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February 2008
The power crisis and the resultant job loss. The all women construction company awarded a tender by Lonmin and how Lonmin is empowering the community. Also what TEBA is doing in assisting disadvantaged schools

With Eskom now allocating an average of 75% of the mining sector’s normal electricity supply, South African coal mines are close to resuming normal mining activities, while mines in other sectors are producing at a slower pace and other mines continue to deal with suspended operations.

This follows a countrywide power crisis that led Eskom to instruct South African mines to cease operations on January 25 2008, stating that it could not guarantee power supply to support their operations.

A letter signed by Eskom CEO Jacob Maroga instructed mines to evacuate all underground staff and suspend all surface and underground mining. Only essential services, such as pumping, ventilation and lighting, were allowed to continue operating.

On January 26, the minister of Minerals and Energy, Buyelwa Sonjica, and Public Enterprises minister, Alec Erwin, convened a high-level meeting in Pretoria with the mining industry, Eskom and organized labour to discuss electricity supply to the industry and to examine more immediate measures to reactivate the mines that had closed following Eskom’s instructions.

Part of the agreement reached at this meeting was the establishment of a joint mining industry and government task team charged with the responsibility of looking at ways to rebuild the supply of power to the industry in a stable way. The task team met for the first time the next day to consider ways in which Eskom and the mining industry could collaborate to reduce electricity demand by 10%.

Shortly afterwards, Eskom agreed to supply sufficient energy from the evening of January 27 to enable mines to perform safely-related maintenance work.

Mark Cutifani, AngloGold Ashanti’s CEO, said in a statement: “I think that we are stating to emerge from a crisis that had the potential to undermine the viability of the South African gold industry.”

Chamber of Mines CEO Mzolisi Diliza has said the industry consumed about 15.2% of Eskom’s energy.


Job loss fears

With production losses soaring into hundreds of millions of rand, there is widespread concern about job losses if the crisis continues, particularly in the light of Eskom’s statement that the power crisis was likely to be fully resolved before 2013.

One analyst estimates that the mining industry has been losing about R330-million in revenue a day as a result of suspended operations, fuelling fears that retrenchment might follow. Other analysts fear the previously thriving economy could slow down and say the government ignored warning to build new power plants as far back as 10 years ago from experts.

Cosatu (The Congress of South African Trade Unions) has expressed its concern that workers might have to suffer the consequences of a crisis that was not the responsibility of workers themselves.

Cosatu spokesman Patrick Craven has been quoted as saying that responsibility should lie with government which failed to heed warnings.

“It should now make money available to maintain power for the future and to save thousands of jobs,” he said.

Meanwhile the NUM (National Union of Mineworkers) has criticized Eskom’s “poor” communication on power cuts, saying the mining industry could not afford such outages with no prior notice.

“The mining industry cannot afford random shedding as that endangers the lives of ordinary workers and threatens their very survival,” said Frans Baleni, general secretary of NUM. 



Mmatsie Grace Kgomangwe is one of the 10 women who make up Little Rock 298, a cc that was awarded a tender by Lonmin to convert 153 hostel rooms into family units. This project in the North West province is valued at R22.5-million.

Project co-ordinator and manager responsible, Kgomangwe, says they were overwhelmed when they were awarded the tender. “I remember when we went for the site inspection. There were more than 200 people, or companies, that attended. We were not sure if we would be successful, but we decided everyone has an equal chance so we took our chance.”
Today the project is almost 43% completed. The deadline for completion is the end of March 2008 and the Little Rock women are confident they will meet this deadline on budget.

Previously Little Rock provided a variety of services, such as clearing and cleaning for the mines in the area. “We traded informally until 2003 when we formed and registered Little Rock cc. Our motivation was that we situated in a mining area and wanted to provide services to these mines. However, we found that we were receiving more and more construction oriented work – such as paving. So we began to tender for more and more work of this nature.”

Before winning the tender for the conversion of hostels into family units, Little Rock had been involved in a smaller project to the value of around R500 000.

The company has 10 members of which five are in executive positions in the company and actively working on site, they include Thelma Botolo – executive chairperson, Elizabeth Simango – first aid officer, Lucia Ramotho – co-ordination of site work, and Caroline Moerane and Rachel Rambao, both safety representatives.    

