: Set point group research by: marcus lewis


Set point Group

S

pecialising in the analytical from petrochemical to industrial. The services domain are three range includes flow meters, nozzles, hoses, member companies—condition dispensers, loading arms, pumps and a myriad monitor ing s p e c i a l i s t s of complementary products and accessories. WearCheck, analytical chemistry Pneumax’s products are used by any laboratory Set Point Laboratories and industry from mining to manufacture, and certified reference material manufacturers include a host of pneumatic solutions such AMIS (African Mineral Standards). as air preparation and monitoring devices WearCheck serves the earthmoving, to fittings and tubing, and even automation industrial, transport, shipping, aircraft and systems. Pneumax supplies imperial mine electrical industries through the scientific cylinders and rail change cylinder devices to analysis of used oil from mechanical mines across the African continent. and electrical systems. It also offers a The Letaba Group is a one-stop pumping sophisticated selection of alternative solutions provider. Carrying a number of condition monitoring options, internationally renowned including thermography and names, Letaba is also known for its impressive rental fleet, vibration analysis. its range of submersible Set Point Laboratories, an ISO accredited analytical pu mp s , s e l f-pr i m i n g chemist r y laborator y, pumps, mag-drive pumps, Set Point Technology conducts analytical testing of diaphragm pumps, gear Holdings Ltd was formed gold and PGMs amongst other pumps, liquid ring vacuum elements, water and coal, pumps and blowers. and has the expertise to set up and operate Set Point Group’s mining services companies, RENG and NW GoPro, represent on-site and mobile laboratory facilities. AMIS manufactures and sells a range of a manufacturing base focused mainly on matrix and grade-matched reference materials the assembly and repair of hopper and to the exploration and mining industries loco wheels, with NW GoPro adding torque and also to commercial laboratories. These guide suspension skip guide rollers to their materials are used to check the accuracy of product offering. results of samples analysed by analytical Set Point Laboratories and WearCheck will methods and are an essential part of sample be representing the Group at the 2013 Mining Indaba, exhibiting at stands 1504-1506. / assay quality assurance programs. Set Point Group members in the fluid handling arena are product stockists Meter For more information about Systems, Pneumax and the Letaba Group. Set Point Group visit: Meter Systems offers a selection of fluid www.setpoint.co.za control products used by many industries

1997

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N ou Vi mi o. 3 r st sit n i n 50 an gi 1 a d n d t: a

the technology innovator Reliable partner for efficient mining life cycles

A

written by: IHC Merwede research by: marcus lewis

growing world population and increasing GDP are market drivers for a robust increase in mineral demand and will be for years to come. In addition, challenges in supply, including declining head grades and limited large exploration successes, are taking the mining industry into new frontiers. Integrated dredge and marine mining solutions IHC Mining, part of IHC Merwede B.V., focuses on integrated mining solutions for the onshore, nearshore and deep-sea market segments. It believes an integrated approach achieves optimum results for any mining operation, and works closely with customers on exploration, development and implementation. It offers advisory services

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and in-depth studies to determine the overall technical and economic viability of the project, and during operation, it provides life-cycle support, resulting in optimal use of equipment at minimum costs. As well as an integrated approach, IHC Mining also offers stand-alone products. It designs, builds and supplies innovative mining vessels and advanced equipment, ranging from mining dredgers and crawlers, slurry transport systems and mineral separation plants to plant automation and control systems. Reliable partner The roots of IHC Mining can be traced back to the 18th Century, with the delivery of two gold dredgers to Italy and Russia. Its origins lie with six Dutch shipyards that


IHC mining B.V.

joined forces to build six sea-going tin dredgers for the Billiton Company, a former Royal Dutch Shell subsidiary. Today, the company builds innovative vessels and advanced equipment used for extracting mineral sands, diamonds, gold, copper, nickel, tin, iron ore, phosphate, rare earths and rock salts from depths up to 300 metres around the world. It is also developing equipment for operating in deeper waters. The experienced IHC Mining team consists of geologists, engineers (mechanical, mining, geotechnical, processing and environmental), technicians and other specialists. Each of its locations in South Africa, Australia, The Netherlands and Singapore is a centre of excellence, a onestop shop for the regional mining market, and employs experts from all around the world. With the establishment of a dedicated mining

division, IHC Merwede has demonstrated a long-term commitment to the international mining industry. IHC Mining draws upon IHC Merwede’s in-house expertise for delivering innovative vessels, advanced equipment and life-cycle support. IHC Merwede’s longstanding financial stability makes it possible for IHC Mining to provide customised financial solutions, offering possibilities for investments and developing business models for rental purposes. Thanks to its advisory services, advanced equipment and integrated solutions, IHC Mining is a reliable partner throughout the entire life cycle of mining operations. For more information about IHC Merwede’s Mining division visit: www.ihcmerwede.com/mining

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Newmont Ghana Gold

Setting an

example

George Brakoh, manager of local supplier and contractor development, explains how the economic legacy left behind by Newmont Ghana Gold will benefit the local community for years to come

written by: Will Daynes research by: Richard Halfhide

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Newmont Ghana Gold Pouring concrete

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oasting economic growth rates that have consistently topped six percent in recent years, Ghana is universally lauded as being an emerging African economic success story. A peaceful and stable democratic nation, Ghana continues to make strong progress towards its goal of becoming a middle-income country by 2020. Like many companies currently based in the country, the Newmont Mining Corporation has found Ghana to be a land of great opportunity and one where it can expand its own global reach. One of the largest and oldest gold producers, the Newmont Mining Corporation also holds significant assets in North and South America, Australasia and the Far East, employing 43,000 staff and contractors worldwide. In Ghana, Newmont’s African activities are presently centred on its Ahafo operation, located beneath an area inhabited by around 1700 households. Newmont’s staff made great strides in successfully resettling the affected community, compensating residents financially and providing them with new homes, schools and titles to land that they were previously not allowed to own. Today the mine supports the employment of 1800 people directly employed by Newmont and provides work for a further 3000 contractors on site. As the mine has continued to develop, its focus has turned to Newmont’s Ahafo Linkage Programme, a three year project designed to increase

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Atlas Copco Ghana Ltd. +233(0) 302 774512 info.ghana@gh.atlascopco.com www.atlascopco.com

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Surface Drilling Equipment

Sustainable Productivity


ATLAS COPCO GHANA LIMITED Innovating for sustainable productivity Atlas Copco is an industrial group with world-leading positions in compressors, construction and mining equipment, power tools and assembly systems. The Group delivers sustainable solutions for increased customer productivity through innovative products and services. Founded in 1873, the company is headquartered in Stockholm, Sweden and has a global reach spanning more than 170 countries. In 2011, Atlas Copco had about 33,000 employees. The Group’s vision is to become and remain First in Mind –First in Choice® for its customers and other stakeholders. Its organizational culture is based on three core values which are interaction, commitment

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and innovation. These values guide its people towards a consistent position in offering the best of products and services to customers and other stakeholders. Atlas Copco Ghana Limited started operating at Obuasi, Ghana in 1992 with the goal of supporting the country’s mining industry. Its regional responsibility covers Nigeria, Liberia, Sierra Leone and French speaking West Africa. The company currently has three branches strategically positioned in Accra, Obuasi and Tema. Atlas Copco Ghana operates through a number of divisions within three main business areas; Mining and Rock Excavation Technique , Compressor Technique and Construction Technique.


Newmont Gold NEWMONT Ghana GHANAGOLD

The Mining and Rock Excavation Technique business area markets and services underground drilling rigs for tunneling and mining applications, surface drilling rigs, loading equipment, exploration drilling equipment as well as the related aftermarket and drilling consumables, all designed to help achieve high productivity with moderate maintenance costs. The Compressor Technique business area provides industrial compressors, gas and process compressors and expanders, air and gas treatment equipment and air management systems. It has a global service network and offers specialty rental services. Compressor Technique innovates for sustainable productivity in the manufacturing, oil and gas, and process industries. The Construction Technique business area provides construction and demolition tools, portable compressors, pumps and generators, lighting towers, road construction and compaction and paving equipment. It offers service through a global network. Construction Technique innovates for sustainable productivity in infrastructure, civil works and road construction projects.

