Contractors need to meet mining companies’ business aims

8th November 2013

By: David Oliveira

Creamer Media Staff Writer


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Mining contractors have an important role to play in driving the business aims of mining companies, says professional services firm Deloitte Africa mining advisory leader Abrie Olivier.

He adds that contractors form an intrinsic part of the South African mining landscape, as they employ a large portion of most mine’s labour and are tasked with completing important aspects of a mining project and a mine’s operations.

“From a mining perspective, the business objectives of mining companies have, in recent years, gone beyond profitability. These goals rather involve a company’s social responsibility towards local communities, the role it plays in infrastructure development and its contribution to the overall growth of South Africa’s prosperity,” says Olivier.

He adds that, owing to these changing business targets, mining contractors are playing a bigger role in helping the industry achieve its goals.

Olivier says that mining companies should actively manage and assess contractors to ensure that they meet their key per- formance targets, as stakeholders, govern- ment and the local population will criticise the mining companies and not the contractors, should the targets involving community and social responsibility not be met.

“Also, contractors that embrace the prin-ciples of social responsibility and community development will likely receive preferential status from mining companies during the procurement process. “Deloitte has noticed that mining com-panies are prepared to pay a premium for contractors that comply with their social responsibility objectives.

“Mining companies recognise that con-tractors have a role to play in helping them attain social responsibility goals, and they are looking for contractors that ascribe to the same business systems and ethics,” he explains.

Deloitte mining solutions consulting lead Jan-Adriaan du Plessis says that mining contractors that do not pursue these objec-tives will need to change their strategy, as the Department of Mineral Resources (DMR) is driving an aggressive campaign to promote these objectives. “This will force mining companies and their contractors to align themselves in terms of all the measurements and expectations from government and local communities,” he adds.

Du Plessis concedes that it will be chal-lenging to manage these expectations on a monthly basis, as large mining companies employ several contractors for mining oper-ations, each with its own key performance objectives and expectations. “Although contractors’ key performance objectives and expectations are stipulated in the contracts, these stipulations are not actively managed,” he comments, further noting that this is often an issue for mining companies.

Edited by Samantha Herbst
Creamer Media Deputy Editor


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