mining_indaba by lanyuehua


									       Anglo Zimele                                                                                                                           ANGLO
       Independence through enterprise development

“Entrepreneurship has a distinct role to play in South                                 to ‘stand on its own feet’ and progress along the growth curve.
African society and its economy,” says Nick van                                        Much was taken from the concept of the ‘dual-logic economy’.
Rensburg, managing director of Anglo Zimele, the two-                                  Leading companies like Sony, Canon and Toyota were supported
decade-old enterprise development initiative of mining                                 by a network of small businesses that produced components for
company Anglo American South Africa.                                                   the final product.

Over the years, Anglo Zimele, Anglo American’s enterprise development                  The winning formula was a combination of the strength of the
and investment fund, has created numerous sustainable, commercially                    first-logic economy – world-class business, size, technology and
viable enterprises and empowered entrepreneurs to operate in the                       innovation – with the support of the second-logic economy with
mainstream economy.                                                                    its entrepreneurial focus and energy in providing particular services
                                                                                       or products. Anglo American owes much of its success to the
Currently, through its three funds, Anglo Zimele invested                              transformation of its supply chain and the adoption of this concept
R318 million into 509 businesses, which collectively employ                            by outsourcing certain services to the small and medium enterprise
9 514 people. The Supply Chain Fund, the Anglo Khula Mining Fund                       sector. Examples of these include engineering repairs, manufacturing
and the Small Business Start-Up Fund have interests in a diverse                       of mining products, waste reclamation and recycling, conveyor belt
portfolio of enterprises with a collective turnover of R1,5 billion.                   maintenance, catering and consulting services.

Anglo Zimele is currently launching a fourth fund for enterprise
development, which is designed to help women, the disabled and
young people in Anglo American’s mining communities to establish
and run their own small businesses with entrepreneurial skills
training as a starting point.

                                                                                       The Black Wattle coal reclamation project, operated by Zingaro Trade 51 (Pty) Ltd, a
                                                                                       joint venture between Eyethu Coal and Geovicon, is one of the Anglo Khula Mining
                                                                                       Fund’s flagship investments.

Bush encroachment by the Swarthaak (Acacia Mellifera) is a huge problem in the
Northern Cape. Kalahari Verspreiders, a beneficiary of the Small Business Start-up
                                                                                       The shaping of Anglo Zimele
Fund, was established with the support of Kumba’s Sishen Mine as a self-               “A model for enterprise development, such as Anglo Zimele’s, is
sustaining enterprise to clear the veld of Swarthaak and turn it into firewood to be   moulded over many years, building on the successes and learning
sold in the Kruger National Park.
                                                                                       from the failures. We have learned that there is not a ‘one size
                                                                                       fits all’ approach to developing businesses and entrepreneurs,”
                                                                                       says van Rensburg.
The roots of Anglo Zimele
Long before broad-based black economic empowerment (BEE)                               “The trick to sustainable enterprise development is a strategic
became a legislated mandate in South Africa, Anglo American started                    combination of financial support, through equity or loans, and
investing significant energy and resources into the development of                     hands-on, incubator-style mentorship,” he adds.
emerging black business. The lessons learned during these early
years have sculpted the initiative into the enterprise development                     Over the past two decades, Anglo Zimele has become a catalyst
thought leader that it is today.                                                       for emerging black business, empowering black entrepreneurs
                                                                                       through the creation and transformation of small and medium
Anglo Zimele’s successful evolution can be attributed to its holistic                  enterprises (SMEs). The knock-on effect has been sustainable
incubator approach, which combines funding with hands-on support.                      job creation and socio-economic development in predominantly
This, over a predetermined time period, allows the investee company                    peri-urban mining communities.

Transforming South Africa’s mining landscape
The Anglo Khula Mining Fund handles mining-related investments
and is a joint initiative between Anglo American and Khula Enterprise
Finance Limited, a government-owned entity that promotes SME
development. The fund assists emerging, black-owned mining companies
with equity and loan finance, as well as technical support during the
high risk exploration and pre-feasibility phases of projects, bringing
them to commercially bankable positions.

Without the fund, many black-owned junior mining companies would
not be afforded the opportunity to operate in the mining sector.
The fund provides business guidance and support, and relies on the
technical, engineering and mining expertise of Anglo American.

                                                                                  Bird Machines, an Anglo Zimele Supply Chain Fund investee company, designs,
                                                                                  manufactures and services a range of trackless underground mining machines such as
                                                                                  this 15-ton dump truck seen in operation here.

