SA Business Integrator - Volume 8 l Issue 2 by Media Xpose

A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N

Volume 8 | Issue 2 | April 2022

COVER FEATURE

TUHF’s approach demonstrates commitment to the inner city

Government’s role in

job creation

Data is only

Future trends

in green financing R65.00 Incl. VAT

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Current Affairs

Anglo American’s zero emission haulage solution Economic Development

Business Integration

SAFFRON SAFFRON Groupof ofCompanies Companies Group

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P.O. Box 423, Sea Point, 8060, Cape Town P.O. Box 423, Sea Point, 8060, Cape Town Contact Number/ WhatsApp: +27 090 6873 Contact Number/ WhatsApp: +27 8484 090 6873 Email: admin@saffron-group.co.za Website: Website: www.saffron-group.co.za Email: admin@saffron-group.co.za www.saffron-group.co.za

SAFFRON Group of Companies

PICTURED ABOVE: MANGANESE MINING OPERATIONS IN ZAMBIA, IRON ORE PRODUCTION IN THE NORTHERN CAPE AND CHROME CONCENTRATE PRODUCTION IN RUSTENBURG

SAFFRON MINERALS AND ENERGY

Scrap Metal

Other Minerals/ Commodities

Current Major Projects 1.

Manganese Mining in Zambia (A Proudly SAFFRON GROUP owned initiative)

Chrome ROM and Chrome Concentrate Local Trade and Export

Coal Local Trade and Export

Iron Ore Export

Diesel Local Trade

Scrap Metal Export

P.O. Box 423, Sea Point, 8060, Cape Town Contact Number/ WhatsApp: +27 84 090 6873 Email: admin@saffron-group.co.za Website: www.saffron-group.co.za

ED'S NOTE

The first quarter of the year has passed and we are becoming more cognisant that resilience and agility in business and professional life is a key theme that will continue... We are seeing an ever-increasing cost of living, increased repo rates and continued high unemployment rates. Realistically we are all feeling the pinch, and most businesses are having

South African Business Integrator @SABImagazine

Coming up next...

Our upcoming July 2022 edition of SA Business Integrator's special focus is “Women in Leadership”. For more information, please email elroy@sabusinessintegrator.co.za or call 021 424 3625

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to become even more agile to weather the storm to ensure sustainability and profitability. South Africa has so much potential to lead, but we are somehow missing the mark. Why is that? In the corporate world, often departments or individuals get a lot of flack for “working in silos”. In a corporate environment, particularly with high performance teams, continuous engagement and solid implementation is required for delivery – and when something does not go according to plan, agility accountability and lessons come to the fore. For South Africa to truly realise its potential, and to become a global leader, industry, government, public, activists, etc, need to work together to come up with tangible solutions. Government, business, NGOs etc. invest in a variety of initiatives, but we need to determine if these solutions are sustainable and how it will positively impact going forward. Let’s take, for example, the education sector. How does the education sector work together with industry to prepare learners for future employability prospects? How are tertiary institutions working with industry to create more apprenticeships, internships, etc? How is government drafting legislation to upskill learners that will benefit individuals, communities and business at large? There are no easy answers, but we cannot approach solutions in silos. Our resilience over the past few years has proven we are capable of achieving great things – it's time we come together and proactively engage, implement and grow holistically.

Tashne

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• ESG Initiative of the Year African Legal Awards 2021

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CONTENTS

65 10 COVER FEATURE TUHF's approach demonstrates commitment to the inner city

ECONOMY SA’s economy has a small window of opportunity to bounce back and rebuild

Q&A Electrolux: Driving sustainable solutions

JOB CREATION Government’s role in job creation

INCOME TAX Time to get our tax affairs in order

TRANSFORMATION Social impact sector defies prevailing gender transformation trends

ADVERTORIAL Trillion Cart Investments (Pty) Ltd: We seek to build and share wealth in Africa

ECONOMICS The moral bankruptcy of minimum wage laws

ADVERTORIAL MiX Telematics: Telematics trends for 2022 and beyond

EDUCATION Higher education’s impact on SA’s economic wellbeing is dwindling

ADVERTORIAL Gautrain Management Agency demonstrates how it exerts the shared value principles