The company can also boast of a well-defined aftermarket (service) team which offers expert service and training to customers to increase their production capacities. In enhancing its service offering, the company has recently established a new training facility at Obuasi to provide a central place for employees and customers to attend training seminars and courses under the “Master Driller Program� which is a by-product of the Atlas Copco Performance Services initiative. Atlas Copco Ghana does more than meeting equipment needs; it goes a mile further to help solve customer problems by providing consumables, spares and solutions for customer operations. The company continuously strives to be a good corporate citizen and as part of its corporate social responsibilities, immense contributions have been made towards the sustainable development of the Obuasi community. Atlas Copco Ghana has also been involved in various charity and community engagement projects in Ghana. It remains committed to sustainable productivity. T. +233 0302 774512

Info.ghana@gh.atlascopco.com

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NEWMONTGhana GHANAGOLD Newmont Gold Newmont GhanaGold est laborum. Lorem ipsum procurement from local feature text to go here...... dolor sit amet, consectetur suppliers. adipisicing elit, sed do Lorem amet, “Overipsum the dolor coursesitof the consectetur adipisicing elit, eiusmod tempor incididunt last six months,” explains sed do Brakoh, eiusmod tempor ut labore et dolore magna George manager of aliqua. Ut enim ad minim incididunt ut labore et dolore local supplier and contractor veniam, quis nostrud magna aliqua.forUtNewmont enim ad development exercitation ulla mco minim Ghana veniam, Gold, quis “wenostrud have laboris nisi ut aliquip ex exercitation laboris successfully ullamco completed the ea commodo consequat. nisi aliquip ex ea commodo firstut phase of this programme. Duis aute irure dolor in consequat. irure Today we Duis find aute ourselves Completed houses dolor in reprehenderit in This is a caption this is a caption reprehenderit in voluptate embarking upon the next velit esse voluptate velit esse cillum Gold andcillum severaldolore of its stage of our strategy, which will focus on Newmont Ghana fugiat nulla pariatur. sint dolore eu fugiat nulla pariatur. Excepteur promoting the mentoring of small business eu contractors that states that Excepteur they will work cupidatat small non proident, sunt in sint occaecat non proident, sunt occaecat by some of ourcupidatat larger contractors.” towards providing local businesses quitype officia deserunt anim id in A culpa officia deserunt mollitbetween anim id culpa with the of support thatmollit will give them jointqui agreement already exists

GOLDER ASSOCIATES Golder Associates’ involvement in Newmont Gold Ghana Limited’s Ahafo Amoma project began during stage three and involved the design, engineering and construction of a large majority of the infrastructure related to the goldbearing, open-cast pit. From the outset, Golder engineers added value by determining more efficient ways of setting up the project, whereby they reviewed and optimised NGGL’s initial design concepts. Included in the scope of work was the design, engineering and construction of an 8.7 km haul road and associated infrastructure; the waste rock dump; the sedimentation control structures and associated controlled outlet structure. The site’s secluded location, extreme topography and adverse weather conditions presented Golder with numerous challenges,

such as logistics, water management, sedimentation control and security. Golder managed these challenges by thinking outside the box, which involved extensive research and inventive in-house engineering, which well exceeded client expectations. Golder handed the project over to NGGL US$9million under budget, three months before schedule, and with an exemplary safety record of no reported incidents. Golder’s ‘above and beyond’ work ethic and quality engineering and delivery of the Ahafo Amoma project, enabled NGGL to begin operations at the mine three months ahead of the expected operational date. cfell@golder.co.za www.golder.com

NOVEMBER 2012| |652 Be africa


Weekly Because a month is a long time to wait... Your weekly digest of business news and views www.bus-ex.com


Newmont Ghana Gold the opportunity to grow. Consar Meanwhile, a similar mission Between July 2004 and June 2006 Consar Limited being undertaken at Ahafo demonstrated our performance in building and civil involves a drive to create engineering works when we were awarded the construction more private-public sector of a new ball/sag mill wet plant including 49 senior and junior partnerships and increase the staff houses at Ahafo for Newmont Ghana Gold Limited. level of dialogue between the Our quality and standard of workmanship, coupled with a good working relationship with Newmont, earned us two sectors. another opportunity to construct a new ball/sag mill wet “Most of the time,” Brakoh plant together with 160 room accommodation at Akyem, continues, “what we find is which is nearing completion. that the two sectors tend not Working with Newmont Ghana Gold has tremendously to understand one another. improved our safety and environmental practices in our What we want to do is create construction business over the period. a scenario where the two www.consarltd.com sides can connect with one another. We believe that this will ultimately create a more level business environment that will allow everyone to grow more effectively.” What the company is equally keen to ensure is that a legacy of economic stability and growth remains long after the mine has ceased operations. One of the ways it plans to achieve this is through the strengthening of regional agribusiness. “We believe the environment around the mine provides excellent economic opportunities,” Brakoh enthuses, “and we want it to remain that way even when our own presence diminishes.

3,000 Contractors that the mine provides work for Stone pitching works

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Top soil spreading by Gyifoss

Newmo

“Today we are focused on promoting the mentoring of small business by some of our larger contractors� What we are striving to do is encourage more successful local businesses to invest some of their profits into various agribusinesses.� On the national front, Newmont Ghana Gold is at the forefront of efforts to develop local content agreements across the country. These efforts have the full support of the Ghanaian government

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who have brought in local content laws that require mining companies to submit local procurement plans, based on a list of items. Working in collaboration with the Ghana Chamber of Mines, Newmont has thus far identified 28 different product categories that it believes can be sourced locally.


Newmont Ghana Gold

ont is committed to local sourcing

Together with a number of specialist consultants, the company has been carrying out in-depth analysis of these products and the companies that manufacture them in the country. “Based on the progress made to date,” Brakoh says, “we have proposed that a programme focused on driving local content agreements begins in early 2013. What we believe we can achieve in the short-to-medium term is to attract an increasing number of foreign investors into the country, with the ultimate aim being to encourage them to partner with local businesses. This is all part of a longterm strategy that we have mapped out that

Grass planting by Nyame Adom Twum

we believe will lead to a situation where international manufacturers will be able to utilise Ghanaian businesses to establish their own local operations.” Newmont Ghana Gold will certainly be hoping that its local content programme meets with the same success and approval as some of its other initiatives. In early October, the company was commended by the country’s Asanthehene, Otumfuo Osei Tutu II, for establishing the Ne w m ont A hafo D e v e lop m e nt Foundation, an enterprise that seeks to ensure the sustainable development of its host communities. Otumfuo praised the company for

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The local content programme at Ahafo has met with great success


Newmont Ghana Gold

1,800 People directly employed at Ahafo

the cordial working relationship it has maintained with local communities and reaffirmed his belief that if all other mines could emulate the example set by Newmont, the lives of mining communities across Ghana and Africa as a whole would improve by leaps and bounds. “Together with our partners in the local community we have achieved a lot at Ahafo,” Brakoh says, “and the results are there for all to see. What I, like many others, now believe is that we have the potential to achieve something just as big on a national scale. Thanks to Ahafo there are numerous examples of local businesses that today have the potential to grow further thanks to opportunities that didn’t exist before and we are passionate about making such opportunities available on a national level. We are under no illusion that this will pose significant challenges, but with the best efforts of everyone involved we feel that what happens in Ghana will set an excellent example that other countries can follow.” For more information about Newmont Ghana Gold visit: www.newmont.com/africa

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Keeping it simple Kudumane Manganese Resources is developing its mining operation in one of South Africa’s poorest regions, and is keeping simplicity and the local community at its core

written by: Becky Done research by: Jon Bradley

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Kudumane Manganese Resources