Little Rock is 100% women owned. All the women are based in or come from Segwaelane, which is a village on the far side of Wonderkop village in the North West Province.

The awarding of the contract was made on condition that technical support had to be acquired. Tusk construction Support Services was selected to assist them with the execution of this contract. Tusk assists small and medium contractors or developers to overcome limited administrative capacity and contract management experiences and resources and limited access to finance.


Lonmin Empowers Communities
Lonmin has, together with the international Finance Corporation (IFC), developed a unique community upliftment programme, the Lentswe process, for the areas where its operations impact socially, environmentally and economically on the communities.

Tswana for “voice”, the Lentswe process, is Lonmin’s common vision inspired by the community and Lonmin management.

“The Lentswe Charter articulates the vision, mission and values that will guide development in the community to the year 2040. It focuses on sustainability, learnership, co-operation and ownership.”

This is according to Phillip du Plessis, Lonmin supplier development consultant, who goes on to say, “To meet our black economic empowerment procurement and community development targets at Marikana, we have partnered with the IFC to create a comprehensive local supplier development strategy.”

Key to this programme was the identification of the conversion of hostels into family units. Lonmin selected three women owned companies to execute three hostels conversion projects. Of the three, two companies were identified as requiring major assistances, Little Rock Trading and Sinopa Construction & Property.

Little Rock needed assistance managing a major project entailing the conversion of a hostel into 153 family units.

As a result Lonmin brought on board Tusk Construction Support Services and Nurcha. Tusk provides construction support to the cosmogonies while Nurcha provides financial support.

“With Nurcha and Tusk as facilitators, the companies have been exposed to construction methodology as well as life and business kills. In this way the local community is empowered,” explains Du Plessis.

Tusk has also appointed a permanent contract manager on-site to oversee the project on a daily basis. His Task is to assist the companies with all aspects of the project, from procurement to actual building and quality control.

Phase one of the hostel conversion project is nearing completion, with Lonmin about to embark phase two.


Teba Development’s objective in assisting disadvantaged schools in rural areas is to develop a sound base for education.

With many schools in the area built out of sticks and mud, the assistance of Teba Development is mainly in the form of infrastructure. This entails the building of new classrooms, erecting toilets and providing water services, mainly through boreholes.

While old classrooms are renovated where possible, most of the project has seen the building of new structures. The classrooms are built using concrete, which replaces the sticks and mud and provides a safer learning environment for the children.

According to Mr. Mgelo, Lima extension officer for Lisikisiki, each school consists of three classrooms and costs R900 000 to build. “Teba Development uses local contractors to build new classes, as well as erect toilets and provide water services.”

Water is provided to the children by sinking a borehole. A hand pump is then fitted to the borehole. Rain tanks are also used to collect water. All the water sources are connected to a tap for the children.

The third leg of project is to implement a sanitation system for the school. Instead of a conventional pit latrine, an ECOSAN toilet system (urine diversion system) is used.

Schools are also assisted to start and sustain food gardens. These are watered using the implemented water sources and the waste from the toilets is also used for school gardening. Schools are assisted in refurbishing their old furniture. Some schools have also received computers.

A school built in the second half of 2007 is the Magwa Senior Primary School in the Eastern Cape. The school building was funded by Harmony Development Fund, which also funded the building of the Khanyisa Senior Primary School (to grade 6).

Together with the Harmony Development Fund, the Gold Fields Foundation and Samancor are the main contributors towards the school programme.

The schools assistance programme has been very successful, not only in the Eastern Cape, but also in other traditional areas and countries have provided labour to the mining industry. Already in 2006 more than 200 schools in the Eastern Cape asked for assistance from the programme.

“The school governing bodies and the Department of Education signed memorandums of understanding with Teba Development that states that they can provide teachers for the school and that the project will be sustained by them,” says Mr. Mgelo.

Teba Development is a not-for-profit (Section 21 Company), non-governmental organisation whose purpose is to play a leading role in a collective endeavour to improve living conditions and livelihoods of communities that have provided labour to the mining industry for decades.


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