DATA Data is only gold if you know how to use it

ADVERTORIAL Vodacom: Digitally connecting multiple mines in one secure place

THOUGHT LEADERSHIP The Townships Project contributing to the socio-economic development of SA

ADVERTORIAL Sparkling Diamond: Sparkling (like a) Diamond

PROPERTY Turning property into prosperity in 2022

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PROFILE Soloplan – creating solutions for the entire world of logistics

DIGITAL MARKETING Five digital marketing trends

METALS & ENGINEERING Government needs to support the metal & engineering sector

Special Focus: Mining Sector LEAD FEATURE: ANGLO AMERICAN nuGen™ – Anglo American’s zero emission haulage solution

ENVIRONMENTAL STEWARDSHIP Embarking on the 2050 carbon neutrality through decarbonisation of the mining sector

TRANSFORMATION The role of the mining sector in promoting enterprise & supplier development

APPRENTICESHIP Welders are a dime a dozen, but quality welders are not

GREEN FINANCE Future trends in green financing

ADVERTORIAL BDO: How mines can best position themselves to lead the way on ESG

SUSTAINABILITY SA’s environment, society and governance metrics ranking

ENVIRONMENT Environmental compliance monitoring & enforcement

MINING Sustainable environmental technologies crucial to SA mining industry's future

TECHNOLOGY Technology can fast track skills development in the mining sector in 2022

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A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N

Volume 8 | Issue 2 | April 2022

A B U S I N E S S I N T E R A C T I O N P U B L I C AT I O N COVER FEATURE

TUHF’s approach demonstrates commitment to the inner city

Government’s role in

job creation

Data is only

Future trends

gold if you know how to use it

in green financing

SPECIAL FOCUS: MINING SECTOR

R65.00 Incl. VAT

nuGen™ –

22005

Anglo American’s zero emission haulage solution

9 772411 292008

Current Affairs

Economic Development

Business Integration

Cover image: TUHF Image credits: 123rf.com

South African Business Integrator @SABImagazine

Distribution: ON THE DOT

Published by:

PUBLISHER Elroy van Heerden elroy@mediaxpose.co.za EDITOR Tashne Singh editor@sabusinessintegrator.co.za SUB-EDITOR Tessa O’Hara tessa.ohara@gmail.com CONTENT MANAGER Wadoeda Adams artwork@mediaxpose.co.za DESIGNERS Anja Bramley artwork1@mediaxpose.co.za Shaun Mays artwork2@mediaxpose.co.za EDITORIAL ASSISTANT Maurisha Niewenhuys maurisha@mediaxpose.co.za EDITORIAL CONTRIBUTORS Busisiwe Mavuso Chris Blair Temba A Nolutshungu Jacques Farmer Judith Chinkumbi Abel Sakhau Gordon Malebo Khurshid Fazel Garyn Rapson ADVERTISING SALES DIRECTOR Elroy van Heerden elroy@sabusinessintegrator.co.za ADVERTISING SALES CONSULTANTS Jaun Haas jaun@mediaxpose.co.za Kanak Nathoo kanak@mediaxpose.co.za DIGITAL MARKETING MANAGER Jay-Dee Van Rensburg digital@mediaxpose.co.za SOCIAL MEDIA CO-ORDINATOR Kyla van Heerden social@mediaxpose.co.za

6 Carlton Crescent, Parklands, 7441 Tel: 021 424 3625 Fax: 086 544 5217 E-mail: info@sabusinessintegrator.co.za Website: www.mediaxpose.co.za Disclaimer: The views expressed in this publication are not necessarily those of the publisher or its agents. While every effort has been made to ensure the accuracy of the information published, the publisher does not accept responsibility for any error or omission contained herein. Consequently, no person connected with the publication of this journal will be liable for any loss or damage sustained by any reader as a result of action following statements or opinions expressed herein. The publisher will give consideration to all material submitted, but does not take responsibility for damage or its safe return.

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Together, we are shaping a better future. #ShapingTogether

Scan here: Find out how we’re partnering towards a better future.