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Sechaba Letaba, CEO


Kudumane Manganese Resources

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outh Africa-based Kudumane it will become the preferred exit point for Manganese Resources is the the mine’s product. Production of manganese latest mining operation to enter ore from the project is expected to eventually the competitive manganese ore increase to two million tonnes per annum industry. Located near Hotazel in and later 2.5 million tonnes per annum, with South Africa’s Northern Cape Province, the the introduction of underground operations mining operation will produce manganese in 2019. The expected life of the mine from the rich deposits that characterise is 10 to 15 years for the open pit or the region. The project is located about combination mining operations, after which one kilometre from Hotazel and about 50 underground mining will continue for an kilometres from Kuruman. estimated 30 years. The project infrastructure consists Kudumane Manganese Mine is owned by Kudumane Manganese Resources, a joint of an open pit or combination open pit venture between two BBBEE companies, and underground mine, a crushing and Dirleton Minerals & Energy screening plant, mine and the Northern Cape residue disposal storage Ma nga ne se Compa ny and facilities, and various other support infrastructure (NCMC), which own equal and services. shares in the firm. Hong The project will be in full Kong-based manganese multinational Asia Minerals production by the end of Limited (AML) owns a 49 per 2013, with the first phase Cost of Kudumane being bulk sampling activities cent share in both companies, project and is the project’s technical followed by production. “We partner. AML will market are currently at the first and sell the manganese globally and has stage of the project, which is pursuing bulk arranged all project financing in its role sampling,” explains Kudumane Manganese’s as technical and marketing provider. Bold project manager Schalk van der Merwe. “That Moves and NWC Manganese are also will be complete by December. Then we will shareholders in NCMC and Dirleton. be building the rest of the infrastructure, The R1.5 billion project will consist of both including a railway siding for future open pit and underground mining, with the loading of the manganese, housing, offices, intention of shipping an initial 1.5 million workshops and stores. We’re just spending tonnes of manganese ore out by both road money at this stage!” and rail to the harbour at Port Elizabeth The infrastructure to be developed as each year. When the Coega Industrial part of the project includes 5.3 kilometres Development Zone and Deepwater Port of railway siding, an automated 3,500 becomes operational outside Port Elizabeth, tonnes-per-hour rapid loading station, road

r1.5

Billion

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BLUE CHIP MINING & DRILLING

2009 Fabriek St, Kuruman Industrial Area, Kuruman Email: martin@bluechipmining.com | Telephone: 053 7122858


Kudumane Manganese Resources

Traditional dancers - Setswana

trucks with a loading capacity of 300 tonnes per hour, a crushing and screening plant, and storage facilities to handle the mine’s residue. Plans are also underway to construct a sintering plant, which will allow the mine to ship out the ore after undergoing this pre-smelting process. Other infrastructure being developed includes roads and general developments in and around Hotazel such as housing, schools, and a hospital.

As the project is located in the remote and harsh environment of the Kalahari Desert, bulk services had to be laid down from scratch at the outset. “That has been our biggest challenge,” admits Van der Merwe, “getting bulk services in such as water and electricity.” However, despite the challenges, it is the simplicity of the project that defines it, says Van der Merwe. “The operation is a

“The operation is a simple set-up with no major technology involved—it is a simple blast-and-haul mining process” Be africa | 77


RESTORING BUILDINGS, BUILDING COMMUNITIES

Tel: (051) 403 0400 Fax: (051) 4030450 info@ruwacon.co.za www.ruwacon.co.za P.O.Box 13596, Noordstad 9302, 6 Mimosa Street, Bloemfontein

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Kudumane Manganese Resources simple set-up with no major technology involved—it is Ruwacon has a reputation for being a dependable, a simple blast-and-haul professional company operating according to industry mining process. The plant standards, international best practices and uncompromised itself is also very simple. business ethics. Ruwacon recently entered the mining There’s no technolog y industry by engaging in a civil earthworks project with involved in the first phase: Kudumane Manganese Resources in preparation for the construction of a railway line and internal roads. for the next five to seven Our scope of expertise ranges from construction, years, it is a simple process. maintenance and repair as well as civil contracting This keeps the level making us one of the preferred construction companies of capital investment to a growing number of clients in the mining industry. low as well.” Ruwacon’s mission is to complete every project The operation occupies successfully, within budget, on schedule and with one of the poorest regions impeccable quality. www.ruwacon.co.za in the whole of South Africa, and Kudumane Manganese hopes that its social and labour plan will have a positive impact on surrounding communities. “The social and labour plan makes provision for many different activities we must undertake according to the Mining Charter in South Africa.” Under the Mining Charter, mines should work together and pool their resources in order to maximise their benefit to an individual area, he explains. “So we’re now negotiating with other mines to see what is already in place; and at the same time we’re talking to local communities to

Ruwacon

2013 End of year target for full production Minister Shabangu

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see what is outstanding and what we still need to do.” The company has recently met with the regional council to identify the activities in which it can participate. The mines in the area are looking at developing Hotazel; as well as the housing, schools and hospital, the mines hope to bring in a better water supply, as the current supply is not sufficient for the population. Also on the agenda is the renovation of electrical power lines. “This is the poorest part of our country, and anything that is of assistance is greatly appreciated by everybody,” says Van der Merwe. “There’s a lot of participation locally and a welcoming environment, ensuring everybody benefits.” The company also has a robust plan in place to employ local people. “As part of our social and labour plan, 80 per cent of our skilled workers must come from the local community; then we aim to ensure that through skills transfer, 100 per cent of our workers will come from the local community in the future. We will achieve this through giving out bursaries, training, or whatever is needed; but eventually that’s our goal.” The bulk of workers will be sourced from within the region’s John Taolo

Gaetsewe District Municipality. Once fully operational, the project will give preference to the locally unemployed wherever possible, and only where local employees cannot be sourced with the requisite skills and experience will national recruitment take place. Specific areas that will benefit from the employment of

“You need to be a low-cost producer and if you can’t do that you’ll be priced out of the market” 80 | Be africa


Kudumane Manganese Resources

Suzuki, the late Mr Sisulu, former chairman of KMR, Minister & others

between 200 and 300 people directly and up to 300 indirect employees will be the Joe Morolong Local Municipality, the District Management Area, Hotazel as a whole and thereafter the rest of the province. Up to 500 people will be employed during the construction phase. In terms of the environment, the operation’s simple nature means that risks are fairly easy to assess, says Van der Merwe. “In essence there’s not a lot of waste from our mine. However the biggest risk is fuel: we store a lot of fuel on-site for our equipment, so that’s our biggest environmental risk. The rest is simple, it’s all from the mine—issues such as dust, for

example. But there’s no hazardous material from the mine itself.” The key to success on this project has been keeping things simple and costs down, says Van der Merwe. “The biggest thing for us is making sure our capital is low. You need to be a low-cost producer and if you can’t do that you’ll be priced out of the market. In a sense, there is nothing exceptional about our project: it’s really very simple,” he concludes. For more information about Kudumane Manganese Resources visit: www.kmr.co.za

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China Africa Resources

A sign of things to come

Chief executive officer Roderick Webster explains how the company’s operation in Namibia can be a springboard to greater success for not only China Africa Resources, but its parent companies as well

written by: Will Daynes research by: Jeff Abbott

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The metallurgy of the mine is complex, with multiple product streams