                                                                                   From Kathu and Kimberley in the Northern Cape, to Witbank in Mpumalanga;
                                                                                   from Burgersfort in the Limpopo province, to Rustenburg in the North
                                                                                   West province, the geographic footprint of the Small Business Start-Up
                                                                                   Fund and its network of Small Business Hubs has changed the lives of
                                                                                   many; directly through funding and indirectly for the beneficiaries and
                                                                                   families of the entrepreneurs.

                                                                                   The Small Business Hubs, staffed and financed by Anglo American’s
                                                                                   businesses, provide entrepreneurs with tangible support, including
                                                                                   assistance with business plans, training and coaching on the essentials
Bakgokathabafi Projects, assisted by the Small Business Start-up Fund and the      of running a business.
Anglo Platinum Atok Small Business Hub, is owned and managed by Selina
Maphanga (pictured front left). The company has an ore loading and haulage
contract with Twickenham Platinum Mine’s Hackney Shaft.                            Unlike the Supply Chain Fund, the Small Business Start-up Fund only
                                                                                   provides loan funding (limited to R1 million per project) and support.
                                                                                   Beneficiary SMEs must operate in Anglo American business unit areas and
                                                                                   must comply with the BEE criteria as per the Mining Charter. However,
Procuring success
                                                                                   they need not be part of the Anglo American supply chain.
The Supply Chain Fund provides hands-on support and guidance
to investees in areas such as corporate governance, legal matters,
                                                                                   International recognition and milestones
safety, health, environment, accounting and public relations. The
                                                                                   The Anglo Zimele model has been adopted by many global and local
Supply Chain Fund assists the Anglo American Group’s procurement
                                                                                   players – including the International Finance Corporation (IFC), a
departments in identifying BEE suppliers and ensures the channelling
                                                                                   member of the World Bank Group; Mondi, De Beers and Barloworld –
of business opportunities to black-empowered SMEs. Anglo Zimele
                                                                                   as it represents a unique approach to providing SMEs with integrated
supports BEE enterprises through equity and loan finance, as well
                                                                                   access to markets, financial support, skills transfer and capacity
as support and skills transfer.
                                                                                   building. The IFC has purported the model as the prescribed best
                                                                                   practice approach for companies around the world, which seek to
Starting small
                                                                                   integrate local SMEs into their supply chains.
Anglo Zimele’s most recent off-shoot, the Small Business Start-Up
Fund, supports entrepreneurs and small businesses in the communities
in which Anglo American operates with seed and working capital                    Contact information
for their emerging enterprises.                                                   Anglo Zimele
                                                                                  Tel: +27 011 638 4172
  The name ‘Zimele’ is derived from the African languages                         Email:
  Zulu and Xhosa and means ‘to be independent’.                                   Website:


Anglo Khula Mining Fund                                                  In addition to the traditional mining-related areas of expertise, the
Launched in 2003, the Anglo Khula Mining Fund is a joint                 financial support extended to investee companies is complemented
initiative between Anglo American and Khula Enterprise                   by hands-on business support and guidance in areas such as broad-
Finance Limited, a government-owned entity that promotes                 based black economic empowerment, corporate governance, safety,
small and medium enterprise development.                                 health, environment, legal, accounting, company secretarial aspects
                                                                         and public relations.
The fund, which focuses on promoting mining-related investments, is
managed by Anglo Zimele, Anglo American’s enterprise development         The fund insists on partnered BEE entrepreneurial skill, day-to-
and investment fund. It is based on an effective and replicable          day involvement by the partner as well as a personal equity
business model that aims to boost the South African mainstream           contribution, as the lack of these has led to the demise of numerous
economy and support the South African government’s initiatives           companies.
by facilitating the entry of emerging black-owned mining operations
with commercially viable prospects.                                      Further to this, the fund has access to world-class technical, engineering
                                                                         and mining expertise within Anglo American’s core businesses.

                                                                         To date, it has 11 investments, which collectively employ 810
                                                                         people and turn over R786 million. The funds invested to date
                                                                         amount to R132 million across a variety of projects.

                                                                         Black Wattle coal reclamation project
                                                                         The Black Wattle coal reclamation project is one of the Anglo Khula
                                                                         Mining Fund’s flagship investments and has shown both sustained

Black Wattle Coal reclamation plant

The barriers typically faced by aspirant miners include ubiquitous
prospecting permits, lack of access to development capital and the
shortage of sound advisors and guidance appropriate to the needs
of emerging mining companies.