COVER FEATURE: TUHF

TUHF's approach

demonstrates commitment to the inner city A lack of service delivery in inner cities has become a major contributor to urban sprawl in South Africa. SA BUSINESS INTEGRATOR spoke to Sivan Govender, Operations Executive for TUHF, a specialised commercial property financing company that finances property investors exclusively in inner cities about the key issues. What do you foresee happening if this crisis is not addressed timeously? Sadly, lack of service delivery in the inner cities has become a major contributor to urban sprawl in South Africa. Though some municipalities are performing better than others, we’re seeing some degree of lack of delivery in all our funding areas. This means that investors are increasingly cautious about investing in urban densification or regeneration projects because, without reliable basic services, it’s harder to attract tenants and retain them. While TUHF and a few other large investors continue to invest in urban regeneration, our collective impact on curbing urban sprawl and uplifting communities in the inner cities could be much more significant. For example, if local municipalities were doing more to maintain roads and pavements or ensure rubble from their maintenance work is removed more timeously, the inner cities would be more attractive to developers. Slow delivery of planning approvals, occupation certificates and other municipal services are also a deterrent. We're finding that our investors are starting to look outside of the inner cities for development opportunities to diversify their risk.

sabusinessintegrator.co.za

COVER FEATURE: TUHF

I worry that a lot of the more seasoned investors, and even new investors, just get put off by all the red tape. With the lack of service delivery, some feel it's just not worth the effort and it's too risky.

How can TUHF help alleviate this problem? TUHF is dedicated to urban regeneration and inner cities. We have a near 20-year investment record in the inner city, and we’re not going anywhere. We believe we’re operating in the right market – we have a R4 billion loan book that demonstrates our commitment to the inner city. In recent years we have expanded our investment capacity, for example into townships through TUHF21's uMaStandi product, and we're continuously expanding our funding footprint into other areas. This is driven by the fact that we see potential in people and property that others may not see, rather than a loss of appetite for the risk associated with inner city investment. We also remain committed to engaging with local government to resolve the challenges around service delivery. We know we're going to ruffle some feathers, but we believe it is part of our responsibility to our clients to put our weight behind these discussions.

How has the pandemic, and the workfrom-home model impacted the demand for commercial property? TUHF’s focus is on affordable rental housing rather than on office space or other types of commercial property. Though our market fared much better than most property sectors during the pandemic, it wasn’t immune to all the impacts. We saw an upsurge in vacancies during the hard lockdown, but we also saw good recovery as soon as it was lifted. In fact, some of the metros we operate in are seeing much lower vacancy rates now than they had before the pandemic. Johannesburg, for

example, had an oversupply of rental housing before the onset of the pandemic hit. Because the pandemic put a stop to a lot of building activity and new units coming online, that oversupply issue has corrected itself and we’re seeing vacancy rates reducing. Providing units with work-from-home capability has become much more important in our market. Good, reliable WiFi is becoming essential when planning a development or refurbishment, for example. Good lighting and ventilation as well as cost-saving approaches to utilities, and other facilities are conducive to productivity in a workfrom-home scenario.

Is there a larger focus now on the residential sector? I think there's certainly been an increase in conversions of non-traditional buildings into housing. I’m certainly engaging in more discussions with commercial property owners about converting mothballed office buildings into rental accommodation.

What role does TUHF play in enabling the development of student accommodation? About 15% of our book is student accommodation, though this is also our limit for investing in this space. It is a market that must be approached carefully, because it’s susceptible to things like student protests or cash-flow challenges at the National Student Financial Aid Scheme (NSFAS), which can prevent the universities from honouring their contracts timeously. Student accommodation can also displace more traditional inner-city tenants, and we feel strongly about keeping a balance here. However, there is a strong need in some metros, and we work with our clients on identifying opportunities that lead to developing and providing good quality student accommodation. Our approach is to future-proof the product by

sabusinessintegrator.co.za

COVER FEATURE: TUHF

strongly advising our clients to focus on traditional family apartments rather than dormitory type accommodation. We can structure repayments to accommodate the 10-month academic year. We also work with them to ensure their property property is configured in such a way that it can be easily adapted to changing demands. For our student accommodation clients to have more security we need a relationship with NSFAS directly, and this is something we’re hoping to actively pursue for our next financial year.