China Africa Resources

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ocated on the southwestern tip of these resources, it was determined that the Africa, the dry lands of Namibia estimates made within the CPR could be provide not only a home to more established and validated through the use than 2.3 million inhabitants, of 3D modelling of the available data and but to a bustling mining sector through diamond drilling. that provides approximately 25 percent of While the metallurgy of the mine is the country’s total annual revenue. complex, with multiple product streams, The fourth largest exporter of non-fuel the significant advances that have been minerals in Africa, and the world’s fourth made over the past three decades in largest producer of uranium, Namibia is extractive metallurgy mean that it is also rich in the likes of gold, tin, tungsten, highly likely that any future metallurgical copper, lead and zinc. plant will have a vastly different design, It is in the northwest of the country that process detail and recovery to that which China Africa Resources (CAR), a joint venture was previously in operation. company between ECE and The geological component Weatherly International, of the feasibility study can be found undertaking comprises shallow RC drilling to assess the upper work on the Berg Aukas project. An active explorer regions of the project, in Namibia, ECE holds 18 diamond drilling of the Proportion of Namibia’s exploration rights that cover deeper resources to validate total annual revenue an area of approximately and extend the historical derived from mining 7146 square kilometres and resource, the compilation is the majority shareholder of data and subsequent of CAR, owning 65 percent of the business. development of a complete 3D computer Weatherly, meanwhile, has a 25 percent model and the reporting of all resources. shareholding. Its role in the joint venture “The base strategy, as was set out is to provide all the necessary management during the early days of the joint venture,” services to CAR for an interim period. explains chief executive officer, Roderick According to a competent person’s report Webster, “is for CAR to take the Berg Aukas (CPR) carried out on the project, the project through to its feasibility and then historical non-compliant mineral resource to see if it can be developed into a small estimate for December 1977, just prior to the lead-zinc mine. To this end, we have been mine’s closure, indicated that significant, extremely busy over the last year, drilling high grade, lead, zinc and vanadium close to 6000 metres of deep, diamond mineral inventory remained in the ground. drill holes and uncovering a number of While insufficient data previously existed exciting intersections.” to properly establish the exact location of Managed by Weatherly, pursuant to

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The Berg Aukas project is recognised as a very high grade mine

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the terms of its management services agreement, the feasibility study is expected to cost $3 million over the full period. “With the drilling phase now close to completion,” Webster continues, “we are proceeding into the metallurgical phase of the study. Upon determining what kind of flow sheet we will require, we can then complete the feasibility study. This we hope to have achieved by the end of 2013.” Recognised as a very high grade mine, the Berg Aukas project is seen as a small, yet very profitable development. More importantly to CAR, it is an undertaking that it hopes will establish the business within the market as good, competent operators, while helping to further build on the relationship bet ween Weatherly and ECE. “It is quite clear to us,” Webster states, “that ECE has aspirations on being a much larger player on the world stage and is actively seeking ways to achieve that goal.” One of the ways in which ECE is doing so is by seeking partners that understand what it is like to operate in core western markets. As such, the partnership between ECE and Weatherly is very much a mutually beneficial arrangement in that the latter is quite familiar with the ins and outs of being a publically listed company on the London Stock Exchange and can claim to be experienced hands when it comes to conducting operations throughout Africa. While the immediate focus for CAR revolves solely around the successful development of the Berg Aukas mine, its long-term strategy is to build a profitable


China Africa Resources

Aerial Berg Aukas

and widely based resource business that may ultimately include the acquisition of additional assets from Weatherly, ECE or through third parties. “As far as the immediate future is concerned,” Webster says, “I do not see the demand for minerals diminishing, particularly with all the major global markets remaining major consumers of various metals. While it is true to say that it is becoming more and more difficult to mine these metals and that they are increasingly being sourced from countries that have a fairly risky profile, with demand still exceeding supply the mineral resources market has a strong future ahead.” One of the possibilities for CAR in the years to come could see its parent

companies turn their attention to the potential amalgamation of a number of assets. “It is well known,” Webster concludes, “that ECE has been exploring Namibia for quite some time and boasts a number of projects that it is keen to expand upon. Together with its access to projects in China and other countries such as Australia, what we potentially envision over the course of time is a consolidation of those assets to form a much larger, successful company with a view to a full London Stock Exchange listing.” For more information about China Africa Resources visit: www.chinaafricares.com

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Growing new routes

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Intercape Chief commercial officer Danie du Toit talks about a phase of expansion at South African coach services company Intercape, and the latest luxurious addition to the Sleepliner fleet

written by: Gay Sutton research by: Paul Bradley

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In house brake testing


Intercape

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ust two years ago, travelling from Lilongwe in Malawi to Cape Town in South Africa, a distance of over 4,000 kilometres, would have entailed either an arduous and very lengthy car journey, or an expensive and often unreliable flight that might have included changes in Johannesburg and Harare, Lusaka or even Nairobi. Such journeys notoriously included long delays and interminable airport waiting times with, of course, the always present fear that your baggage will not arrive at your destination with you. Today, that spectacular and epic journey is possible in comfort. One simple ticket transaction can procure the entire trip on one of the world’s most luxurious coach networks, cared for by staff trained and equipped to the highest standards of safety and service. All this has been made possible by the rapid international expansion over the past two years of South African coach operator Intercape. “There has been a tremendous increase in demand for our services,” explained chief commercial officer Danie du Toit. “After two years of expansion, we can connect all major cities within seven countries; South Africa, Namibia, Botswana, Zimbabwe, Zambia, Malawi and Mozambique. And the service we provide is of the same high standard throughout, so our passengers know exactly what they will get. This has been a great differentiator for us.” It’s a tough business to be in, particularly in Africa where the road infrastructure and public driving standards pose significant challenges. Many operators have tried it and

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Intercape

“We introduced the Sleepliner coach in 2005 and it has set the trend in the market” failed, but Intercape has developed a highly effective operational model over some 30 years. “It’s not easy to get right,” du Toit warned, “but we have maintained a culture of improvement throughout this time, and have improved our service year on year. Ultimately, success is a combination of the type of vehicle you put on the roads, the infrastructure you put in place to ensure the service is always reliable, comfortable and safe, and it’s down to developing business processes to deliver the same standard of service regardless of location.” Intercape’s model is based on a blueprint of best practice that is rolled out throughout the enterprise. “One element of this is that we have a set of policies and procedures that cover everything from fleet maintenance and ticket sales through to driving standards, HR and finance. Alongside this, we have an integrated IT system which is the backbone by which we run the company.” Developed in-house and continuously improved and updated, the IT system can be accessed from anywhere in the extended enterprise. That might be staff looking for real-time data and reports, drivers and mechanics managing the coach

fleet, booking staff and external agents using the integrated ticketing processes or the passenger looking for booking information online. Running a successful transport network the size of Intercape’s requires a very extensive sales and fleet support infrastructure. There are currently 30 Intercape sales offices and hundreds of authorised sales agents selling tickets across southern Africa. Meanwhile, to keep the coaches running reliably and safely, Intercape has a network of six technical depots in South Africa. Significant investment has already gone into creating a similar support

Wash bay

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Intercape

G7 Interior

network for the cross-border service. There The vision is to continue expansion are currently depots in Windhoek, Namibia, through southern Africa, and to explore and Beira in Mozambique, and the company other transport-related revenue streams. is exploring the feasibility of opening further “We are already hauling large trailers capable of carrying seven tons of luggage depots in Zimbabwe and Zambia. The expansion programme has undoubtedly and freight behind each of our cross-border been a financial and operational success. In just coaches,” he explained. “And we are looking two years Intercape has moved from being a at ways of increasing freight transportation. purely South African operation, to generating We also believe there is a big market for some 30 percent of its business through fixed-term people transport contracts with, for example, the mining cross-border services. But this, du Toit believes, is only companies. We are looking the beginning. “Our next to enter that market.” Intercape’s env iable step is to create connecting services within the borders of reputation for comfort, our neighbouring countries, reliability and safety is due Intercape business creating internal transport to its willingness to invest now generated through networks just as we have not only in processes and cross-border services done in South Africa.” infrastructure but also in

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“We have a set of policies and procedures that cover everything from fleet maintenance and ticket sales through to driving standards, HR and finance” the very latest vehicle technology. “We introduced the Sleepliner coach in 2005 and it has set the trend in the market, bringing us great success,” du Toit said. Sleepliner is a concept unique to Intercape, and is a blend of style, technology and intelligent design. The chassis and engine come from Volvo in Sweden and the latest models comply with the rigorous Euro 3 Emissions Standards while the double deck coach body is imported

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from the coach manufacturer Marco Polo in Brazil. Alongside the double deck coaches, Intercape runs a fleet of single deck coaches that combine a coach body from Irizar of Brazil with a Volvo chassis. “We are now in the process of updating the Sleepliner with the latest G7 model,” he continued. The first new G7 model Sleepliners are now in service, and are easy to recognise with their modern, sleek and


