A recent report by Statistics South Africa noted that mining production had increased by 6.5% year-on-year, up from the annual growth of 5.2% reported in October 2017. This bodes well for Black Royalty Minerals (BRM), a subsidiary of the Makole Group, which launched its first colliery in Bronkhorstspruit, a small-town east of Pretoria characterised by typical socio-economic issues faced by many poor communities in South Africa.
Chilwavhusiku Colliery is the first mining operation project owned by Black Royalty Minerals and is also the first colliery in the town. It became fully operational in the last quarter of 2017 and has contracted Stefanutti Stocks as mining contractor. The mine supplies coal to primarily inland customers and is currently working on export contracts.
“As a business that is 100% black-owned, we are proud to be contributing to the GDP of the country but we’re very gratified to impact the lives of the Bronkhorstspruit community though job creation and local business development,” says Ndavhe Mareda, Chairman of Makole Group.
BRM’s development plans for the Bronkhorstspruit community include ensuring that over 80% of its colliery workforce are sourced from surrounding communities; investing in promising young students by offering them tertiary education bursaries; and outsourcing to and collaborating with local business in advancing the economic circumstances of the community. Employing this strategy allows BRM to make further contribution to the community of Bronkhorstspruit by employing community members which addresses joblessness and the social problems that are caused by unemployment.
“While community development is a priority, equally important is our business strategy, which combines future mining acquisitions within the next 12 to 24 months and exploring export opportunities. These will allow us to diversify risk and increase earning potential,” adds Mareda.
Mareda has also identified significant potential for junior miners. He says while junior mining in South Africa is still in early stages compared to its first world counterparts and is heavily impacted by several factors such as access to capital and regulatory policy, he believes that the Mineral and Petroleum Resources Development Act (MPRDA) Amendment Bill will position the junior sector for growth and development by easing requirements for small mining companies, creating more opportunities and alleviating the historical bottlenecking of this industry.
As with most junior miners, BRM has been faced with several regulatory challenges. These have pushed BRM and Makole to think laterally by being entrepreneurially creative in combining their aspirations in the mining sector with group capabilities to grow the bottom line and safeguard the business for continued sustainability.
Public sector support is equally imperative as regulatory support and legislators are better positioned to understand the challenges faced by junior minors. Lessening the challenges faced by junior miners and by being more representative of their interests would be beneficial in the greater interest of sectoral and economic development.
“While public sector support is crucial to the development of junior minors, we cannot ignore that we need to be constantly innovative. From a Makole perspective, our approach is two-pronged – maintaining and growing our South African operations, integral to which is diversifying our mineral resources assets and revenue streams such as export opportunities so that volatility and macro-economic risks to the growth of the mining business is minimised,” concluded Mareda.
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