What is TUHF’s Sustainable Bond Framework? We launched our Sustainable Bond Framework and South Africa's first social bonds, Urban Ubomi 1, in March 2021. Each of our social bonds issuance to date has been oversubscribed, so I believe there is an appetite for impact investing in South Africa. When you invest in a local economy, like TUHF does, you stimulate local economic development in a neighbourhood sense. As we invest in inner cities, we are more likely to create employment, stimulate spending, contribute support for small businesses and in so doing grow local micro-economies in an inclusive way. The Sustainable Bond Framework allows TUHF and its associated structured finance vehicles to issue Green and Social bonds that support lending to qualifying projects. This ensures that the relevant impact that we have, such as providing funding in the affordable housing space and providing access to finance for small scale property entrepreneurs, is recognised. Of course, it’s not just about the impact for us, or our investors. It’s important for us to show good returns on these investments along with the social impact.

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We are well placed to take advantage of the opportunities in our niche. Our brand presence and reach, and our commercial resilience, all indicate a positive outlook for the organisation. We’re happy that we’ve implemented what we had committed to in terms of our robust platform for growth, and the balance between bilateral loans and our securitisation structures are properly aligned to fund our R1 billion+ per annum growth goal. We now need to chart a way forward for growth.

COVER FEATURE: TUHF

Balancing quality and affordability lies at the heart of TUHF’s pragmatic optimism Govender believes affordable housing should also be quality housing. His pragmatic approach to helping clients achieve this balance stems from his vast experience in property development and management, and a down-to-earth view of the positive impact TUHF can make in the areas that the impact focused organisation supports. "In my role as a national operations executive, I have found that I have to be able to change hats for each node we operate in. Understanding the uniqueness of each market TUHF operates in

2. Quality of the asset is critical Property is a long-term game. Often, we help our clients buy an existing asset and refurbish it, and this is the start of a 15-year relationship between us and them. The asset must be of a quality that it can service the loan and generate some profit for the client as soon as possible. 3. Finishes are key When it comes to finishes, it is significantly important to be practical. The finishes chosen must be attractive, of good quality and have some longevity

around the country is what enables us to help our clients build successful businesses," he says. And this has always been critical to TUHF’s success. "Our specialist and unparalleled knowledge of the city is core to our ability to advise clients about the practicalities of their projects, so that they can make sound investment decisions. "It also allows us to make pragmatic lending decisions even as we seek to create impact through scale, and ultimately run a successful business. It also lies at the heart of our ability to spot potential – to be optimistic about the potential of an investment, project or a client. "As a property guy first, and a financier second, I consider it my duty to provide insight into the practicalities of building a successful project. If you know property, and the node you want to invest in, making informed, financial decisions follow naturally.

but they do not need to cost a fortune. As an advisor to our clients, I consider it imperative not only to advise about the financial aspects of the project, but about the quality of the finished product and how to achieve this balance between quality, aesthetically pleasing spaces and affordability for the target market. This includes considerations around sustainable and green interventions that may be incorporated into the refurbishment and finishes. Heat pumps, for example, make a lot more sense in terms of affordability, reliability and longevity than solar geysers while also ensuring a positive impact on the tenants’ utility costs. 4. Hands-on property management It’s vital for property entrepreneurs to stay on top of basic services such as security, cleaning, maintenance and so on. Simple things like damaged fences or unkempt common areas can be off-putting to tenants and it’s important to address them as they occur. 5. Good financial management Whether property entrepreneurs manage these themselves or make use of an agency, good hygiene around rent collection and the overall management of the property’s finances can make or break a business. "If you follow these five simple concepts, it’s difficult to go wrong, and I bring this practical approach when advising and supporting clients," Govender concludes. 

Govender's 5 property fundamentals for newcomers to property entrepreneurship: 1. Understand the node and the rentals, and what drives the needs of the community These details can vary vastly from city to city, and even from node to node within a city. We always strive to share our knowledge of these variances with our clients, even before we agree to finance a project.

sabusinessintegrator.co.za 11

ECONOMY

SA’s economy

has a small window of opportunity to bounce back and rebuild South Africa has a limited window of opportunity to reset the economy and build a stronger base for sustained long-term growth. Seizing it will require rebuilding business and investor confidence by moving swiftly to implementation of the economic reforms outlined in Minister of Finance Enoch Godongwana’s 2022 Budget speech.