Intercape

Customers can be assured of a pleasant experience

aesthetically pleasing lines. Yet the real improvements in customer comfort and safety can be found inside. There is ambient LED lighting activated by motion sensors, and memory foam seats that recline to 150 degrees and are positioned to provide more leg room, making long distance journeys a much more comfortable experience. The new coaches also cater for business travellers and those with an active mind. Power sockets are provided for laptops and cell phones, transforming the travel time into a fruitful working opportunity or leisure experience. There are broader entrance doors, and these are the first coaches in southern Africa to come equipped with a wheelchair to transfer passengers with disabilities

from the entrance to their seats. From the technology perspective, the cab is equipped with the latest in situational awareness for the driver while the engine compartment has been updated to include the most advanced fire detection and suppression systems. So, as Intercape expands its routes and support network across southern Africa, and equips it with the latest in-vehicle technology, customers can be assured of a pleasant experience on those long scenic journeys. For more information about Intercape visit: www.intercape.co.za

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ON the road to growth 98 | Be africa


Kenya Vehicle Manufacturers (KVM)

Joseph Otieno, acting managing director, discusses how KVM, and Kenya as a whole, is attracting the interest of some of the planet’s most recognisable players in the automotive industry

written by: Will Daynes research by: Abi Abagun Be africa | 99


Kenya Vehicle Manufacturers (KVM)

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hat the average of our investment in infrastructure,” acting individual knows about managing director, Joseph Otieno explains, present day Kenya “we currently have the capacity to produce most likely extends approximately 6600 vehicles per annum only to its natural working single shifts.” Operating in the five key sectors of wonders, from Lake Victoria, the world’s second largest fresh-water lake, to the open vehicle assembly, bus body building, special plains of the Maasai Mara. What will be less vehicle operations, fabrication and surface well-known is that, in and around its largest branding, KVM also actively engages in the cities, Kenya is fast becoming an area of sale of mega tents. The primary markets great interest for some of the world’s biggest for the vehicles that depart the company’s vehicle manufacturers. factory are located across East Africa and Incorporated in July 1974, at first under the include countries such as Tanzania, Burundi, name Leyland Kenya Limited, the company Uganda, Zambia and of course Kenya itself. adopted its current moniker By abiding by its guiding in 1989. Production for the principles of quality through company began in 1976, with standards, customer and the first vehicle rolling off supplier intimacy, teamwork and individual employee its assembly line in August participation, environmental of that year. Originally Per annum vehicle designed to produce light and management and production capacity heavy commercial vehicles uncompromised integrity, working single shifts including Land Rovers, KVM is constantly striving to be the benchmark vehicle Range Rovers, Volkswagen Microbuses and Leyland trucks and buses, build and mass fabricator in the region. the model range produced by KVM now “Ever since it became the first vehicle numbers 11 and includes Nissan Series, Land assembly plant to be incorporated in Kenya,” Rover, Foton and Hyundai models. Otieno continues, “KVM has always made KVM is today owned by three major it a priority of the highest order to invest stakeholders, those being the Kenyan in itself through the updating of its factory Government, which owns 35 percent, with world-class equipment, through the CMC Holdings Limited and D.T. Dobie employment and retention of technically and Company, which own 32.5 percent gifted staff and by obtaining all of the respectively. From its plant in Thika, which necessary operational quality certificates, covers an area of 40 acres, 18 of which has including ISO:9001-2008.” been earmarked for further development, In recent years KVM has also become one KVM undertakes contract assembly on of East Africa’s preferred producers of high behalf of its customers. “As a direct result quality buses. From its bus body building

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Kenya Vehicle Manufacturers (KVM) facilit y the company constructs minibuses, and medium and large buses with on board capacity ranging from 29 to 67 seats. Building according to specifications that conform to individual customer requirements, the company has successfully standardised its body frame works by building them off jig. Bus production facilities at the company’s plant are laid out in a flow line, with the actual body building being carried out on a trolley. This layout allows the bodies to be built in advance and temporarily stored away before being

attached to the vehicles’ chassis. Additionally, KVM has introduced a number of key features to its production line including the adding of fibre gas windscreens to the front and rear of its 62 to 67 seat buses. Alongside its bus body building capabilities, KVM has also built a reputation for its ability to construct tough, long lasting truck bodies, designed to suit the intended purpose of individual vehicle types. The company is able to provide its customers in this field with trucks that possess completely covered exterior bodies, back

Apex Steel Limited Apex Steel Limited is one of Kenya’s largest integrated manufacturers and traders of building and engineering materials. From our headquarters in Nairobi, we conduct business throughout East and central Africa. Our primary focus is and has always been to deliver the best solutions to meet the needs of our clients who range from engineers, plumbers, fabricators and construction companies to hardware shops and home builders. With branches across the country, we are able to support our clients and serve them better and effectively. We have also acquired several agencies to distribute some of the world’s unique and number one product brands eg, Graco, Zinga and Bosch just to mention but a few.

2004 marked the birth of our rolling mill division, which manufactures reinforcement bars to BS4449:2005 grade 500. We are also proud to say we are the first steel manufacturer to earn the diamond mark of quality from KEBS, keeping in line with our vision. In October 2010, our light structural mill was commissioned producing angles, flats and window sections to support our engineering clients with quality products. 2012 marks the commissioning of three more lines related to tube manufacturing. Our story has just begun. E. info@apex-steel.com www.apex-steel.com

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bodies with open spaces or with side doors. One of the more exciting on-going developments involving KVM, and other vehicle manufacturers throughout the region, is the growing interest from Chinese vehicle manufacturers. At present, KVM collaborates with the Chinese company Foton Motors, assembling its Foton Sup V Double Cab and Foton Sup V Single Cab pick-up models. Although its operations in Kenya are little more than a year old, the success Foton has already had through its partnership with

KVM means that it already targeting sales of more than 5000 of its trucks across the regional market over the next two years. It is announcements like this that have further drawn the attention of other large players in the sector. “Following in the footsteps of our work with Foton,” Otieno states, “we have received a number of enquiries from other Chinese motor vehicle firms that are interested in the possibility of having their models assembled here in Thika. We are seeing such interest building as

“In recent years KVM has become one of East Africa’s preferred producers of high quality buses”

KVM undertakes contract assembly on behalf of major auto manufacturers

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Kenya Vehicle Manufacturers (KVM)

KVM constructs buses with on board capacity ranging from 29 to 67 seats

more Chinese businesses are now looking to acquire manufacturing capabilities in Africa.” Kenya in particular is a very strategically beneficial place for these businesses to be as it is able to provide the means to penetrate the East Africa market, which many view as a strong area of future growth. KVM’s presence within a country that is rapidly growing into a regional hub for automobile manufacturing is enough in itself to give it optimism for the future. Otieno, however, knows there is a lot more the company can do to capitalise on this. “The sheer number of opportunities, as it

relates to vehicle assembly, that are arising in this part of the world means that we foresee our assembly operations increasing quite dramatically. What we need to do meanwhile is continue to invest in our equipment, our processes and our people. By doing so we will be able to maintain and even improve on the quality levels that we have spent nearly 40 years being known for.” For more information about Kenya Vehicle Manufacturers visit: www.kvm.co.ke

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Gaining national coverage Chief executive officer Francis Mawindi explains how Telecel Zimbabwe plans to deliver mobile phone coverage to 90 percent of the population by 2013

written by: Will Daynes research by: James Boyle

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Telecel Zimbabwe

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Telecel Zimbabwe is the country’s second largest mobile telecommunications provider in terms of subscriber numbers


