SPECIAL FEATURES: Amdec Group & IPC Coal
August 2015
www.africanbusinessreview.co.za
Special Report
ELEWANA COLLECTION Lodges, Camps, Boutique Beach Hotels All In Harmony With Africa
SOERA:
Managing Sustainable Growth Across Africa
AFRICA:
The Connected Continent?
TOP 10
Sub Saharan African Economies
EDITOR’S COMMENT
Increasingly Diverse Growth H E L L O A N D A V E R Y warm welcome to the
August Issue of African Business Review. This month’s Company Reports and Front of Book features reflect the truly diverse level of growth that the continent is currently experiencing: long may it continue! This month’s cover features an interesting report covering the success story of Elewana; a pioneering premier eco-tourism company offering breath-taking, low-impact holiday destinations across Tanzania and Kenya. Another engaging read is our report on Alphamin Resources, a tin mining and development company operating in the Democratic Republic of Congo which is set to produce some of the purest-grade tin in the world. Our final report covers the exploits of Southern Engineering Company, a company that has a wide portfolio of both marine and onshore operations; it has gained world renown after providing accommodation units for Kenya’s Lake Turkana Wind Project. This month’s Front of Book articles are just as diverse as the Company Reports, featuring the latest tool aimed at helping African governments plan for rapid urban development: the State of the Environment Rapid Assessment Tool. We also take a look at the barriers and opportunities facing internet connectivity across the continent. Our Top 10 this month explores the continent’s most competitive economies.
Enjoy the issue! Nye Longman Editor Nye.Longman@wdmgroup.com 3
CONTENTS
Features TECHNOLOGY
AFRICA ONLINE: Barriers And Opportunities
6 LEADERSHIP
The Future Of Sustainable Urban Growth Across Africa’s Expanding Cities 4
August 2015
12
TOP10
18
Competitive Sub Saharan African Economies
28
Elewana Group Amdec Group
38
Southern Engineering Company
50 Company Profiles RETAIL 28 Elewana Group
CONSTRUCTION
irports Council International, A Africa Region (ACI Africa)
38 Amdec Group
SUPPLY CHAIN 50 Southern Engineering Company 58 Airports Council International, Africa Region (ACI Africa)
58 64 IPC Coal
76
Palabora Copper
MINING 64 IPC Coal 76 Palabora Copper
5
LEADERSHIP
The Future Of Sust Growth Across Afric Ramboll’s ‘State of the Environment Rapid Assessment’ tool gives governments and institutions a framework for understanding and acting on the fallout from mass urbanisation Writ ten by: S t epan Ruzicka, Dir e c t or o f Envir onm ent , and K ar en Nash, S enior Envir onm ent al C onsult ant , Ramboll Envir on Edited by: N ye L ongman
6
August 2015
tainable Urban ca’s Expanding Cities IT IS WELL known that both businesses and governments in Africa are facing an increasing challenge from rapid inward urban migration, and the associated pressures of urban planning and infrastructure provision. With more than a quarter of the 100 fastest-growing cities in the world, the continent’s urban population is projected to have
increased from 400 million to 1.2 billion by 2050. As cities grow rapidly, they are increasingly vulnerable to urban violence, natural disasters, climate change and poverty. This often leads to significant environmental and social degradation. Consequently, in the face of administrative, technical and financial resource scarcity, there is urgent need for practical and 7
LEADERSHIP cost-effective pathways to guide sustainable urban development. SoERA Development To aid this Ramboll has developed ‘State of the Environment Rapid Assessment’ (SoERA), a planning and management tool designed for use across developing urban settings. It meets the challenge of obtaining a coherent and valid understanding of the priority urban environmental and social issues, in a cost-effective and practical way. This understanding is the key prerequisite for future policy and decision-making for safe, resilient and sustainable cities. The SoERA tool has already been tested on a large scale case study, and was developed as part of management planning for a rapidly expanding city of 5 million inhabitants in the Middle East and North African (MENA) region between July 2012 and January 2014. While significant investments of time and effort in data collection had previously been made, the benefits in terms of positive urban development outcomes were unsatisfactory. To remedy this the SoERA focussed on collating and making sense of existing and new baseline information on the 8
August 2015
status, trends and interactions of the human and natural environment. The result was a comprehensive overview of the existing conditions and their dynamics, which then provided a clear and auditable basis for effective and efficient management planning. SoERA Approach The SoERA process takes an existing framework (State of the Environment Reporting) and adapts it into an integrated rapid assessment (12-24 months) and communication tool. A 5-step approach combines existing data,
With more than a quarter of the 100 fastest growing cities in the world, the continent’s urban population is projected to increase from 400 million to 1.2 billion by 2050
T H E F U T U R E O F S U S TA I N A B L E U R B A N G R O W T H
Co-author, Stepan Ruzicka, Director of Environment, Ramboll Environ gap analysis and targeted baseline studies with expert and stakeholder knowledge, causal pathways and scorecard reporting. Importantly, by drawing on expert consensus and stakeholder knowledge, SoERA is effective even without a full set of environmental and social baseline data. The SoERA Report then feeds into both the strategic and project levels of infrastructure planning, and the wider aspects of decision-making for sustainable management of the human and natural urban environment.
SoERA Application The SoERA process sits comfortably within a single political cycle of many administrations and can be used effectively at national, regional or local levels. It can transform uncoordinated sectoral data into a coherent and meaningful picture of both status and trends. As such, it provides a robust and auditable platform for future policy and decision-making on a local or regional scale. The authorities also gain a communication support tool enabling them to 9
LEADERSHIP
It is well known that both businesses and governments in Africa are facing an increasing challenge from rapid inward urban migration engage with their communities on complex environmental and social issues with clarity and confidence. Most importantly, SoERA can be adapted for use across a range of economic, political, social and environmental contexts: it is sensitive to a country’s own development trajectory and avoids the assumption that cities should all be progressing 10
August 2015
towards the example set by the predominant Northern paradigm. Solutions developed in the context of abundant and accessible energy supplies often fail to translate to the developing country context and fail to deliver societal benefits or to improve urban sustainability. SoERA can be used to support local and national policy and strategic directions that
T H E F U T U R E O F S U S TA I N A B L E U R B A N G R O W T H
incorporate long-term sustainability, and that have the potential to deliver better outcomes than the imported urban models have done so far. SoERA provides a systemwide understanding of the urban environmental and social interrelationships, cutting through sectoral and administrative constraints to inform policy decisions and management actions. It stimulates improved environmental and social reporting, monitoring of environmental
The SoERA process sits comfortably within a single political cycle of many administrations and can be used effectively at national, regional or levels
and social conditions, and coherent environmental and social management. Being collaborative and integrative, SoERA also has the potential to be an important catalyst for development in areas of education, legislative and institutional strengthening, capacity building, land use planning and the use of locally-appropriate solutions SoERA was established in a practical developing urban context with the aim of being flexible, transferable and adaptable to a variety of technical, economic and political conditions. As well as establishing the baseline for informed urban investment decisions it also provides support to policymaking, institutional development and capacity building, together with benefits to environmental and social awareness and education. Refinements to the data-gathering systems can be targeted to inform future decisions as part of the ongoing management and reporting cycle. Ultimately, SoERA provides the foundations for reliable, efficient and progressive environmental planning, and sustainable long-term management of urban systems. 11
TECHNOLOGY
AFRICA ONLINE:
Barriers And Opportunities Internet access is growing in Africa and in the face of daunting challenges organisations are beginning to realise this trend Written by: Nye Longman
13
TECHNOLOGY OVER THE PAST decade, internet growth across Africa has in many ways echoed macroeconomic growth on the continent: high percentages, coupled with patchy, often unequal distribution and access. This is only part of the story, however, as an array of companies from around the world are beginning to make serious investments. As with economic size and sophistication, internet penetration varies substantially across the continent, for instance (according to internetworldstats.com) Somalia has an internet penetration
14
August 2015
of just 1.6 percent, whereas South Africa’s figure is 51.5 percent. Barriers to internet adoption Global management consultancy company McKinsey identified four barriers that the offline population in Africa faces, which includes incentives, affordability, user capability, and infrastructure. Its exploration of these barriers is key to understanding the challenges (and opportunities) facing Africa’s offline population. Exploring these in more detail not only reveals the extent of the problem, but also the opportunity for innovative solutions for both businesses and individuals.