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ECONOMY

The window “has been created and remains open” due to the positive effects on the South African economy of global stimulus injected into the markets to combat the economic effects of the Covid-19 pandemic, says University of Stellenbosch Business School guest lecturer Jason Hamilton. "The revenue windfall from a mining commodities boom that had enabled Godongwana to extend the social relief grant, cut corporate tax and reduce the budget deficit would likely remain over the medium-term, but he cautioned that the window of opportunity would only be “open for

have seen a bounce back, a recovery and to some extent a rebuild, it is not near the strong recovery hoped for, as seen in other markets,” Hamilton says.

about the next three years," says Hamilton. “Thus the focus on building confidence is critical. Reform proposals are to be welcomed, but they must move swiftly to enactment and implementation, efficiently and effectively across the board, coupled with intensifying the fight against corruption in both the public and private sector,” he adds.

challenges of the SOE’s and specifically the ability of Eskom to supply electricity. This uncertainty remains over the medium term while some of the reforms proposed as well as renewable energy projects are brought online.” In the global context, South Africa is impacted by the slowing pace of recovery as many countries have started pulling back on stimulus packages, compounded by continued supply chain disruptions and a rising inflationary environment, this further exasperated by the geopolitical challenges and uncertainty faced. “Despite these challenges, South Africa is the most industrialised nation on the continent, has a well-capitalised and regulated financial sector and there remains a window of opportunity to reset and build a better base to support long term sustained growth,” Hamilton says. Considering the precarious nature of the global and local economies and their related recoveries, within the context of the challenges that lie ahead, Hamilton makes recommendations for where business owners should be focusing in 2022.

Recovery still fragile Meanwhile, for business to take advantage of the opportunity window would require a focus on debt reduction strategies, agility and preparedness for uncertainty, reviewing business models, and entrenching the rapid technology adoption forced by the pandemic into business strategy for competitive advantage, comments Hamilton. While the country had experienced a “healthy and strong bounce back” from the economic contraction of 2020, Hamilton said recovery remained fragile, indicated by the downward revision of the expected 2021 GDP growth rate to below 5%. South Africa’s medium-term GDP growth is projected at 2.1% for 2022, reducing to 1.6% and 1.7% for 2023 and 2024, while the International Monetary Fund (IMF) projects the global growth rate at 4.4% and 3.8% for 2022 and 2023, and 3.7% and 4% for sub-Saharan Africa. “This context is a clear sign that, although we

Covid-related repercussions to remain a challenge He adds that the relatively low rate of Covid-19 vaccinations, with the threat of further waves and the potential of further restrictions on the economy, was likely to remain a challenge deep into 2022. “This has a direct impact on consumer and investor confidence, further impacted by the

1. Debt reduction Strong GDP growth in 2021 enabled many companies to not only reduce net debt exposure but also build up cash reserves, placing them in a strong position of resilience to deal with future shocks and also to take advantage of opportunities.

sabusinessintegrator.co.za 13

ECONOMY

However, Hamilton says both public and private sector debt levels remain significantly elevated as companies emerge from the effects of the Covid-19 pandemic. These companies would need to prioritise debt reduction strategies, both from a structural and affordability point of view, in order to ensure sustainability. 2. Mergers & acquisitions “Globally, M&A activity has hit records levels over the last two years, in almost all markets, and this trend is set to remain for 2022 as companies rationalise operations by selling unprofitable or non-core assets, applying the proceeds to settle or reduce debt. “This strategy is something that all businesses need to consider, from SME’s to large and listed corporates, to ensure they are and remain flexible and hence structurally sound, with a healthy core business.” For businesses emerging from the pandemic with healthy balance sheets, M&A can build out or reinforce their capabilities and thus secure competitive advantage, but Hamilton warns that M&A comes with complexities and companies would need to develop an organisation-wide M&A capability to increase the likelihood of success. 3. Business models “Business owners across the spectrum have learnt from the pandemic to ensure they remain vigilant and are prepared for shocks. The impact of the pandemic and new challenges faced during 2020 and 2021 mean that companies cannot trade and be managed as before; a new and different approach is required.” Hamilton says the ongoing global supply chain disruptions since 2020 indicated that the best practice of the past, focused on efficiency and just-in-time systems, needed to shift to a focus on robustness and sustainability. “We have seen how truly connected the world