Telecel Zimbabwe

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cross Africa, the winds of increased demand, and by introducing new change are being felt throughout products and services to the marketplace.” the telecommunications Being an important player within the sector. These winds are being industry, Telecel Zimbabwe’s contributions driven by the rapid movement towards the development of the country’s consumers have been making away from basic telecommunications sector have proven to telephony services to data services. In response be significant. “What we have been doing to this, operators have had to capacitate their during the course of this year,” Mawindi data service provision capabilities in order to continues, “is expanding our coverage to cater to the changing needs of their customers. ensure that the majority of Zimbabweans Aided by the high literacy rate of its people, have access to our services. At present, our Zimbabwe is one such country experiencing coverage stands at close to 80 percent of high levels of demand for data services. the population and we intend to increase In fact, with an estimated 58 percent of this to 90 percent by the end of 2013.” In addition to increasing Zimbabweans accessing the internet today through their coverage, Telecel Zimbabwe mobile phones, the country has made a concerted effort to price its products and services ranks within the top ten African nations as it relates aggressively to ensure that to this trend. they are affordable to almost One of the companies everyone, including those leading the way in responding situated in rural areas. Current subscriber base to the changing requirements, “The vast majority of our and dynamic needs and promotions,” Mawindi says, demands of Zimbabweans is Telecel. With a “have succeeded in bringing and delivering sizable market share of around 29 percent, as value to our subscribers. We were the first recorded at the end of September 2012, Telecel operator to reduce the price of our SIM to just Zimbabwe is the country’s second largest $1, when others’ prices still averaged close to mobile telecommunications provider in terms $20, and we continue to offer best-of-breed of subscriber numbers, boasting a subscriber voice and data bundle rates, the latter going for as low as $0.04 per megabit.” base of over 2.3 million users. “As a business on a growth trajectory,” While boasting some of the most explains chief executive officer, Francis competitive prices available in the Mawindi, “we have been growing rapidly marketplace, the company also prides over the last 16 months. This has coincided itself on its strong customer centric focus with our ability to capacitate our network by and its prudent cost management systems. expanding 2G and 3G coverage, enhancing “Our customer focus,” Mawindi enthuses, network capacity in those areas with “has seen us taking home various national

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awards in recent years, including the Customer Service Excellence award from the Zimbabwe Institute of Management in 2011, to this year’s Call Centre Association of Zimbabwe, Best Call Centre Award. Meanwhile, our embracing of cost management and cost leadership strategies has enabled us to optimise our subscription prices and thus offer great value for money.” One of the significant and notable developments at the heart of Telecel Zimbabwe’s operations today is an extensive network expansion programme. The central theme of this programme is to enable the company to develop sufficient scale and this will be facilitated through the acquisition of more than 575 physical sites across the country by the end of 2012, with an additional 100 to follow in 2013. It is this phase of expansion that will allow the company to achieve its goal of delivering coverage to 90 percent of the population. “Another thing we are doing,” Mawindi states, “is enhancing our 3G coverage to the extent where we hope to have around 275 sites located countrywide. To date, the rollout programme is on track and proceeding well, with all the major cities, towns, rural service centres and highway corridors being covered, and efforts are under way to cover a sizable number of mining and

commercial farming areas, which were previously not serviced. Nonetheless, we still believe that, even within some of the major urban and metropolitan centres, there is a need to optimise coverage and target those black holes that still exist and in the process improve network availability and quality of service.” Recently, the company has been re-certified as ISO 9001 compliant and remains the only certified mobile operator active within Zimbabwe. Naturally

“The company prides itself on its strong customer centric focus and its prudent cost management systems” 110 | Be africa


Telecel Zimbabwe

Telecel Zimbabwe pursues the vision of total customer delight

this is a very important customers at heart. It is also achievement, and indeed a important to point out that significant milestone for the the time is near when no business, and is one that is significant differentiation tied to the system of best will exist between mobile National coverage network operator offerings; operating practices that it planned by the operates under. the difference will primarily end of 2013 “Our re-certification,” be on how we do business.” This ISO 9001 status Mawindi says, “is a clear testimony that our company allows Telecel to eliminate is unequivocally and irrevocably committed waste and duplication, while at the same to achieving excellence in products, services time controlling its operating costs. This and business processes by actively pursuing added value is then passed on to its continuous improvement and sharing the subscribers through lower pricing. vision of total customer delight. In addition “We are currently in the process of the attainment of this status has meant putting the finishing touches to enable that, as a corporate body, Telecel has the the technical deployment of a new AYAYA confidence and assurance that it has its Call Centre system,” Mawindi adds. “Once

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complete, this will drastically improve upon our ability to manage customer relations. This will inevitably result in better customer service delivery, while generating greater customer value.” Challenges, however, do still remain for the company, the major one being that of capitalisation of the company’s mobile network. For some time the country risk for Zimbabwe has remained high, though now

the political landscape has changed with the new coalition government, in addition to the promising economic fundamentals, which have triggered international organisations and the global investing community to show greater interest in the country. For Telecel Zimbabwe, the company has been boldly resilient for quite some time, even in difficult times characterised by economic contraction, hyperinflation,

“The biggest opportunity for us going forward will be in the provisioning of national backbone broadband infrastructure”

Telecel is continuously expanding its network coverage and capacity

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Telecel Zimbabwe

Telecel has won awards for customer service

liquidity challenges and inadequate investments. These factors in the past put enormous pressure on the company’s capacity and capability to capitalise on market growth opportunities. However, once economic stability returned, Telecel was quick to rise to the challenge and take advantage of the new opportunities this presented. “We have managed to secure vendor financing for our network expansion programme,” Mawindi says, “with the bulk of the guarantees coming from our principals.” Despite some of the challenges that it faces in its industry, Telecel’s future is certainly brighter. “We are continuously expanding our network coverage and capacity,” Mawindi concludes. “Our subscriber

growth and revenue performance are both healthy, and we believe that we are in a good space in the market. The biggest opportunity for us going forward will be in the provisioning of national backbone broadband infrastructure, utilising fibre technology to connect and gain access to submarine cables coming into and leaving the country. This will allow us to further reduce mobile broadband connectivity costs and improve penetration rates, thus ensuring an affordable universal service to all Zimbabweans.” For more information about Telecel Zimbabwe visit: www.telecel.co.zw

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African Energy

A decade of

reliability Managing director of African Energy, Lincoln Dahl, discusses how his company has remained at the centre of a rapidly evolving market

written by: Will Daynes research by: Jeff Abbott

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African Energy supplies solar, wind and power backup equipment


African Energy

I

n a world where looking to the future is the norm, it can be difficult to comprehend how much can happen in a decade. It is hard to imagine that it was ten years ago that the Euro currency first entered circulation; George W. Bush was one year into his second term in office and Pete Sampras was still dominating the world of tennis with victory at the US Open. Yet if a decade feels like a long time ago for us, it is virtually a lifetime ago for certain industry sectors in Africa. One such sector that has been built up from nothing in that time is renewable energy. The year 2012 marks the tenth anniversary for African Energy. Serving the continent’s leading renewable energy companies, African Energy supplies solar, wind and power backup equipment on a wholesale basis to more than three hundred partners. Direct distributors for the likes of Xantrex/Trace, Morningstar, Suntech Power, Magnum Energy and others, the company specialises in creating reliable distribution channels that enable its dealers to expand their markets for renewable energy. “One of the things I noticed in my years of working in Africa as both a diplomat and within the solar industry,” explains managing director Lincoln Dahl, “was that there was a distinct lack of distribution as it relates to renewable technology. This also meant that very few people had any knowledge of what to do with the technology should it ever become available and this meant that there was a huge gap in the market that needed filling.” The company began life as a small

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operation, working out of the backroom of Dahl’s home, catering for a handful of customers. What it soon discovered was that once people were provided with access to the necessary equipment they soon found it easy to develop a market and find customers for themselves. “A decade ago,” Dahl continues, “solar energy was very much a drag and drop business in Africa. The fact that system design, and in some cases even installation, was done by people outside the continent

meant that local knowledge was always in short supply. What we did early on was commence with a pretty aggressive training programme that we invited manufacturers to become a part of. To date we have conducted in excess of 25 of these programmes and this has not only helped us find customers, but also helped them to develop.” Focused solely on the African market, African Energy is perhaps better placed than any other to express just how much potential the continent possesses for

“If a decade feels like a long time ago for us, it is virtually a lifetime ago for certain industry sectors in Africa”