AFRICA ONLINE: BARRIERS AND OPPORTUNITIES
Lack of supporting infrastructure is the most striking barrier to internet access on the continent; over 60 percent of the continent’s population lives in rural areas and, in the case of Burundi, that figure is over 80 percent; this inevitably makes access in these areas incredibly costly or, even worse, absent. The incentive to access and use the internet faces challenges, although this is a trend that is changing. The reasons behind the lack of incentives to access the internet are culturally rooted. Many Africans simply are not aware of the life-changing potential offered by internet access because its existence simply has not penetrated everyday life Broadband affordability across the continent has fallen in recent years as fibre cables are rolled out; a study by the Oxford Internet Institute has shown that the average cost of broadband on the continent has decreased from $300 per month in 2008, to just under $150 in 2011. While this is significant progress, the report made bare the situation, it said: “The most striking drop in broadband cost has been observed in Burkina Faso, which has gone from over $1,700 a month
‘A study by the Oxford Internet Institute has shown the average cost of broadband on the continent has decreased from $300 per month in 2008, to just under $150 in 2011’ to a most reasonable $55 (which still, however, represents 100% of the salary of an average worker).” User capability, although an issue that can sometimes be quickly addressed, still remains a significant barrier to internet access. Primarily, this comes down to literacy, both in using computers, and being equipped with those basic literacy and numeracy skills required to read, write and complete basic arithmetic. Changing times While these barriers remain daunting for some, a variety of international players have seen the potential for increased internet growth (and the host of industries that this will lift up with it) and have started 15
TECHNOLOGY
‘As internet access continues to grow in the continent’s strongest economies, the opportunities for less developed nations have the potential to rise with them’
16
August 2015
AFRICA ONLINE: BARRIERS AND OPPORTUNITIES
to make strategic inroads. Last year, Facebook announced that it would be delivering basic internet access for free to millions of Africans in the form of its mobile app internet.org; this offers users free access to the social media network, alongside a host of helpful apps including Wikipedia, Google Search, and AccuWeather. So far, the app is available to android phones and has recently been rolled out in Kenya, Tanzania and Zambia. Facebook will initially focus on sub-Saharan countries including Nigeria and South Africa, offering service support for Senegal, Ivory Coast, Ghana, Rwanda, Uganda, Mozambique and Ethiopia. In June of this year, Facebook was shrewd enough to notice that Africa’s internet growth can be harnessed to make a profit with the opening of its first office in Sub-Saharan Africa in Johannesburg. The 25 people staffing the facility will focus on building the company’s advertising base and will seek to develop the business across the region. While Africa may well have the most complicated, problematic and long-standing barriers to internet access, both public and private sector players have stepped up
Heading up Facebook’s operations in sub-sharan Africa is Nunu Ntshingila-Njeke and have begun to fill these gaps. As internet access continues to grow in the continent’s strongest economies, the opportunities for less developed nations have the potential to rise with them. The challenges lying ahead to internet access are not solely restricted to this domain; they are a particular manifestation of large-scale economic problems. 17
TOP 10
THE TOP10
COMPETITIVE
SUB SAHARAN
AFRICAN ECONOMIES
The World Economic Forum (WEF) has released a report ranking 144 of the world’s most competitive countries W r i t t e n b y: N Y E LO N G M A N
The WEF notes that, despite many countries recovering from the 2008 financial crisis, issues such as income inequality and strained relations remain problematic. Its rankings are calculated according to scores across 11 pillars, which include infrastructure, institutions, macroeconomic development and financial market development, amongst many others
19
TOP 10
10
LESOTHO (Global Rank 107) GDP: $2.3 billion (2010) GDP per capita: $1194.20 (2010)
The small Southern African nation of Lesotho is completely surrounded by South Africa and their economies are heavily integrated; Lesotho’s economy is based mainly on agriculture, livestock, manufacturing and mining.
09 20
August 2015
GABON (Global Rank 106) GDP: $22.54 billion (2010) GDP per capita: $14,600 (2010)
Gabon’s economy has been largely based around oil since the 1970’s when it was first discovered, although the country still retains strong timber and manganese mining capabilities which were the backbone of its economy before oil.
MOST COMPETITIVE SUB SAHARAN AFRICAN ECONOMIES
ZAMBIA (Global Rank 96) GDP: $24.36 billion (2012) GDP per capita: $1,700 (2012)
Zambia’s economy has been based around copper mining for much of the country’s history; it was this sector that established the country as one of the most urbanised sub-Saharan African nations. The country also has a modest yet significant agricultural sector that has recently branched out into palm oil, supplementing expanding beef and poultry sectors.
08
21
TOP 10
07
SEYCHELLES (Global Rank 94) GDP: $2.304 billion (2014) GDP per capita: $15,673 (2014)
The Seychelles has a diversified economy spanning fishing, tourism, oil and gas, and financial services, amongst others. In recent decades the private sector has had sufficient room to grow and take on more responsibilities. It recently became recognised as an Offshore Financial Centre (OFC) which has contributed to its international reputation for financial services.
22
August 2015
MOST COMPETITIVE SUB SAHARAN AFRICAN ECONOMIES
KENYA (Global Rank 90) GDP: $69.977 billion (2015) GDP per capita: $1,587 (2015)
05
Kenya’s economy is well known for embracing liberalisation and implementing market-based principles; its policies to this end have gained it a reputation for being one of the most investment-friendly countries on the continent. Alongside relatively well-developed infrastructure, the country has a diversified economy, covering agriculture, energy, tourism and financial services.
06
NAMIBIA (Global Rank 88) GDP: $17.79 billion (2013) GDP per capita: $8,200 (2013)
Namibia’s economy has undergone a number of initiatives to make itself more competitive to foreign investors; the passing of the Foreign Investment Act in 1990 assured outside investors that their capital would be safe from nationalisations. Its economy centres around mining (especially diamonds) but agriculture, tourism and manufacturing also contribute. 23
TOP 10
BOTSWANA (Global Rank 74) GDP: $15.53 billion (2013) GDP per capita: $16,400 (PPP, 2013)
Botswana is notable for consistently showing the highest growth in the world (averaging at around 9 percent annually). Transparency International also rated the country as the least corrupt in the whole continent. Furthermore, most international credit agencies have given the country ratings comparable to those of Europe and America.
03 RWANDA (Global Rank 64) GDP: $6.3 billion (2011) GDP per capita: $644 (2012)
04 24
August 2015
Rwanda has faced civil war and genocide in its recent history; these factors have obviously hit the country’s ability to grow, not to mention its attractiveness to investors. However the country has come on leaps and bounds since then and is well on the road to restoring its main revenue streams, including mining, coffee, tea, and a modestly growing tourism trade.
MOST COMPETITIVE SUB SAHARAN AFRICAN ECONOMIES
SOUTH AFRICA (Global Rank 56) GDP: $350.6 billion GDP per capita: $6,618
South Africa is the second largest economy on the continent and by far one of the most sophisticated and diversified. It has a large mining sector, in addition to agriculture and manufacturing. Compared to other African nations, South Africa has well developed infrastructure, human capital and institutions. Furthermore, the country has a strong consumer market, alongside established insurance and financial services sectors.
02
25
TOP 10
01
26
August 2015
MOST COMPETITIVE SUB SAHARAN AFRICAN ECONOMIES
MAURITIUS (Global Rank 39) GDP: $6.3 billion (2011) GDP per capita: $644 (2012)
Mauritius has undergone a transformation in recent decades, continually implementing a range of economic liberalisation and diversification measures. Since then, it has become renowned for its strong financial services and widespread participation of the private sector across much of its industries. Although attracting a lot of offshore capital and maintaining an international roster of financial services clients, the majority of investment in the country itself comes from citizens. Alongside finance, the island has developed textiles, manufacturing and tourism sectors.