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and the markets are, and that our connection and reliance on our supply chain goes much further than just direct relationships but requires a much more indepth understanding of the ecosystem. “This applies beyond supply chains into the business model itself. Corporate governance requires a rework of the risk matrix and application of integrated thinking across the business to review and adapt business models to an ever-changing and dynamic environment. “The emerging ecosystem approach to markets and business models calls for companies to focus on agility and connectedness, in terms of both customer and competitor perspectives.” Hamilton says that business leadership and employees need to develop the ability to be agile, to adapt and change, supported by an organisational culture that enables the business to do so in a strategic manner and on a sustainable basis. 4. Technology The pandemic forced many companies to rapidly adopt new technology and automation in order to continue their operations. “Now it is time to take a step back and do careful planning for a true digital, innovation and technology strategy aligned to the business model, that enables the company’s specific capabilities and competencies to deliver competitive advantage in serving customers and outperforming competitors,” Hamilton says. 5. Focus on the long-term “Leadership must remain focused on the longterm horizon, looking 5 to 10 years out, to ensure the business is being built to be best positioned to take advantage of the opportunities and challenges ahead. The short-term forecast will change and flex, but keeping a focus on the longer-term horizon, the trends and trajectory, can help leadership remained focussed and see the short- and medium-term volatility in context.” 

INTERNATIONAL

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MOVING YOUR ORGANISATION FORWARD Environment. Society. Governance.

Q&A: ELECTROLUX

Electrolux:

Driving sustainable solutions In 2020, PowerOptimal, a leader in innovative sustainable energy and demand management solutions, partnered with the South African subsidiary of the Swedish global appliance giant Electrolux, to bring cost-effective, sustainable solar photovoltaic (PV) water heating solutions to the South African market. SA BUSINESS INTEGRATOR spoke to Murray Crow, Managing Director at Electrolux South Africa. How does the Elon Smart Water Solution operate? The Elon Smart Water Solution will monitor and closely manage geyser performance and energy consumption, as well as trigger early alerts to homeowners and insurers in the event of water leaks, element failures and other operational information. One major advantage is the plug-and-play solar PV capability – no separate solar PV controller is needed, which reduces cost. The solution provides smart, green connected geysers to be monitored and managed from a mobile phone. It is also the only smart water heater with integrated solar PV capability in the world. Whilst electrical components on standard geysers typically have a one-year warranty, the Elon Smart thermostat will have a two-year warranty, extendable to five years on registration. Combined with solar PV modules that typically have 25-year performance warranties, and the fact that there are no moving parts except for a few relays that switch under zero load, it is expected that the solution will provide many years of maintenancefree operation. Risk is reduced through active monitoring, management and reporting of water heater performance and safety.

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Being locally designed, what added value has the Elon Smart Water Solution brought about? New opportunities will be created in South Africa across the value chain – including manufacturing, retail, installation, maintenance, support and services. Local design and manufacture mean a much closer relationship with the manufacturer, enabling better control and visibility of the supply chain, as well as supporting local manufacturing jobs.

Which industries can benefit from using such a system, and could it also be a viable option for low-income housing? With an installed base of over 7 million electric water heaters in South Africa, the residential water heater market (new build and retrofit) will be the main focus for the foreseeable future. Commercial and industrial applications will be explored later. Business models should be developed to allow low-income housing developments to reap the benefits of clean solar PV energy. Solar PV is already the lowest-cost way to heat water in South Africa on a total cost basis (in other

Q&A: ELECTROLUX

words, considering all costs such as capital cost, installation, running and maintenance cost and system lifetime). The Elon Smart Water Solution simplifies the solar PV installation, further reducing cost, which means it has potential even in low-income housing environments, which are very cost sensitive. It is estimated that households use about 17% of electricity nationally, rising to about 35% during morning and evening peaks. If half of all households with electric water heaters had an Elon Smart Water Solution fitted with solar PV modules,

What do you expect the SA market uptake to be for the world’s first smart geyser with integrated solar PV capability?

and these systems ran on solar PV during peak periods, our modelling indicates that it could reduce the load on the grid by about 7% (which is about two stages of loadshedding). If one million of the more than seven million electric water heaters in South Africa were retrofitted with an Elon Smart thermostat and solar PV modules, it could reduce the national carbon footprint by 1.2 Mton CO2/yr.

from the property development industry. The growth of smart developments and household interest in both green and smart appliances should further boost market uptake. The insurance industry can also benefit from the risk reduction and early alert capabilities.