A comprehensive training programme is in place

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African Energy

Africa represents a new opportunity for international companies

renewable energy business. “The first thing Africa has going for it,” Dahl states, “is that it is not Europe. Many of the major European markets’ renewable energy programmes and projects are increasingly being scaled back or mothballed altogether. What Africa represents is a new opportunity for international companies to expand their operations. Africa is also one of those rare parts of the world that hasn’t finished growing yet and as such infrastructure build-out continues to increase with each passing year.” Increased stability and the emergence of representative governments have also helped the business considerably in the last decade, however it is inevitable that when developing a young industry, difficult

challenges arise. Needless to say, African Energy has had to negotiate several such hurdles in its lifetime. “Operating within a young, growing market,” Dahl says, “you tend to spend much of your time educating people and businesses. This process begins with our own employees, educating them not only about the customers and the marketplace, but the technology as well. The customers themselves also require the same degree of training and support, as do the manufacturers. This often begins by opening their eyes to the potential that this continent has and ends with us pretty much physically hauling people over to Africa where they invariably fall in love with what the market has to offer.” Attaining finance in order to carry out

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African Energy specialises in creating reliable distribution channels

The company has strong c

“Customers say they deal with us because of our honesty and our steadfast commitment to quality” work in Africa is another challenge that Dahl is all too aware exists. “As a company, we are entirely self-financed. The reason for this is simply because of how difficult it is to secure financing in this part of the world. What this does mean however is that our growth to date has been 100 percent organic. While in some regards that may have slowed us down a little, it has also led to the forming of extremely tight relationships between us

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and our customers, relationships that have gone a long, long way to making African Energy a success.” Having celebrated ten years in business, the company has recently made an effort to map out a forecast for what it predicts the next decade will hold for not just African Energy, but Africa as a whole. What it anticipates is the emergence of two very different Africas, one consisting of countries


African Energy

customer networks across Africa

Long-lasting relationships are a hallmark of the company’s success

with democratically elected, representative governments and the other with countries that have not evolved in the same direction. For the company itself, continued success relies upon it taking up more active positions in the countries in which it operates. “We have evolved to the point where today we have strong customer networks across Africa,” Dahl enthuses, “and now comes the time where we need to bring the product closer to these customers. In the last six months we have opened a warehouse in Botswana and in the years to come we expect to introduce stock to the majority of countries where we are active.” On numerous occasions over the years Dahl and his team have taken the time to look back on what they have achieved together

and, as he reveals half-jokingly, often ask themselves are they successful because of what they do, or in spite of it? “When we ask our customers why they deal with us,” Dahl concludes, “they all say it is because of our honesty, our belief in establishing healthy, long-lasting relationships and our steadfast commitment to quality. There are a lot of things that have worked for us over the last ten years, but I think the most important is remembering that our customers expect African Energy to be the reliable supplier.” For more information about African Energy visit: www.africanenergy.com

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Making waves 122 | Be africa


AGS - Africa Geophysical Services

Country Manager Shane Johnson explains how a team of experienced seismic experts are paving the way for other companies to reap the rewards that East Africa has to offer

written by: Will Daynes research by: Richard Halfhide Be africa | 123


W

hile countries such as Tanzania, Kenya and Mozambique are fast on their way to becoming established centres of economic prosperity, in part due to the extraction and utilisation of their considerable natural resources, the east of Africa remains home to a great many unexplored areas. It is because of the success of national and international companies in the region that these unchartered swaths of land have become of increasing interest to all manner of organisations. Exploring this land however can prove to be an expensive gamble, with companies standing to lose considerable amounts of capital should they choose to lay down infrastructure in an area that fails to yield results. In order to avoid such scenarios, these companies endeavour to acquire as much information about the potential profitability of a property before further work takes place. It is at this point where seismic experts like AGS come into play. Registered in Oman, AGS was established by managing director Steven Thomas, who subsequently brought in Shane Johnson as a country manager. “What we made it a priority to do from day one,” Johnson explains, “was to bring together a number of experienced individuals that possess a great deal of knowledge in their specialist fields, old seismic hands if you will, and then progressively build the business up from there.” The first contract awarded to AGS was on behalf of Dodsal Hydrocarbons and Power, conducting work for them in Tanzania’s

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Testing loaded shot point


AGS - Africa Geophysical Services


RUVU basin. This particular project required the company to carry out 550 kilometres of 2D land seismic in an area 60 kilometres west of the city of Dar Es Salaam. “We began this programme of work in late July 2011,” Johnson continues, “completing it in November. Following this we were awarded an extension of several hundred kilometres, a task we completed in between the wet seasons from January through to March. Most recently we completed our third extension programme in the RUVU basin during July, August and October.” On the heels of its success in the basin, AGS is now in the process of mobilising for a contract it was recently awarded by Ndovu

Drilling operations at low tide

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Resources, a wholly-owned local subsidiary of Aminex. This particular contract will see AGS carrying out 2D seismic over a distance of 890 kilometres, stretching down to the Mozambique border. One of the core characteristics that defines AGS, and has contributed significantly to its success over what is a relatively short space of time, is its ability to maintain lowoverhead costs. “Unlike a lot of the big companies that we have previously worked for,” Johnson states, “we do not rely on large support networks in order to carry out our operations. What we do is hire personnel that possess a wealth of experience working in different fields. Between myself and Steven


AGS - Africa Geophysical Services Thomas there is something like 55 years of seismic experience alone, and having this level of knowledge in-house effectively allows the company to provide its own support systems. We believe wholeheartedly that we understand better than most how a crew needs to function and what it requires to be successful in the field, and we are able to deliver this without suffering from any drastic overhead costs.” The use of the latest recording technology and quality control systems has always been at the heart of the work the company undertakes, however it is its personnel that AGS credits with its success when it comes to working in areas of diverse culture and

“AGS always looks to integrate itself into communities” extreme environmental sensitivity. “Our staff,” Johnson enthuses, “have operated in Africa for some considerable time, with many bringing to the table experience of working in countries such as Tunisia, Morocco, Libya and Nigeria. In this time they have developed the ability to work through all manner of challenges, while generating innovative solutions that acquire high quality data in a safe, timely and efficient manner.” Understanding the impact its activities can have on the local population is something AGS takes very seriously. “We strive to employ and train as many locals as we can in the areas in which we operate,” Johnson says, “as well as purchase locally, wherever possible. As a company, AGS always looks to integrate itself into communities, understanding the value that can be generated by working alongside, and in partnership, with the local population.” This level of commitment to social responsibility also extends to the company’s environmental stance. Protecting the environment, preventing pollution and seeking improvements in the efficient use of natural resources are promises the company makes prior to undertaking any task. Equally as important is its ability to ensure, to the highest possible degree, that its products and services will not cause injury or adversely harm its surroundings. AGS’ goal, in the short-term at least, appears

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Small blow out charge going off during recording ops


AGS - Africa Geophysical Services to revolve around steady, calculated growth. “During the course of the next 12 months,” Johnson reveals, “we plan to start up a second land-sized crew, which will likely be based in Kenya. Once deployed, we will be able to monitor how we can effectively operate with two crews at work at the same time.” One of the things AGS is extremely conscious of is the danger that comes with young companies growing too big, too quickly. “If expansion isn’t handled correctly,” Johnson says, “you run the risk of having crews that don’t function safely and as a result operations could become unmanageable. That is precisely what we don’t want to see happening and want to avoid at all costs.” All going well, the success of a second land-sized crew in Kenya will then act as a springboard for what Johnson hopes will be greater international expansion for AGS. “Once we have shown to be able to operate multiple crews in a safe and effective manner we can then look ahead to establishing a large Vibroseis crew in Oman. This would most definitely represent a huge step forward for the business, but in order to get a foot in the door we have to be able to produce a curriculum vitae that provides proof of our capabilities. We believe our work in Africa up until now, and in the months to come, is the best form of proof we could possibly offer to this effect, and we are confident our clients would agree.” For more information about AGS - Africa Geophysical Services visit: www.ag-services.org

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A fresh approach

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Afrifresh Group Afrifresh Group has developed an integrated agricultural business model that is improving farming and export efficiency in Africa

written by: Gay Sutton research by: Jeff Abbott

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Citrus planting in Western Cape


