Consulting engineering and project implementation firm Hatch Goba is playing an instrumental role in spearheading enterprise and supplier development (ESD) schemes and programmes within the South African mining sector through its partnership with ESD implementation specialist Medo.

The South African government has given the industry 12 months to prepare for amendments to the broad-based black economic- empowerment (BBBEE) framework. ESD forms a critical component of the new framework and mining companies seeking to retain or improve their black economic-empowerment status are required to make a more meaningful and sustainable contribution to community businesses that are located in the areas in which they operate.

Medo connects large and well-established companies with emerging micro- and small enterprises that are at least 51% black-owned in order to facilitate development and supplier relationships that are in compliance with BBBEE codes of best practice set out by the Department of Trade and Industry (DTI). The Medo ESD programme includes industry supply chain analyses, the identification of suitable and potential suppliers, a ‘boot camp’ as well as industry technical training.
“By partnering with Medo, Hatch Goba will be recognised as an ESD frontrunner, which means going beyond basic compliance, and making a positive contribution towards the establishment of successful enterprise development partners and businesses which can play a technically meaningful role in the mining sector,” says Hatch Goba African coal director Gerrit Lok.

Medo MD Judi Sandrock reveals that the organisation, in turn, has developed a strong relationship with the DTI and its Incubation Support Programme, which was officially launched in 2012 in an effort to create 250 incubators nationwide by the end of 2015.

“In essence, the incubator is an enabling environment for businesses that are already in existence to become profitable and self-sustaining. The incubators will only support businesses that have been evaluated and show potential with the right support and assistance,” she explains.

The Hatch Goba and Medo partnership has taken its ESD initiative one step further. In addition to creating sustainable mining technical businesses, it will also help develop junior, black-owned coal mining companies through a coal incubator in Middleburg.

Lok highlights that the programme is currently supporting 40 small businesses in Middelburg through virtual incubation. In the next few months, the programme will open a physical incubator with funding from Anglo-Australian multinational mining and petro- leum company BHP Billiton, Hatch Goba and the DTI.

“We have various phases that we help the companies with, and within each phase, we will be guiding the junior miners with regard to the skills sets and requirements that they need for that specific phase. We want businesses that are going to blossom, and when they become too large for the incubator, they will be able to stand on their own two feet, thanks to a carefully planned exit strategy,” he points out.

He adds that there is a shortfall of coal supply in South Africa, with numerous juniors unsuccessfully trying to enter the market as a result of not having access to capital to move their projects up the value curve to a level that can be presented for finance. In many cases, the junior miners are not even able to ascertain the viability of a deposit.

Through its coal incubator, Lok points out that Hatch Goba will assist junior mining companies in evaluating their opportunities and determine if they make financial sense. “From a business perspective, Hatch Goba’s ulti- mate intention is to give the prospective junior miners the tools to succeed if they have a prospective asset. Hatch Goba will provide the necessary skills training and assistance at different development phases with regard to skills sets in terms of management and engineering.”

Sandrock mentions that an incubator can only be a success if the entire life cycle of the business is taken into account.