To bridge the information gap between local businesses and the copper mines operating in Zambia, the Zambian Association of Manufacturers (ZAM) will launch a new Web-based facility – Zamb2b.com – at the Copperbelt Mining Trade Expo and Conference (CBM-TEC), in Kitwe, next month.

This initiative forms part of an ongoing focus by African policymakers on the role of the extractives industries in promoting broader-based economic development and a subsequent bid to develop upstream linkages to promote local industrialisation.

Complete pipeline solutions provider Rare Group pipeline services manager Carl Von Graszouw explains that Zambia’s copper mining industry relies on a large imported component of supplied goods, but that spending on this has decreased drastically, owing to a downturn in commodities prices and the overall economic growth reduction in the mining sector in the past 12 months.

The ability to localise procurement has significant cost management benefits for mines operating in Zambia, as it shortens the supply chain and, thus, along with the strengthening of the US dollar, has resulted in companies placing greater emphasis on furthering this agenda, notes mining solutions manufacturer Joy Global business development manager for Africa Marc de Chalain.

Von Graszouw claims that growing the manufacturing industry in Zambia is crucial for stimulating an increase in the use of local suppliers. However, he points out that there are many challenges facing local businesses, such as Zambia’s currency depreciation over the past year, the increase in unemployment because of mining-sector layoffs and an unstable power supply, as a result of the low water levels at the Kariba dam affecting the generation of hydroelectricity.

A report on regional industrialisation and integration by University of Johannesburg Centre for Competition, Regulation and Economic Development senior associate Judith Fessehaie, which was prepared for the Tips Annual Forum in July 2015, supports this view. The report indicates that, in the Southern Africa region, “regional value chains offer the opportunity to develop complementary industrial capabilities, promote technology and skills transfer, and create integrated markets that provide economies of necessary scale and the scope required for a thriving manufacturing sector”.

Von Graszouw suggests that the best way local suppliers can boost their presence in the mining supply chains is by ensuring that they are supported by high-quality logistics and “world-class” manufacturers and importers. Indeed, a key finding of Fessehaie’s report is that linkages between South African and Zambian mining inputs clusters should be intensified and extended to the Copperbelt mining market in the Democratic Republic of Congo. She claims that South African original-equipment manufacturers (OEMs) support their subsidiaries in multiple ways, such as through backup services, training of local staff, joint marketing and access to credit lines. Local Zambian suppliers, however, are facing infrastructural and regulatory barriers, which raise inefficiencies in this type of collaboration.

He predicts that international companies will be open to using local suppliers, as long as the best-quality goods and services can be ensured. Mining products manufacturer and supplier Osborn Engineered Products sales director Noel Bessler similarly notes that, while the company’s products are manufactured outside Zambia, after-sales repairs and spares could be sourced locally if Zambian suppliers could meet quality specifications. He maintains that ongoing training is imperative in enhancing the presence of local small and medium-sized enterprises in the Zambian copper mining supply chain.

De Chalain adds that a key driver in facilitating the increased integration of local businesses into the copper mining industry would be legislation that supports and promotes local sourcing and supply, but that, “more importantly, reflects the consistency and stability that organisations can plan and grow around”. Von Graszouw further suggests that the Zambian government could support local businesses by making funding available to assist with start-up costs.

ZAM CEO Maybin Nsupila will host a workshop aimed specifically at Zambian suppliers and mining purchasing managers at the CBM-TEC event, which runs from May 12 to 13. Nsupila explains that there are many companies whose products do not yet meet the quality standards required by a recognised authority and that ZAM “needs to do a little more to help them get” to that level.

The workshop will showcase some success stories and provide an outline of the interventions being put in place by the association in the medium and long term to try to increase the volumes of locally manufactured goods that are used by mines in Zambia.

Nsupila praises the CBM-TEC as “a huge opportunity for local producers”, claiming that the event “[increases] the potential for mining companies to contribute to much more sustainable employment creation through backwards linkages”.