27
ELEWANA COLLECTION High Value And Low Impact In East Africa If entrepreneurship could be defined as seeing opportunities then seizing them and growing a business, Elewana has to be a prime example Written by: John O’Hanlon Produced by: Kiron Chavda
29
E L E WA N A G R O U P
The view from Elsas Kopje Meru
E
Breakfast in the coffee fields at Arusha Coffee Lodge 30
August 2015
lewana was founded by Karim Wissanji in 2004, but it’s worth looking back at the entrepreneur’s roots in East Africa; it would make a good film! Wissanji’s father Murji, a successful businessman in the Democratic Republic of Congo where Karim was born, was forced to flee the country after the expulsion of Asian citizens that followed independence in 1960. Arriving as refugees in Kenya with only the clothes on their back, the 14 members of the family made their home in a two-bedroom apartment But within a year Mr Murji had managed to acquire a few acres to farm, just on the edge of the Amboseli National Park where he built a traditional mud covered cottage. As a boy, Karim recalls: “He would pick me from school and we would spend the weekend there together.”
R E TA I L
As the farm grew, though, Mr. Murji added a few more cottages for guests. As time went on he realised his property had graduated from a shamba to an embryonic safari lodge. This could so easily be the start of our tale, but the family had no experience in the hospitality business so it was decided to sell the property to a tour operator. That could easily be the end of the tale, but 23 years later Karim, now a Canadian citizen, and his generation returned and bought back what is today the Amboseli Sopa Lodge set in 200 acres of private land, in the foothills of Mount Kilimanjaro. This was the first Sopa Lodge (now there are eight of them). Today Karim Wissanji is CEO of the family firm Sopa Lodges, and also of Elewana, as he explains: “At one point the opportunity arose to acquire three small camps out of administration; one had been partially destroyed by fire, another was destroyed in the El Nino storms and the third had not been completed.” Inspired by their potential (two were in ecologically sensitive sites in the Serengeti and Tarangire ecosystem, the other in Arusha) he put a proposal to restore these with a view to creating a luxury offering in Tanzania, above the price point of Sopa Lodges. His vision was to charge a premium price, enabling him to create a sustainable business that would generate enough surplus to benefit the surrounding communities and to protect the wildlife, which after all is the USP of this region. “It was vitally
The Masai Experience in Tarangire
“It was vitally important to me that the communities we operated within actively participated in the protection of our wildlife. That they saw the wildlife as an opportunity rather than a commodity” – Karim Wissanji, CEO
w w w. e l e w a n a c o l l e c t i o n . c o m
31
E L E WA N A G R O U P
Hippos on safari trail
The Sand River view
Expedition Africa Self Drive
32
August 2015
important to me that the communities we operated within actively participated in the protection of our wildlife. That they saw the wildlife as an opportunity rather than a commodity.� The other family members, while ready to support him, felt they did not fit with Sopa Lodges, so he decided to go it alone. He approached a local bank, and when asked for collateral, declining to seek further family support, responded that he and the assets were the sole collateral. Somewhat to his surprise the bank liked his style and in 2004 agreed the loan. It was tight. He was not sure he could afford to complete all three, and asked the receivers to remove the fire-damaged property from the package. This was the property now called Tarangire Treetops, and it lay outside of the Tarangire National Park, on community-owned land within a wildlife conservation area but with hunting concessions that, he felt, conflicted with his vision. But the receivers would not play ball. More importantly, he says, the local community impressed on him the need to bring this asset back to life; it had been an important source of income in the form of rental for the land plus a per-person fee for every guest. “After the fire, the sole source of income for the community was marginal agricultural activities and income from selling hunting permits. We agreed to rebuild the camp on the condition that they would participate in conservation and protect against poaching, which was rampant at the time; and that they
R E TA I L
A warm welcome - the guides
would begin to moderate the hunting with a view to stopping it altogether as tourism incomes increased. Frankly, it was a completely emotional decision.” In the last year Tarangire Treetops operated under its former South African owners the community received $7,000 in revenue. In its first year under Elewana they received $170,000. Additionally more than $1.5 million has gone into community development, including building schools and training community members on hospitality. Now more than 80 percent of the staff at Tarangire Treetops are employed from the surrounding community. Tarangire opened in 2005 and perfectly illustrates the company’s vision. It has government support at the highest level, says Wissanji: “It is a wildlife management area and we are protecting some 60,000 acres which act as a corridor for
“The idea is that leisure tourism will create enough revenue and the community will no longer depend on hunting activities” – Karim Wissanji
w w w. e l e w a n a c o l l e c t i o n . c o m
33
E L E WA N A G R O U P
Our SkySafari Pilots
Dining in the Masai Mara
34
August 2015
elephants moving within the Tarangire-Manyara ecosystem. The idea is that leisure tourism will create enough revenue and the community will no longer depend on hunting activities.� So the two damaged properties were rebuilt and the third completed and opened. This is the Arusha Coffee Lodge, a working farm surrounded by 2,000 acres of coffee plantations but only about three miles from the centre of the most important town in northern Tanzania. By 2008 Elewana had grown into a profitable group with its fourth property under construction. Entrepreneurship attracts its own, and it was then that he was approached by Minor International, the organisation founded in Thailand by selfmade billionaire Bill Heinecke at 17 (hence the name; he must surely be the world’s most
R E TA I L
precocious entrepreneur, having run his own street corner lemonade stand at the age of three). Today MINT is a $3 billion company with 140 hotels, among many other interests. There had been approaches from large tourism companies before, says Wissanji, but none of them interested him. After meeting up with Heinecke in the UK however, a 50/50 joint venture was agreed. “MINT was an amazing fit, and, sensitive to what we were doing in East Africa. The JV enabled me to fast track development of our business while retaining control of it. Furthermore, Thailand has always been associated with world class service and hospitality, a key pillar at Elewana and another opportunity to learn and enhance our own offering. It was also apparent to me that this was an opportunity to learn from Bill too.” Having created a sanctuary in northern Thailand for mistreated Asian elephants Heinecke clearly shared Elewana’s conservation strategy. The alliance increased the Elewana portfolio to eight, and paved the way to the next phase of expansion, the acquisition of the established Cheli & Peacock safari camps in Kenya, which Wissanji felt could have become his most direct competitor. Negotiations were protracted, but in January 2015 the deal was finalised. “I thought it critical that the founders Stefano and Liz Cheli continued to be part of the leadership of the business,” he says, “and fortunately they agreed to join the board and
Serengeti Expedition
“It enabled me to fast track development of the business while retaining control of it” – Karim Wissanji
w w w. e l e w a n a c o l l e c t i o n . c o m
35
E L E WA N A G R O U P
Serengeti Pioneer camp
Happy guests
36
August 2015
continue their active role. It is a testament to their belief in our company’s DNA and demonstrates their commitment to conservation.” Six months later, the two companies are busy adopting the best practices of each, and merging their back office systems, under the Elewana brand. However the fundamentals were already in place. “We were both founded on the principles of high value, low impact tourism; we both aim to create and offer our guests highly personalised and intimate experiences; and we both distribute a high proportion of our revenues to the communities within which we operate and to wildlife conservation locally.” East Africa has a great deal going for it, from the tourist’s point of view: a pleasant and predictable climate, political stability
R E TA I L
and welcoming people. From the beaches of the Indian Ocean to the permanent snows of Kilimanjaro, it also offers every kind of experience. This being the case it is surprising that the tourism industry in Tanzania and Kenya could have been affected by the outbreak of Ebola in West Africa. Just out of interest it is 5,300 miles from Dar es Salaam to Freetown, so much of America is nearer the seat of the problem than the other side of Africa, yet some people still think of Africa as a country not a continent. The Ebola scare hit bookings to destinations in East Africa by up to 40 percent, says Karim Wissanji, and unrest near Kenya’s northern border with Somalia has not helped. Though this is far removed from the country’s national parks, and does not affect Tanzania at all, insurers remain cautious and the British Foreign Office has only recently relaxed its advice on travel to Kenya. However there’s really no risk in travelling to either Kenya or Tanzania. Elewana is a Swahili word connoting peace and harmony, and that is what visitors will find whether they choose the amazing collection of 14 safari camps and beach properties from Kenya’s Kitich Camp in the north of Kenya to the amazing Kilindi resort on Zanzibar Island. This last has to be the ultimate in luxury and romance, acquired from its original owner Benny Andersson of ABBA fame, where each pavilion has two pools, its own butlers, staff and private gardens. What a place for a honeymoon!