The energy efficiency requirements of the National Building Regulations as prescribed in SANS 10400-XA prescribe the inclusion of alternative water heating means for all new residential housing. Our smart and solar PV-ready geyser brings a simplified and more cost-effective way to comply to the market. Thus, we expect significant interest

What are some of the initiatives Electrolux is undertaking from an advocacy perspective to help promote sustainable solutions to the broader population? Electrolux is committed to being a better company in our own operations and in helping to provide education and guidance in better living. Internally, we’re focussed on solutions such as increasing the solar energy capacity at our sites to reduce our reliance on the electricity grid. We recognise the importance of reducing our carbon emissions and our waste to landfill. Rather than simply talk about these activities, we are doing them right now across our local business and all our global operations. We also continually look at how we can educate consumers to preserve food for longer and eat in more a sustainable way. We’re doing this by promoting sustainable eating and helping consumers reduce food waste, adopting more plant-based eating and minimizing nutrition loss in cooking.

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Q&A: ELECTROLUX

Through all these activities, we are able to positively drive awareness and impact, as we believe that as a global company, we have a responsibility to shape living for the better.

In terms of production, cost, installation capabilities and maintenance, how ready is Electrolux to meet demand? The Elon Smart Water Solution has been designed for manufacturability and scalability. The local manufacturer has experience in high volume electronics manufacturing and has been manufacturing the current-generation Elon 100 solar PV water heater at scale. Electrolux has a well-established national distribution, support and maintenance network that already supports large volumes of standard electric geysers, solar geysers and heat pumps, as well as the Elon 100 solar PV water heater. In terms of installation capacity, installation of the smart geyser is exactly the same as any standard electric geyser, and the solar PV installation can be done by any solar PV technician.

How has shifting to cleaner energy solutions help unlock opportunities for Electrolux South Africa? Cleaner energy solutions provide a variety of environmental and economic benefits to Electrolux, most importantly a reduction in air pollution. In our operations, we’re investing heavily in solar as a positive way to reduce our carbon emissions and to achieve independence from the grid. This independence is enormously beneficial in maintaining continuity of production, which in turn produces economic benefits including reduced costs and reduced downtime. Both these factors have a positive flow-on effect to our ability in planning our labour needs with confidence. We also see consumer and prospective employee sentiment shifting towards a position of expectation for large organisations to source

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cleaner energy solutions. By continually improving in this direction, we believe that we not only create a better environment for our own employees and families, but we are establishing an ethical credibility that creates a business that people want to engage with.

What are the next steps for Electrolux in terms of smart energy solutions? We aim to become a global sustainability leader in our product lines; our company constantly seeks solutions that help shape living for the better. The smart hot water solution exemplifies Electrolux’s ambition to reduce the carbon footprint of our products and our operations overall. Through our sustainability framework, 'For the Better 2030', we are committed to becoming climate neutral across the value chain and we globally work at reaching our climate targets. Since 2015, our company has reported a 70% reduction in absolute CO2 emissions from operations. As a brand, we aim to develop products and services that enable people to save energy, water, and resources every day while helping to foster a more circular economy. 

Murray Crow, Managing Director at Electrolux SA

JOB CREATION

Government’s role in job creation “We all know that government does not create jobs, businesses create jobs.” That simple statement during President Cyril Ramaphosa’s State-of-the-Nation address in February triggered a debate marked largely by binary “either-or” positions. That is a pointless argument. The important debate is to assess the most effective way for business and government to work together to grow the economy. By Busisiwe Mavuso, CEO of BLSA Of course government creates jobs – it does so through infrastructure development and providing services to the public, among other areas. But it’s primary role should be to create an enabling environment for the economy to grow and it’s in such an environment that businesses increase profits and create jobs. Unless government can grow the economy, public sector jobs are unsustainable because tax revenue will not grow.

