"We aim to position South Africa's mining capital goods, components and product manufacturers as a cost-competitive, innovative, and transformative industrial cluster."

Lehlohonolo Amos Molloyi

CEO, MINING EQUIPMENT MANUFACTURERS OF SOUTH AFRICA (MEMSA)

July 26, 2021

What is the mission of MEMSA in South Africa?

MEMSA was established in 2016 as an industry cluster organization, advocating for and promoting the interests of its members and the mining equipment manufacturing industry in South Africa. We aim to position South Africa's mining capital goods, components and product manufacturers as a cost-competitive, innovative, and transformative industrial cluster. A company is eligible to apply for membership if it is a registered, tax-paying entity that manufactures mining-related products, components and equipment; and it must be at least 26% South African owned. Our members have committed to reaching B-BBEE Level 4, and 26% black ownership. Our membership base has grown significantly since our establishment, and today we have 36 members, of which 80% have black ownership.

We continue our advocacy and are continuously in discussion with government and relevant stakeholders to advance our purpose. Through our relationship with government, we are discussing and monitoring the impact of legislation on equipment manufacturers and highlighting ways in which the South African mining equipment industry can best be supported by legislation and policies to reach its potential for growth and job creation. In our efforts to promote local content, we are working hard towards the displacement of imported mining capital equipment as well as local development of technology and IP to support improvement, localization and transformation in the supply chains of local OEMs.

Can you give an overview of MEMSA members' experience with the pandemic and how the organization helped them to mitigate the risks?  

The impact of Covid has been quite drastic on the mining industry. Fortunately, the government declared certain operations as essential and critical activities could continue with strict protocols. Many mines could, however, only operate at 50%, which had a great impact in terms of a supply and services perspective. Employees could claim from the Unemployment Insurance Fund (UIF), which provided relief.  As MEMSA, we assisted members in staying on top of the regulations, requirements and essential contacts, and hosted workshops where members shared tips on coping with the new environment we so suddenly found ourselves in. We arranged sessions where the IDC presented their distressed business and specialised funding instruments, and we used our website to keep members up to date on other funding opportunities, such as for small businesses. 

In what ways does the mining charter support local manufacturers?

The mining charter puts in place a target of 70% of total mining goods procurement spend on South African-manufactured goods, with a minimum of 60% local content. Mines are required to achieve compliance through a combination of scores for procurement of goods and services, employment equity and human resource development. The South African mining industry's supply chain needs to be upgraded to track local and imported purchases. Therefore, the DTIC, with the assistance of the IDC, is developing a Standardized Coding and Product Identification System that can identify products using a unique name and code. Such a system will greatly improve the efficiency of the whole mining supply chain, with significant cost savings for mines. The system will make it easy for companies to tell just how much of a procured item is local content, and where it was manufactured.

How would you describe the skill pool and labour availability in South Africa?

Progress has been made in education and preparing ourselves for the digital mining revolution. WITS University as an example has DigiMine, the University of Pretoria has virtual reality and 3D labs, and the University of Johannesburg has a mock mine. These are state-of-the-art mining laboratories and facilities for developing and testing digital technologies to make mining safer and sustainable, and preparing students for the real world of mining as well as cutting edge RDI.

Skills development at various levels is essential to the long-term sustainability and success of the industry. In collaboration with merSETA, we embarked on a project where we asked for proposals from the industry about what specific skills will be needed in the mining and manufacturing space in the future. We believe that these reports will give us a good indication of how we can further prepare ourselves for developing skills for the mining industry.

What are the biggest challenges facing local manufacturers in South Africa? 

There are concerns regarding access to capital as there is a perception that government does not sufficiently support local manufacturers. This issue has been raised on numerous occasions by our members. Through the strong relationships we have built with the DTIC and the IDC, MEMSA is looking at ways to assist our members in fast-tracking funding processes, which can be lengthy and time-consuming.

How would you characterize the overall health of the South African mining industry?

The SA mining industry has a lot to offer, as a leading producer of chrome, manganese, platinum, vanadium and gold. The country is also a prominent player in the PGM space and copper, which are critical as they are witnessing significant growth due to decarbonization efforts. MEMSA is of the opinion that it is the responsibility of both government and industry to hold hands and take on challenges collectively.

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