Company Information INDUSTRY
Eco Tourism HEADQUARTERS
Tanzania FOUNDED
2004 PRODUCTS/ SERVICES
Camps, lodges and hotels within the Elewana Collection has been carefully selected for their unique accommodations and their iconic locations, providing close access to all the drama and spectacle of African wildlife in exceptional comfort
w w w. e l e w a n a c o l l e c t i o n . c o m
37
Company logo goes here
Amdec Group
Growing a Green Future
Written by: John O’Hanlon Produced by: Richard Deane
39
AMDEC GROUP
The future sustainability of our built environment is in the hands of today’s property developers
T
he iconic Melrose Arch mixed-use precinct in Johannesburg’s leafy northern suburbs has set the precedent for sustainable cities in South Africa for over a decade, starting long before the green building movement officially began in the country. Today, it continues its legacy of pioneering sustainability. Leading South African property company Amdec are owners in Melrose Arch. By taking a long-term view and optimising the critical mass of mixed-use developments, Amdec has become a front-runner in green building innovation in South Africa. Josef Quraishi, Head of Sustainability and Green Building for Amdec group, stated it will continue to push the sustainability envelope. Sustainability is a win-win Amdec sees sustainability as a win-win. “When we develop, we look at the broader context of investing in communities. A thriving community is good for business; the more attractive a community is, the more desirable our buildings become,” said Quraishi. He adds: “Amdec will continue with our commitment to find new and better ways to create greater sustainability and better resource efficiency, and use our hard-earned experience in sustainable development not only to benefit those who live, work and visit our developments, but also for the property industry as a whole.” Quraishi believes that, as a pioneer in sustainable development in South Africa, Amdec has a lot to
40
August 2015
CONSTRUCTION
offer by sharing its experiences and knowledge. “Our sustainability journey hasn’t been easy, and Amdec believes that sharing our lessons is important, as it helps others along the learning curve, and supports the movement for sustainability,” he said. Quraishi was part of the team who helped develop Green Building Council South Africa’s (GBCSA) Socio-Economic Category - a world-first for rating tools. In doing so, the GBCSA took the lead in developing a set of socio-economic criteria for green building rating tools. Socio-economic factors are particularly relevant in developing countries such as South Africa, and extend green buildings to encompass not just environmental sustainability but also socio-economic sustainability.
Melrose Arch The Piazza
w w w. a m d e c . c o . z a
41
AMDEC GROUP
The Koolcon Group is a property specialist group, that provides a hands-on approach through the appointment of our in house professionals. We specialize in design, construction, handover and maintenance. Offering a comprehensive design build solution in the commercial property market. We endeavour to ensure the best level of service with regular quality control, keeping our clients current, up to date and our projects on time. We are able to provide a service across a broad range of sectors including: • • • • • •
Banking and Financial institutions Factories Student accommodation Spa’s, conference facilities and hotels Shopping centres Industrial
• • • • •
Office Parks Civil works Residential developments Telecommunication Towers Medical centres
Johannesburg (Head Office) Tel: +27 (0) 465 6947, Fax: +27 (0) 86 600 2947, E-mail: info@koolcon.co.za Address: Unit D8, Deco Park, Cnr New Market & Witkoppen, North Ridge, Johannesburg www.koolcon.co.za .
Regional offices include: Durban, Port Elizabeth and Cape Town
Complete solutions for the resources and energy sectors
WorleyParsons is a leading provider of project delivery and consulting services to the resources & energy sectors and complex process industries. Our services cover the full asset spectrum both in size and lifecycle – from the creation of new assets to services that sustain and enhance operating assets. - BBBEE Level 2 - 30% PDI ownership
- Over 60 years’ experience - Deep local knowledge - Global expertise ContaCt Details www.novabuild.co.za 021 794 2874 info@novabuild.co.za
42
August 2015
46
countries
157
www.worleyparsons.com
offices
35,600
people
AMDEC GROUP
CONSTRUCTION
Encouraging positive impacts The way we design, build and operate our buildings can address, to some extent, societal challenges such as poverty, unemployment, lack of education and skills, and health. This GBCSA tool is designed to both measure, and encourage, these positive impacts. The Socio-Economic Category allows the socioeconomic achievements of new buildings and major retrofits to be recognised and rewarded under Green Star SA tools. It is a separate optional category for which projects can be rated alongside their standard Green Star SA certifications. As part of the initiative, the GBCSA simultaneously developed an International SocioEconomic Framework for the World Green Building Council, which can be used by other green building councils to apply to their rating tools. Quraishi points out that while South Africa has building codes that talk to sustainability, Amdec always looks to do more and do better. By considering the bigger picture, Amdec’s green building ethos has far-reaching positive impacts. Its holistic approach to green building is helping to change the way people think and live. “Developers like ourselves can contribute to our socio-economic context, not only with green building but by uplifting local communities, transferring skills, training and mentoring, and using local people and products. Even when contracting large building companies for developments, we can ensure they pay it forward as part of our agreement
Melrose Arch
w w w. a m d e c . c o . z a
43
AMDEC GROUP
Slip Street
with them. From a sustainability perspective, as a developer we have a responsibility to do what we can where we can.” noted Quraishi. Uplifting local communities Amdec puts this ethos into action wherever it develops. Among its community-specific initiatives, it has used material from construction excavation to rehabilitate a public park and is also taking care of a river course to ensure its banks are well maintained and help reduced flooding. When it comes to green building itself, Amdec is aware this is a skill that existed long before the company did. “Yes, technology plays a big role in today’s green building, but it isn’t the only factor.
44
August 2015
CONSTRUCTION
There are age-old proven methods of creating greener buildings, going back to nomadic structures that were oriented and built to a height that would provide shade for cattle. Similarly there are exciting ways to reuse and upcycle materials happening all around us, as smart people and communities find ways of creating exciting opportunities with items that others may see as worthless.” said Quraishi. So, Amdec’s approach to green building goes beyond active green building technologies to also incorporating more subtle elements of green building in design and orientation. While tree-lined streets, such as those found at Melrose Arch, are beautiful, what may not be immediately apparent is that they also play an important role in green building. The tree canopies provide shading on the front of buildings, helping to keep them cool. The bottom level of a building, and the upper levels, are usually the hottest. The trees mitigate the heat of the sun that bounces off the road. This increases comfort inside the building and decreases a building’s cooling costs. With Melrose Arch, and Amdec’s next R4 billion mega development of Westbrook, a 128,000ha mixed-use suburb in Port Elizabeth, it is taking the opportunity to explore the latest technologies in sustainability. In fact, Amdec hopes to take Westbrook entirely off the grid. Reducing electricity consumption Among the solutions Amdec has identified is the gas-powered trigeneration plant, which is only
Melrose Arch -The Piazza
Melrose Arch -The Galleria w w w. a m d e c . c o . z a
45
AMDEC GROUP
High Street
Iconic View
46
August 2015
in use at a handful of properties in the country. Capitalising on its benefits, it would reduce electricity consumption at a mixed-use precinct such as Melrose Arch by 50 percent, halving its dependence on the country’s power grid. Alongside this, Amdec has also invested over R100 million into alternative fuels, recycling waste and biofuel, and putting gas back into its system to be used within Melrose Arch. This will be the first time this is deployed in context of a South African mixed-used precinct. Quraishi noted that for Amdec, it is not just about sustainability and doing the right thing, but also about helping its clients to reduce their occupation costs and keeping them working when load-shedding hits. “Amdec is responding to the challenges of South Africa’s energy crisis,” said Quraishi. “This helps to take strain off our power grid, and our building users’ pockets, as well as being good for the environment and helping communities prosper.” While Amdec is adding more resource-efficient features to its assets, whether there is a rating tool available for them or not, it is also pursuing more green ratings for its properties. Having already earned Green Star SA ratings for two of its buildings in the last two years; Amdec plans to boost its pace of investing in green buildings by taking this number to six in the next 24 months. This means it will pursue more Green Star SA ratings for all its new developments, and some of its existing ones. At Melrose Arch, Amdec has earned its two Green Star SA ratings: 40 on Oak was South Africa’s first multi-unit residential project certified
CONSTRUCTION
Colourful Detailed Buildings
under the Green Star SA system, with a 4-Star Green Star SA Pilot certification and The Worley Parsons head office was awarded a 4-Star Green Star SA Office v1 Design rating. As part of its multiunit residential rating at 40 on Oak, Amdec cut energy consumption for each apartment by 50 percent and water consumption by 40 percent making the Melrose Arch apartments even more desirable. For the green rated office, it lowered energy consumption by 40 percent and water consumption by 50 percent. A platform for sustainable buildings Melrose Arch will also play a leading role in Amdec’s future targeted green star ratings, two of which have already been registered at GBCSA. For existing buildings, Josef explains that Amdec has prioritised getting ratings for single-tenant buildings. “Then
51-200
Number of staff employed by Amdec Group
w w w. a m d e c . c o . z a
47
AMDEC GROUP Melrose Arch
48
August 2015
CONSTRUCTION
we’ll move on to our multi-tenanted buildings, which can be more challenging.” said Josef. The green inner-workings of Melrose Arch support more than a single building, they underpin a whole precinct, making it an enabling platform for sustainable buildings. Melrose Arch is also packed with ingenious designs and small, smart green touches that also create an enjoyable environment. It includes a central district cooling plant that utilises evaporative cooling so its buildings use less air conditioning than usual, it uses gas and has integrated recycling. Its mixed-uses and pedestrianisation reduces the need for cars, it also benefits from good access to public transport. Josef explains that blue-chip businesses want their markets to know they are doing the right thing, so occupying a green rated building is becoming a business imperative for them. Amdec is like-minded and answering the call for green rated buildings in South Africa. Quraishi said: “Green buildings are also commercially desirable because they boost productivity and profitability by creating healthy workspaces that also mean lower absenteeism.” With soaring energy costs, clients across Amdec’s portfolio of assets, including its Evergreen Lifestyle Villages, enjoy the benefits of Amdec’s energyefficient, water-efficient and cost-efficient focus. For Amdec, its green building ethos is simply good business. “With our sustainability initiatives, Amdec ensures that whatever we do has a positive impact on their environment, in their community and beyond.” concluded Quraishi.
