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The drive to increase local procurement in the Mining Sector in Africa: Myth or reality?

Year: 2011
Author: Hanlin, Chris
ISBN: 978-1-77011-235-3
Abstract:

MMCP Discussion Paper No. 4

There is a continued perception that Africa has not benefited proportionally from the exploitation of its natural resources and that this is perpetuated by the current endemic approach to the development of commercial mining operations. This approach has a direct and continued impact on procurement throughout the life cycle of a mine and serves to, by default, limit the percentage of the procurement potential that is available for exploitation by the local economy.  Despite the obvious potential that such commercial developments could afford for local revenue generation and capacity building, relatively little is actually realised. Across the continent local suppliers are seldom used and an indigenous service and supply sector for the mining industry has not developed to any significant extent outside of Ghana and South Africa. Furthermore, despite the advanced capacity of the South African mining service sector and continued evidence of world leading innovation in this sector South Africa does not appear to be benefitting proportionally from the activities taking place on the African continent. The multi-national nature of the corporations currently engaged in exploration and mining activities in Africa and the endemic systems that exist within these corporations that pre-determine the procurement route, from the design phase right through to the operational phase of the mine life cycle, effectively exclude the participation of the South African mining service sector from engaging in a significant percentage of the procurement process.


Publication file: MMCP Paper 4.pdf
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