Afrifresh Group

T

he South African fresh produce industry has changed beyond recognition since the introduction of the Marketing of Agricultural Products Act in 1997, with a proliferation of small entrepreneurial companies taking advantage of the deregulation and exporting locally grown fresh produce worldwide. In the citrus fruit and grape industries in particular, many of these companies have either closed down or remained relatively small and locked in to their original size and form. Afrifresh is one company that has broken that restrictive mould. The company has grown exponentially since 1999 when two of these smaller entrepreneurial entities joined forces to develop a more powerful business. The original Afrifresh, owned and managed by Chris Conradie, who is currently the Group CEO, was launched in 1992 as a fruit importer and moved into exports in 1997 on deregulation. Sunpride, meanwhile, had been founded in 1997 by Roy Fine and the well known Fine Family in partnership with the international Gerber Group. The merger enabled the two entrepreneurs to bring together their extensive knowledge and experience of the Johannesburg and Cape Town produce markets, with over 100 years of family history in agriculture in South Africa, and develop both brands under the Afrifresh name. Together they have taken what was a citrus and grape export agency enterprise and turned it into a truly international integrated agricultural business with offices around the world. At the heart of the group is a portfolio

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solutions to ions and provide these lut so gy olo hn tec n tio tes informa company with Paltrack (Pty) Ltd crea y South African owned oll wh a is It . ts en em re license ag the fruit industry under e Imperial Group. majority shareholder, th the South and related services to s em st sy n tio ma or inf supplier of tablished to Paltrack is the leading y services have been es lar cil an of er mb nu A ustry. African fruit export ind mation provision e mainly related to infor ar s ice rv se e es Th s. ion e solut compliment the softwar change. s to ease information ex and setting of standard

Exporting

Business Rules & Standards

Paltrack (Pty) Ltd. | Old Mutual Building, Cnr Oxford & Queen Streets, Durbanville, 7550 PO Box 3755, | Durbanville, 7551 | Tel: +27 21 970 2777 | Fax: +27 21 970 2888 Email: info@paltrack.co.za | www.paltrack.co.za


Afrifresh Group of 22 Afrifresh primarily citrus and grape farms that are spread across South Africa, a configuration deliberately designed to reduce climate related risk and extend the supply season. The farms, as well as a number of third party farms, are supported by a comprehensive centralised management framework that provides high levels of expertise and economies of scale. And this is where the strength of the Afrifresh business lies. “Normally, a farmer would need to be a financial expert to deal with the banks, a technical boffin to understand technical issues, a marketing whiz to travel abroad and sell product and so on,” explained Roy Fine, development director at Afrifresh. “We’ve taken all of these administrative functions into a central point at head office so the farm managers can focus purely on product quality and tonnage / production.” Significant investment has been made into the farming side of the business in terms of the latest product varieties, cold storage facilities, packing houses, equipment, support, training and materials. For example, a highly qualified team of technical experts is in continuous contact with the farms providing advice on the latest farming methods, new varieties of

Farming along the Orange River

“We’ve taken all administrative functions into a central point at head office so the farm managers can focus purely on product quality and production” Be africa | 135


products and ways of improving on quality and productivity. The entire business derives strength from the expertise that has been cultivated across all disciplines at the head office. The procurement division sources everything the farms need from chemicals and fertiliser through to packaging and equipment, and has been able to reduce costs and wastage significantly through collective buying linked to accurate estimates of crop volumes which are produced through a purpose designed forecasting system. The marketing division, meanwhile, sells around the world and is supported by a network of distribution and monitoring

Farming in the Northern Cape

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offices located as far afield as Rotterdam in Holland and Shanghai in China. Many of these double as sales and quality control offices. Head office manages many other corporate disciplines including logistics, shipping, quality control and warehousing. In South Africa, packed produce is transported from the farms to one of a network of cold store warehouses where it is containerised and stored before being shipped. From the outset, Conradie and Fine, together with their strong and experienced senior team, had a strong vision for growing the business into a global enterprise, and quickly identified agro-processing as a viable opportunity for diversifying and developing


Afrifresh Group

“We take sun dried raisins from our own and third party farms, sort, grade and package them and supply them both for export and for the local market” a further product stream from the existing farm produce. Today, around 70 per cent of farm output is still exported. The remainder is either sold into the local market or now goes into the lucrative agro-processing arm of the business. The company began this trend by diversify into wine making in 2002 when it launched its own wine business, African

Pride Wines, from Stellenbosch, one of the three major centres in South Africa’s world renowned Cape winegrowing region. Building on the success of this enterprise, the company has moved into a fruit juice production business, together with a long established operator. Rather than discarding fruit that had perhaps been marked and was not considered suitable for export or the local market, it is converted into juice at a factory in Cape Town and distributed to restaurants, hotels and the retail sector. The business plans to open another plant in the Johannesburg area in the near future. A further agro-processing venture began in 2008 with the acquisition of a raisin business, Desert Raisins. Then in 2011 the company acquired Fruits du Sud, a major state-of-the-art raisin factory and combined the two businesses into a single large raisin sorting and packaging concern. “We now have a large raisin packaging factory in Upington in the Northern Cape where we take sun dried raisins from our own and third party farms, sort, grade and package them and supply them both for export and for the local market.” According to Fine, the strategy going forward is to continue growing and diversifying the business. “We have recently

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“We are looking to acquire processing businesses where we can provide security of supply from our own farms” acquired significant farm holdings in Zimbabwe where we’re growing a variety of new products including macadamia nuts, tea and other fruits such as apples and bananas, and we’re planning to expand further into sub-Saharan Africa. At the moment we’re looking at opportunities in Kenya, Zambia, Mozambique and Tanzania where we’ll be broadening our product base, as we have in Zimbabwe.” From the agro-processing perspective the company is always looking for further

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opportunities to add value to its existing product range. “So we are looking to acquire processing businesses where we can provide security of supply from our own farms, and enhance the global reach of the product through our marketing capabilities,” he continued. Afrifresh also has a commitment to working with its local communities. “Our aim is to uplift the whole community and create jobs and income opportunities,” Fine explained. An excellent example of


Afrifresh Group

Packhouse

this is the community farming initiative in South Africa. Supported by the International Development Bank as well as the Landbank and other funders, the company is working with several local groups to develop community land for farming, including a massive 500 hectare project in the Kakamas area on the Orange River in the Northern Cape, enabling the local people to be trained, given work on the land, produce food and export it to generate revenue. Since its inception as a group in 1999, Afrifresh has grown on the back of a passionate and dedicated team with enormous Intellectual Property, from a turnover of approx R400 million to over R1.6 billion today. “The driver behind that

growth is a fundamental belief that the supply of food is a major issue in the world today,” Fine said. “The global population is growing incredibly rapidly and there is a strong emerging market in many third world countries where people are earning more and moving from the consumption of cereals to fresh fruit, vegetable and proteins. Against this urgent need, you have diminishing arable land and water availability.” The Afrifresh growth plans are strong in all these areas, even to the extent that the company is beginning to look into protein farming to produce beef and lamb, and has acquired two large units already. Farming permanent crops, as opposed to cash crops such as cereals and potatoes, however, requires commitment, planning and patience. With macadamia nuts, for example, it takes six years of careful cultivation before a new tree will begin to bear, and the time scale can be longer for some fruits. “Farming is a long-term and capital intensive business, and we’re in it for the long term. “Our group is always looking for new opportunities and to do joint ventures with investors, funds and international agricultural companies. We also manage farms on behalf of land-owners, communities and investors,” Fine concluded. For more information about Afrifresh Group visit: www.afrifresh.co.za www.africanpridewines.co.za www.fruitsdusud.co.za

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Included The BE Mining Directory showcases leading mining organisations from across the world, ranging from big corporations to junior mines and their supply chains.

Be seen throughout our portfolio of magazines: •BE Mining Directory •BE Mining •BE Weekly •BE Monthly •

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Profile for Business Excellence Magazine

BE.Africa  

Issue No.4

BE.Africa  

Issue No.4

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