Company Information INDUSTRY
Construction HEADQUARTERS
Cape Town FOUNDED
1989 EMPLOYEES
51-200 PRODUCTS/ SERVICES
Sustainable development foundation for developing worldclass real estate and building design
w w w. a m d e c . c o . z a
49
Agility, Flexibility, And The Willingness To Succeed Written By: Abigail Phillips Produced By: Daniel Pritchard
S O U T H E R N E N G I N E E R I N G C O M PA N Y
How Southern Engineering built a company based on the demands of its customers, and made it work
Seco Ltwp Village
52
August 2015
A
gility, flexibility, and the willingness to succeed are three key drivers at SECO, which is aiming to be a standout service provider. The company is underpinned by an ethos of sheer determination to offer a wide variety of services, all at a high standard, and industry trends determines what path the company follows next. “The simple fact is that we have always been renowned for our capabilities within the marine sector,” says Cohen. “But over the last two to three years we have recognised a need to develop our on-shore expertise as well. As a company we have had to adjust our approach to sales and marketing in order to engage this new market. “We have developed different systems internally to gain the experience and the knowhow to penetrate new markets, with the aim of becoming the most successful service provider
CONSTRUCTION
Ltwp Accommodation Blocks & Roofing
in the region. We have done a lot of work recently trying to understand where we add value and how we can offer advantages to the markets we serve.” “We believe this is a shift in global business and are keen to embrace the trend.” For SECO, versatility and group capability is critical. The company takes great pride in saying, ‘there is hardly anything we cannot assist our clients with,’ and there are very few companies – on a global scale – that can say that. “We are solution based,” says Cohen. “We offer solutions for our customers’ problems and challenges, allowing them to conduct business faster and more effectively.”
600+ Number of staff employed by Southern Engineering Company
w w w. s e c o a f r i c a . c o m
53
S O U T H E R N E N G I N E E R I N G C O M PA N Y
Seco jetty, filling and piling
Gaining worldwide attention SECO was also responsible for the construction of accommodation units supporting Africa’s largest wind-power project in Marsabit County, Kenya. The Lake Turkana Wind Project, as it is formally known, cost €623 million to develop and will produce 310MW of electricity when it comes fully online in 2017. Furthermore, the sheer scale and notoriety of the project gained the attention of Kenya’s sitting president, Uhuru Kenyatta, who toured the project, broke ground at one of SECO’s accommodation units, and spoke with a number of the company’s on-site employees. The
www.eslon.co.ke
The company was incorporated in 1966. Its main objectives include manufacture of uPVC & PE Pipes and Fittings. It manufactures the largest and most comprehensive range of these pipes. It offers uPVC Pipes from 20mm to 630mm diameter and PE Pipes from 16mm to 450mm diameter. Manufactured with the modern equipment and technology, these pipes are suitable for a wide range of applications such as potable water transportation, irrigation, plumbing, drainage, sewerage, borewells, carrying industrial effluents etc. Since its inception, Eslon has been a regular supplier of its products for various water and sewerage projects in Kenya and continues to remain so till date. Its hallmark is that it ensures products of uncompromising excellence, meeting all relevant International and Kenyan Standards.
Manufacturers of Quality steel products in Africa
THINK STEEL THINK TONONOKA
Eslon Plastics of Kenya Ltd. Jirore Road, Industrial Area, Off Enterprise Road, P.O.Box 41761 - 00100, Nairobi - Kenya. Sales Office Board Lines Fax E-mail
54
+ 254 735 405112 + 254 726 476024 + 254 20 6651271/2/3/4 + 254 65 58408/9 + 254 07 86891874 + 254 20 6552419 info@eslon.co.ke eslonplastics@gmail.com
Month 2014
T +254 202493144-6 M +254 722 509261 E sales@tononokasteels.com www.tononoka.com Facebook Tononokagroup Twitter Tononokagroup
CONSTRUCTION
president made a call for businesses across the world to turn their attention to Kenya’s outstanding capacity for renewable energy generation. Cohen said: “We hosted the president and his ministers in the SECO village that we built; he laid the first stone in a house we were building, operated one of our machines and spoke with our employees about the project.” “This is a great case study for future projects, the Kenyan Government has been so supportive. Kenya is one of the leading countries for green energy. We are one of two Kenyan companies taking part in this project and have been the first contractor to start the project, we are proud of it!” added Cohen.
Seco Fabrication Workshop
w w w. s e c o a f r i c a . c o m
55
S O U T H E R N E N G I N E E R I N G C O M PA N Y
The Flying Horse at berth in the Dry Docking facility
56
August 2015
Breaking into new markets SECO has been developing its capability within civil construction, building and camps in remote areas that can support in excess of 500 people. “We can manufacture, design, fit and manage the camps with our group-wide expertise. The camp division is a new one for us as a company; however we have been developing the area for quite some time. We always constructed camps however, we have started managing them because we would rather manage them ourselves than go to a third party supplier. Alpha
CONSTRUCTION
Group has a long history in the food industry, but also in the areas of cold chain management, construction, logistics and more – it just makes perfect business sense for us to offer an endto-end solution. We are faster and undoubtedly more efficient as a standalone unit,” says Cohen. Building a world-class team With such a huge emphasis placed on inhouse capability, it will come as no surprise that people management and training is very important to the business. “We offer all our employees external training, allowing them to gain important qualifications and insight. We also have a robust internal training structure and put a lot of emphasis on the importance of local knowledge. We want our employees to feel part of the solution for customers, and that entrepreneurial spirit drives growth and innovation at the business. We are also dedicated to employing local people and helping the areas in which we do business thrive,” says Cohen. Passion, a thirst for growth, and the willingness to learn as an organization will keep SECO afloat for many more years to come. The company has put processes in place meaning it will never have its feet stuck in concrete. “We are agile, we will grow with the trends of the market, and we will always offer a world-class service no matter what we turn our hands to,” says Cohen. With promises like that, it’s hard to envisage anything but success for the company.