As a value-adding relationship investor, the Anglo Khula Mining
Fund assists such mining enterprises with equity and loan finance
at prime interest rates, complemented by technical support during        Black Wattle Dump is reducing the otherwise damaging environmental footprint of
the high-risk exploration and pre-feasibility stages of projects. This   Black Wattle Colliery by reclaiming waste coal and on-selling it for re-use in power
brings them to commercially bankable positions at which point            stations
mining entrepreneurs can approach commercial lending institutions
and raise finance for the commissioning of mining operations.
                                                                         operational and financial performance. The project is managed by
“Without the fund, many black-owned junior companies would not           Zingaro Trade 51 (Pty) Ltd, a black-empowered special purpose joint
be afforded the opportunity to operate in the formal mining sector,”     venture between Eyethu Coal and Geovicon. The operation extracts
says fund manager, Mxolisi Kota.                                         coal from discard dumps at the Black Wattle Colliery in Witbank

while also taking up arising discard material. Such material would
otherwise be discarded as waste, resulting in a larger environmental
footprint for the colliery. The project beneficiates coal, the majority
of which is supplied to Eskom’s Duvha Power Station.

African Nickel
The Bon Accord nickel-sulphide prospect, located approximately
20km north-east of Barberton, Mpumalanga, is one of Anglo
Khula Mining Fund’s more recent investments. The project, owned
by African Nickel Ermelo, a South African subsidiary of African
Nickel Limited, is exploring for nickel-sulphide mineralisation
associated with komatiite rocks of the Onverwacht Suite of the
Barberton Supergroup. Komatiite is a rare and ancient ultramafic lava
named for its proximity to the Komati River. African Nickel identified
Bon Accord as a potential late-stage exploration project during its
review of Anglo American’s nickel database and selected it based on
the extent of reported mineral resources, grade of the mineralisation,
and significant exploration potential for additional resources.
                                                                                        Mxolisi Kota, Anglo Khula Mining Fund manager, Elize Isenschmidt, Anglo Zimele’s
                                                                                        former legal advisor, Pieter Pretorius, plant manager of Mooifontein, Lia Vangelatos,
                                                                                        chief investment manager for Anglo Zimele, and Alfonso Spinelli, a visitor from
                                                                                        Venezuela, on site at Mooifontein’s coal washing plant.

                                                                                        Revisions to the process layout and the addition of a new spiral plant
                                                                                        module have set the foundation for enhanced processing efficiencies.
                                                                                        Furthermore, a full coal laboratory, attached to the Mooifontein
                                                                                        plant, is now fully operational, enabling the facility to produce to its
                                                                                        full potential.

                                                                                        Since Eyethu Coal took ownership of the plant, an average of
                                                                                        50 000 ROM tonnes per month has been washed. Eighty percent of the
                                                                                        final product is sold to the local market with balance allocated to the
                                                                                        export market.

                                                                                        From February 2010, the company plans to ramp up throughput
                                                                                        by washing a minimum of 120 000 ROM tonnes per month. The site
                                                                                        of the Mooifontein plant has also become strategic for the crushing,
                                                                                        screening and pre-qualifying of coal to be supplied to Duhva Power
                                                                                        Station from all of Eyethu Coal’s own reserves. An average of
                                                                                        30 000 tonnes of coal is supplied to Eskom power stations from
                                                                                        this site, and mobile crushing and screening equipment, with a
                                                                                        capacity of 100 000 tonnes per month, has been made available
Structurally deformed underground exposure of oxidised sulphide mineralisation at the   for this purpose by Eyethu Coal.
Bon Accord nickel prospecting project managed by African Nickel Ermelo.

Mooifontein coal washing plant                                                          Contact information
Eyethu Coal, a black-empowered mining company focussing on                              Anglo Khula Mining Fund
coal mining and related business activities in the Mpumalanga
                                                                                        Tel: +27 (0)11 638 3716 / 4172
Province, purchased the Mooifontein coal washing plant from
Umcebo Mining in May 2009. At the time, the plant’s feed capacity                       Fax: +27 (0)11 638 5321
was 75 000 run of mine (ROM) tonnes per month, which has since                          Email:
increased to an impressive 120 000 ROM tonnes.


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