Company Information INDUSTRY
Mechanical/ Civil Engineering, Shipbuilding, Construction, Camps Solutions HEADQUARTERS
Kenya FOUNDED
1957 EMPLOYEES
600 + PRODUCTS/ SERVICES
Marine and logistics division of Alpha Group, with more than 60 years industry expertise
w w w. s e c o a f r i c a . c o m
57
Airports Council International, Africa Region (ACI Africa): Supplied by: ACI
59
ACI AFRICA
A
CI Africa was established as a region of ACI in 1991 with the overarching objective of advancing the collective interests of African airports and the communities they serve. ACI Africa consists of 62 regular members in 50 countries managing 250 airports and 21 World Business Partners. “The continent is vast and dynamic, and serving our membership requires developing bespoke solutions to myriad challenges,” explained Ali Tounsi, Secretary General, ACI Africa. “As such, we focus on training, conferences and exhibitions, and collaboration with aviation stakeholders to promote a safe, sustainable and economically viable airport industry that is well positioned for future growth.” In the realm of training, ACI Africa, in coordination with the ACI Fund and the ACI Developing Nations 60
August 2015
S U P P LY C H A I N
Assistance programme, regularly organis es free courses in French and English to members to improve the capabilities of their staff, especially in the areas of security, the development of non-aeronautical revenues and safety. Indeed, ACI’s top priority is ensuring safety across every aspect of airport operation. With this goal in mind, the ACI Airport Excellence (APEX) in Safety programme was established in 2012 with the main objective of promoting safety at member airports by identifying gaps and sharing best practices with an eye toward eventual aerodrome certification. In 2014 ACI Africa welcomed the APEX in Safety team at Sir Seewoosagur Ramgoolam International Airport in Mauritius; Félix Houphouët Boigny International Airport in Abidjan; Diori Hamani International Airport in Niger; Cotonou International Airport; Khartoum International Airport; PortGentil International Airport; and Ouagadougou International Airport. At the time of writing, Nigeria’s Nnamdi Azikiwe International Airport is preparing to host an APEX review in mid-June. “ACI Africa and its members understand that ensuring the safety of the traveling public is paramount to building a sustainable industry,” Tounsi said. “I’d like to congratulate African airports for their proactive stance with regard to improving safety standards.” ACI Africa is equally committed to representing its members’ interests on both the regional and world stages, participating in events on a
“ACI Africa and its members understand that ensuring the safety of the traveling public is paramount to building a sustainable industry” – Ali Tounsi, Secretary General, ACI Africa
w w w. a c i - a f r i c a . a e r o
61
ACI AFRICA
62
August 2015
S U P P LY C H A I N
regular basis as a means of sharing knowledge and bringing attention to airport issues. Most recently, ACI Africa actively participated in the Aviation ICT Forum; the Second Airport Expansion Summit; the UNWTO Regional Seminar on Tourism and Air Connectivity in Africa; the African Renaissance Movement Conference; IATA Aviation Day; the Summit of the African Strategy Roads; and the ICAO meeting on Development of Air Cargo in Africa. In addition to the above, ACI Africa organises events as a means of giving delegates a forum to share experiences and plot the future of the industry in the region. In 2014, ACI Africa held a very successful Regional Security Conference in Dakar, Senegal, as well as its 23rd Annual Assembly, Conference & Exhibition in Durban, South Africa. “2015 is shaping up to be just as exciting as last year,” Tounsi noted. “In April ACI Africa held the 53rd Meeting of the Board and Working Groups, with its Regional Exhibition and Conference taking place at the same time. Looking ahead, we will welcome delegates to Hammamet, Tunisia in October for the 24th ACI Africa Annual Assembly, Conference & Exhibition. “ACI Africa is proud to act as the voice of the region’s airports,” concluded Tounsi. “Africa is at the forefront of emerging markets with regard to its high potential for increased air travel, and as the airport industry evolves, we will be there to ensure that it does so safely, securely and sustainably.”
Pascal Kowu Komla, President
Ali Tounsi, Secretary General
w w w. a c i - a f r i c a . a e r o
63
Atlantis Mining SA machinery at Elandspruit and Kromdraai
IPC Coal Blue Sky Th Beyond for Black Empow Written by: Matthew Staff & Produced by: Anthony Munatswa
hinking Goes Above and werment in South Africa 65
IPC COAL
The South African Mining Company has set itself apart in a congested industry over the past six years, all the while ensuring that it enriches the lives of others as well as its own development
Kromdraai opencast mining area
66
August 2015
I
PC Coal is differentiating itself in a competitive junior mining market through a combination of turnkey products and services, Blue Sky thinking and an unparalleled devotion to Black Empowerment, both internally and in the surrounding region. Based in Durban, with its’ operational centre in Witbank, Mpumalanga (within 30km of its’ coal mines), IPC Coal’s progressive history has been driven by a succession of strategic acquisitions and sales, enveloping an expert developmental process for collieries in the surrounding area which have seen large-scale profit enhancements in each individual case. IPC Coal itself was founded in 2008 as a domestic marketing company for coal originating from Nucoal Mining and its flagship Woestalleen Colliery in Middelburg, Mpumalanga. Chief Operating Officer at the time, Paul Erskine played a pivotal role in the success of that operation and now, in his role as Chairman of IPC Coal, he can reflect on the platform that Woestalleen provided. “I was involved in 2005 with the Investors, where we purchased Woestalleen Colliery for around R65 Million before selling it on four years later for R650 Million, a 1,000 percent increase,” Erskine explained. “We built Nucoal Mining from 65,000 tons a month production to eventually 350,000 tons per month, and IPC was responsible for all the local distribution of the coal to all the guilt-edged, top boiler companies.”
MINING
Following the sale of the Woestalleen site in 2009 and a subsequent foray into a charitydriven bucket list adventure for Erskine, he then returned to open up the Elandspruit Colliery which was mined out by May 2013, as well as the neighbouring colliery in a joint venture with Nungu Colliery where 13 million tons of coal remains. One Stop Shop IPC Coal’s journey stems from the 2004 Mining Rights Act in South Africa when Black Empowerment was brought in, subsequently breeding the junior mining sector, away from the major mining organizations on the continent. To differentiate itself from the 18 or so other companies in the niche market though requires an entrepreneurial flair which Erskine was quick to pick up on and implement by making Elandspruit Colliery Wash Plant
Key Personnel
Paul Erskine Chairman In July 2006 Paul Erskine negotiated the take over and management buyout of Woestalleen Colliery for R65 million. He was appointed COO of Nucoal Mining. Woestalleen Colliery was to become Nucoal Mining’s flagship. Paul arranged with Frazer Alexander to set up Phases 2 and 3, which was the expansion of the washing plant at Woestalleen from 65,000T to 350,000T per month. He arranged R150 million worth of funding which completed the capital expenditure required to take Woestalleen to a 2.4 million Ton coal exported. He also negotiated the acquisition of Vuna Colliery / Zonnebloem Coal Reserve in 2006 which had 26 million tons of coal. He was instrumental in negotiating a 3 million ton / 5 year Eskom contract for middlings. By 2009 the Woestalleen Colliery had more than 20 million tons of reserves and a fully operational 350,000T washing operation but lacked the export allocation for its 2.4 million tons of coal capacity. Paul approached Coal of Africa, a listed company on the AIM and JSE and by December 2009 Nucoal was successfully sold to Coal of Africa for R650 million. Paul decided to do his “Bucket List” and most of his adventures can be seen on his website at www.paulerskine.co.za
w w w. i p c a f r i c a . c o . z a
67
IPC COAL
Aerial view of the Elandspruit Nungu opencast area
IPC Coal a one stop shop coal provider. “We’ve gone further down the value chain where we take it from Prospecting Rights now, which is really at the Blue Sky level, and we undertake the drilling, geology, environmental studies and the final Mining Rights Application,” he said. “My job is to operate the mines and make sure we turn them around so that the Investors get a really good return.” This approach has fostered a strong reputation in the coal hub of Middelburg, with Investors attracted by the proposition of flexible entrance into the project, whether it’s from early development, Mining Rights stage,
Specialist Gas / CBM services and certified Well Cap Control – core holes to completing perm test / production wells. Multi-Purpose Core/RC/ DTH/ Water Hammer drill rigs and associated supporting equipment manufactured by www.bohrmeister.co.za and Directional drilling www.geosonic.co.za
We offer 24/7 operations with 24 hour live streaming camera surveillance “finger on the pulse” working environment, patented above ground mud sump system which requires no-dug mud sumps. Mud and/ or air drilling with BOP, Rotating Head and 140 bar Booster. Environmentally compliant. www.infin.co.za
Container kitchen sponsored by IPC Coal
or even through to the marketing phase. Throughout the whole service provision though exists IPC Coal’s most prized assets, its sub-contractors. Erskine continued: “Every single part of our business is sub-contracted out. Companies like Atlantis Mining who carry out all our mining operations have something like R250 million worth of equipment, so instead of learning the business that they have mastered, we rely on them and add value for each other.” Atlantis Mining has subsequently mined more than 26 million tons of coal under Contracts that Erskine that has placed with them. This epitomizes the successful model which also incorporates a separate transport division, marketing, in-house sales operation, Social and Labour, Health and Safety and Engineering sub-Contractors, all of whom have worked alongside Erskine on a long term basis to foster
“Companies like Atlantis Mining who carry out all our mining operations have something like R250 million worth of equipment, so instead of learning the business that they have mastered, we rely on them and add value for each other” – Paul Erskine, Chairman
w w w. i p c a f r i c a . c o . z a
69
IPC COAL
First blast at Kromdraai
“Once you unlock those Blue Sky standalone projects, that’s where the true value comes in” – Paul Erskine
70
August 2015
a mutually beneficial and trustworthy team. Blue Sky thinking IPC Coal’s expertise in the junior mining sector is to attain groups that are at a Mining Rights stage, to then structure the proposition, raise the money and to get the mine up and running within three months of signing the Contracts. By that point, the mine will have begun making a return on the investments put into it, completing the cycle. However, to separate itself from market competitors requires the ability to identify ‘out-of-the-box’ deals, as Erskine explained: “We look for opportunities where we know that there are washing plants and coal in the area, knowing we can put it together because of the people that we know.
MINING
“Some we take equity stakes in and raise funding for, but my main focus now is to look towards Blue Sky Prospecting Rights business because of the early entry and low value. “The drilling, exploration process and environmental studies per mine only costs around R3 Million, so once you package those and validate everything and put it all together, you’ve spent a relatively low amount on a project which you can either sell for R15 per mineable in situ ton or mine them out. “Once you unlock those Blue Sky standalone projects, that’s where the true value comes in, to complement my bread and butter business which still exists at the operating mines of Elandspruit and Kromdraai.”
R3 million Cost of drilling, exploration process and environmental studies per mine
Removal of overburden at Kromdraai
w w w. i p c a f r i c a . c o . z a
71
IPC COAL
“…in everything we do, we’re trying to pass on that expertise, to enrich people in our organisation” – Paul Erskine
The Learners of Amaoti School outside Durban
72
August 2015
Domino effect Having such a positive influence on Black Economic Empowerment through its’ core operations is one thing, but IPC Coal prides itself just as much on its own Corporate Social Responsibility influence through the Domino Foundation. Instead of enriching a particular black individual or company, IPC decided to enrich an organization in the form of the Domino Foundation, which helps fund children’s homes, feeding programmes, literacy initiatives and life skill development. “It is an incredibly ethically, well run, accountable foundation,” Erskine said. “I have also set up the Mbuyelo Jesu trust which holds 30 percent of IPC Coal’s shares so that the funds that run through it are given to the Domino Foundation, and we work very closely with them on a project by project basis.” This footprint and foundation through
MINING
Company Information INDUSTRY
Junior Mining HEADQUARTERS
Jonathan Erskine (CEO) receiving a Certificate
Durban, South Africa
of Appreciation from Amaoti School FOUNDED
everything the company does has bred exponential growth over the past six years, and Erskine is confident that it is initiatives such as this which fit into the same Black Empowerment ethos which helped develop the business from the beginning. “I also run a programme where I take on exprisoners once they are released, to train them as either drivers or weighbridge operators, within one of our sub contracted companies, because everyone is redeemable and because others wouldn’t take a chance on them, their loyalty towards you is unquestionable. Erskine concluded: “This is just another contribution that we make and in everything we do, we’re trying to pass on that expertise, to enrich people in our organization. “As we expand, instead of sourcing human resources from outside, we find people from inside and move them up the chain, and that’s why it’s called ‘Domino’.”
2005 EMPLOYEES
24 REVENUE
R1.2 billion from 2011-2014 PRODUCTS/ SERVICES
Coal, Cement
w w w. i p c a f r i c a . c o . z a
73
www.t eix eir aduar te.p t ger al@t eix eir aduar te.p t
“Teixeira Duarte – Engenharia e Construções, S.A.” is a Portuguese company that started operating in 1921 in the fields of Geotechnical and Foundation Engineering, which gradually extended to other fields of engineering, such as Buildings, Infrastructures, Metalworks, as well as underground, mining, railway and maritime works. Always maintaining the imprint of a true Engineering Company, with recognized expertise in the design, innovation, construction and management of major projects and developments, it has been operating in the field of underground and mining works since 1981, mainly through its subsidiary EPOS, S.A., which, with its acknowledged experience, still has the most advanced technology and equipment for the performance of this type of works, remaining continuously active for more than 30 years in major mining projects, in the fields of prospecting and survey, infrastructure construction and exploration. True to its performance values, Teixeira Duarte has achieved a steady and sustained growth that has allowed it to build a strong business capacity, detaining means and resources, namely human, which have enabled it to undergo multiple internationalization processes and broaden its areas of expertise. Having achieved a turnover of more than EUR 1,500 million in 2013,
Teixeira Duarte Group currently has around 12,500 employees operating in 16 countries, in 4 continents, working in 7 different sectors, notably in Construction, Concessions and Services, Real Estate, Hotel Services, Distribution, Energy and Automotive Industry. Teixeira Duarte has been listed on the stock exchange market since 1998, but it maintains a stable shareholder structure, mostly dominated by the Teixeira Duarte family, which, along with its history and the operational capacity of its teams and resources, gives it the confidence and responsibility to be able to continue to fulfill its mission: Execute, contributing towards the construction of a better world.
Christensen CS14 C drilling rig – Indicative graph of the drilling capacity in meters, at diameters BQ, NQ, HQ and PQ
Gold prospecting for COLT RESOURCES in Escoural, South of Portugal
Palabora Mining Compan
How Strategic Investment Se Of Palabora And The People
Produced By: Anthony Munatswa Written By: John O’Hanlo
ny (PMC):
ecured The Future e Of The Limpopo
on 77
PA L A B O R A M I N I N G C O M PA N Y ( P M C )
South Africa’s only producer of refined copper and Limpopo’s biggest employer, Palabora Mining Company (PMC) is in expansion mode, a task it is executing with exceptional respect for both community and ecology
78
August 2015
Palabora Mining Company was incorporated in South Africa in August 1956 and was owned and managed by Rio Tinto until 2013 when it was acquired by a consortium led by the Industrial Development Corporation (IDC) of South Africa Limited and China’s Hebei Iron & Steel Group. Acting CEO Maboko Mahlaole was working at the company in the capacity of HR Director at the time of the acquisition, and has seen PMC pursuing new and encouraging strategies under its new owners. Nobody could say that Rio Tinto and its minority partner Anglo American were not committed to the mine, but at the time of the recession, the implementation of an expansion plan to extend the mine’s life for a further 20 years was in doubt. The high copper grades obtained from the original open pit mine, which created the ‘biggest hole in South Africa’ having been largely exhausted, and the $410 million underground mine, whose production capacity reached 30,000 tonnes of ore per day reaching the end of its life, a decision had to be made, and in November 2014 the board finally approved a $9.3 billion expansion programme to extend the mine at a deeper level. The Lift II mine will be dug 450 metres below Lift I and will ensure a continuation of copper mining in Palabora to 2030 and beyond. This long term vision had to encompass not only building the deep mine, but also addressing the beneficiation operations. As much as 30 percent of the headline cost will be taken up
MINING
Palabora Mining copper refinery
with the addition of a new processing plant. Copper is not PMC’s only product. Though copper had always been the main revenue earner until three years ago, when it started to earn more from magnetite, an iron ore. Today a greater share of turnover still comes from magnetite. To take advantage of this the company wants to increase its capacity to process magnetite. Two years ago it was processing a little over three million tonnes per annum (tpa) of magnetite, says Mahlaole. “Our target is to increase magnetite production to ten million tpa.” In June 2015 a new magnetite plant was commissioned that will ramp production up to six and eventually ten million tpa. Internal logistics were also constricting magnetite production, he says. “We are working on a project that we call the magnetite expansion.
“Our target is to increase magnetite production to ten million tonnes per annum” – Maboko Mahlaole, Acting CEO
w w w. p a l a b o r a . c o m
79
PA L A B O R A M I N I N G C O M PA N Y ( P M C )
SUPPLIERS OF FIT-FOR-PURPOSE ENERGY SOLUTIONS Sasol and Palabora Mining Company. Together leading South Africa into a better future.
INSERT IMAGE HERE
Sasol turbodieselTM ULS 10ppm First with the cleanest diesel to power a cleaner future!
www.sasol.com
80
Month 2014
PA L A B O R A M I N I N G C O M PA N Y ( P M C ) Two years ago our magnetite capacity was just over 3 million tpa. The target is to be able to produce up to 10 million tpa. This project is under way, in fact we just commissioned a new magnetite plant as part of the ramp up to 6 million tpa and eventually 10 million. The higher figure will be reached by optimising the logistics internally. We have a stockpile of around 220 million tonnes of magnetite spread over a big area – currently it’s moved by tractors, and dried using outdated fan technology.” The new plant incorporates modern drying technology, and a study is taking place on how best to optimise transportation of iron ore to the railhead of Transnet, and how the latter might help to facilitate this. Another key part of the process is the copper smelter. Being able to produce 99 percent
SUPPLIER PROFILE
MINING
Working underground at the Palabora Copper mine
SASOL
Sasol is an international integrated energy and chemicals company that leverages the talent and expertise of our more than 32 400 people working in 37 countries. We develop and commercialise technologies, and build and operate world-scale facilities to produce a range of highvalue product streams, including liquid fuels, chemicals and low-carbon electricity.
www.sasol.com
w w w. p a l a b o r a . c o m
81
PA L A B O R A M I N I N G C O M PA N Y ( P M C )
EVERY DAY, BUSINESSES ARE using our gas MORE AND MORE We see our responsibility. To answer Africa’s growing demand for cleaner, cheaper and more reliable energy. We’ve invested in LPG for the long-term as an integrated energy platform. With quality assurance everyone can depend on. And by making sure we control our supply chain we also offer you something unique: confidence in the continuity of your LPG supply.
82
Month 2014
What’s more, we go beyond supplying energy by providing on-site technical support. So there is always someone ready to help you get the most from your gas. By securing today, we’re making a more sustainable future. One that everyone can enjoy. oryxenergies.com
PA L A B O R A M I N I N G C O M PA N Y ( P M C ) pure copper anode differentiates Palabora from its regional competitors, however the old smelter is reaching the end of its useful life since its emissions no longer meet South African regulatory standards. Permission is being sought to stretch its life into next year by retrofitting it with new technology. That would allow a completely new, environmentally efficient smelting plant to be sourced from China and commissioned early in 2016. There was no appetite for investing in a new smelter under the former ownership, says Mahlaole, but Hebei did not flinch at the need to invest in this plant – another long term strategic commitment. The mine’s new-found sustainability is a winwin, he says. I think the divestment from Rio Tinto and the investment in the mine and the smelter
SUPPLIER PROFILE
MINING
Drilling on the face
ORYX ENERGIES
Oryx Energies is a key player in LPG across sub-Saharan Africa. In South Africa, we are proud of our partnership with Palabora Mining Company (PMC) (Pty) Ltd – where we provide value added solutions, including tank and process monitoring, as well as on-site management. Oryx Energies occupies a leading position in the South African LPG Market. We supply LPG Bulk, Cylinder, Wholesale, Propane and Butane to a wide range of industrial, commercial and domestic customers. We offer energy cost reduction, remote stock management, supply from all major refineries in South Africa, an import and strategic storage facility, and a Level 2 B-BBEE contributor status.
w w w. p a l a b o r a . c o m
83
PA L A B O R A M I N I N G C O M PA N Y ( P M C )
SUCCESS STARTS WITH JHB 74587B
THE RIGHT PARTNER
Achieving excellence is your number one priority. Helping you get there is ours. What makes us a leading fuel marketer is the commitment we bring to transformation in the fuel industry through our strong B-BBEE credentials. By understanding your particular business needs, we are able to provide agile solutions and service, which means you can focus all your energy on achieving success, while we fuel it. To ďŹ nd out about Masana, visit www.masana.biz
Provider of shipping services for unitized, bulk and project cargoes from Southern Africa to Europe and the Far East since 1974 Specialists in the carriage and distribution of forest products worldwide, as well as bulk logistics and transhipment
At Citi, we are as unique and connected to Uganda as you are. Doing business in more than 40 countries across the continent, no other bank knows Africa like we do. Congratulations UBA on 30 years of service. For more information contact: Gearbulk Shipping Singapore Pte. Ltd Contact: Jishnu Ghosh Email: jdg@gearbulk.com Tel: +65 6508 9200
84
Gearbulk Durban Commercial Representative Office Contact: John Currie Email: jnc@gearbulk.com Tel: +27 82 573 9933
www.gearbulk.com
Month 2014
Š 2011 Citibank, N.A. All rights reserved. Citi and Arc Design, and Citi Never Sleeps are trademarks and service marks of Citigroup Inc.
PA L A B O R A M I N I N G C O M PA N Y ( P M C ) bought a new lease of life for this region. PMC has benefited from China’s policy of investment overseas, particularly in Africa. They see Palabora as a showcase for that policy, securing copper and iron ore supplies, a business success story and also a launching pad for their Africa policy. We are fortunate to be in this situation!” Most fortunate of all in the eyes of Maboko Mahlaole is the fact that PMC will continue to be able to employ large numbers of local people, and improve life for their families. “Unemployment in this region is over 30 percent. Fortunately at Palabora we have a training centre, accredited by the Department of Higher Learning, where we already run a lot of courses. We train fitters, boilermakers, electricians, rock breakers and other trades. “So we have a large training footprint of our own within the business. But in the light of the expansion project, we have partnered with the contractors like Murray & Roberts and Master Drillers to put together a programme to standardise training. At the same time we brought in the community leaders and local authorities to ensure there is fairness in employment.” Having seen the problems that can rise in large projects such as the stadium building programme for the 2010 World Cup and some of Eskom’s energy programmes, he believes it’s important not to over-fuel community expectations, while making sure that community based service providers get a fair share of the
MINING
RD8 Raise Bore machine being constructed on site
“We brought in the community leaders and local authorities to ensure there is fairness in employment” – Maboko Mahlaole, Acting CEO
w w w. p a l a b o r a . c o m
85
PA L A B O R A M I N I N G C O M PA N Y ( P M C ) cake. The main contractors are encouraged to source and outsource locally, employing as many skilled people as they can rather than bringing in workers from other states or abroad. Environmental management has always been a part of Palabora culture. “We live side by side with vulnerable fauna and flora; we need to look after that as well as the safety of our employees. For example we need to look after the Limpopo river that runs through our mine – it provides sustenance to many communities in South Africa and through into Mozambique.” PMC has a total demand of 110MW across its site. In 2012 Palabora Copper engaged Concentrator
“If you do not pay attention to what is happening around you may not survive long as a business!” – Maboko Mahlaole, Acting CEO
86
August 2015
MINING
the Australian energy consultant Ensight to review its energy expenditure, during which process it identified $20 million of potential savings. Three years on the exercise has really delivered. “We saved $5.3 million in energy costs, received R 23.1 million from Eskom in recognition of our performance, saved enough power for 77,400 households plus enough water to sustain 2,050 elephants for a year, and cut greenhouse gases weighing as much as 12,850 fully grown elephants!” Continuing the analogies, his favourite one is that enough coal was saved to drive a steam train from Cape Town to Cairo and back, 17 times. “It has gained us awards and set an example to other big businesses in the country. In our way we are trying to fight climate change and contribute towards good environmental practices,” he says. For Maboko Mahlaole, who has been tackling employment issues for 35 years, people come first. “I am optimistic that the focus is not now solely on the individual – there is a new concern for communities. If you do not pay attention to what is happening around you may not survive long as a business!” Perhaps that’s why PMC has seen very little in the way of industrial discontent (over a period of some turmoil in the country as a whole). There is no migrant labour here, living in camps. Almost all of the 2,400 employees working at Palabora live en famille within 20 kilometres of the mine, coming to work on company buses.
Company Information INDUSTRY
Copper Mining HEADQUARTERS
Limpopo, S.A. FOUNDED
2012 EMPLOYEES
2,400 REVENUE
R4 billion PRODUCTS/ SERVICES
South Africa’s large copper mine, smelter and refinery complex.
w w w. p a l a b o r a . c o m
87