An implausible position The one implausible position is the belief that the public sector can somehow create jobs in a shrinking economy, marked by a declining tax base and a deteriorating fiscal position. One of the most important decisions that directors of companies – listed and nonlisted – need to make every year is on what to do with profits. How much should be reinvested

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in the company, how much should be retained as cash reserves and how much should be distributed to shareholders through dividends? Their assessment needs to be based on their confidence in being able to generate higher returns with that money, making it worthwhile for shareholders to forgo a portion of the profits now. They also need to ensure they have sufficient cash

JOB CREATION

on hand to trade through a difficult future. High cash levels are therefore either a sign of trouble or of confidence – trouble if it is held to cover costs during a recession in which revenue will dip, confidence if it is held temporarily while preparing to invest it. They then recommend to the shareholders – the owners of the company – how much to pay in dividends, how much to hold for bad times and how much to reinvest. Obviously, the outlook hinges on the state of the economy and expectations of its performance in the future. Should directors believe the economy is in such a state that they cannot be confident that the investment will generate sufficient returns, and the company doesn’t need it, it is their responsibility to return the funds to shareholders. For far too long now the economy has not been in that desired state where directors can be confident of generating high returns if they reinvest profits into company expansion. That is exactly where government’s role is important: its responsibility is to ensure that company directors regain confidence that reinvesting profits is in the best interests of shareholders.

The primary source of job creation And that’s the primary source of job creation. In an environment where businesses are investing to expand, they create more jobs. Indeed, for professional services companies, investing profits may consist purely of hiring more employees in areas where they may be short of capacity so that they can service more clients. For manufacturers it might mean opening a new plant while retailers may wish to expand into other markets. Each of these creates jobs. Such an environment also promotes entrepreneurship and small business development. Small businesses follow the same principles and will reinvest profits to expand, and entrepreneurs will be willing to risk their cash to start a new business.

That’s a virtuous cycle. As more businesses start up and established businesses enjoy robust growth, more and more jobs are created, and more and more tax revenue flows into the fiscus. That provides funding for government not only to better alleviate the plight of a shrinking number of financially distressed citizens but also to “invest” in further developing the economy’s efficiency through infrastructure and other initiatives that will in turn accelerate economic growth.

A perfect example of government enabling business development A perfect example of government playing an enabling role for business development is through the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP). This has been successful, yet it perhaps does not get the recognition it deserves, particularly for the role that government played in it. Through the Independent Power Producers Office, a unit with the energy department, a novel process was established that was so successful it was quickly emulated across the globe. Importantly, it remained untainted by the corruption of the state capture era. Instead of publishing a single tariff that the government was willing to pay, the IPP Office conducted consecutive auctions in which potential producers bid a certain price per megawatt they were willing to sell at. The structure also guaranteed returns through the 20-year power purchase agreements to supply Eskom. The format saw prices falling dramatically from an average of R3.12/kWh in the first round of bidding in 2011 to just R0.47/kWh in the recently completed fifth bid window. Despite such low prices, the IPPs are still queuing up – the fifth bid window was four times oversubscribed. Including smaller auctions and the fifth bid window, the programme has injected nearly R260 billion into the economy, according to IPP Office

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JOB CREATION

figures, with more than R40 billion of that from offshore. So far 55 217 job years have been created, with the programme contributing to R1.3 billion to socioeconomic development and R402 million to enterprise development. The process hasn’t been perfect. Despite its success, political interference and state capture protagonists stalled the programme for three years from 2015, which killed off many small manufacturers that had started producing renewable energy components. With the programme kickstarted back to life in 2018,

address structural flaws in our economic system that are hindering growth. These include further liberalisation of the energy sector, trying to make spectrum available to telecommunication companies to enable them to be globally competitive within the fourth industrial revolution through 5G technology while bringing data costs down for consumers, restructuring our ports and railways to improve efficiencies and through refining the skills visa process to enable expertise to be brought into the country where it is lacking. More recently he has turned his attention to

government needs to focus on re-establishing and growing that base of small manufacturers – a concept that fits its industrialisation and localisation policies. The government’s role in the REIPPPP process is exactly the kind of supporting role that business needs it to play. When it gets it right, businesses flourish and create jobs.

another important area, establishing a unit within the Presidency to make it easier to do business by cutting red tape across government departments. This is particularly critical for reviving the small business sector that was so devastatingly ravaged by the Covid lockdowns. A new loan scheme for small businesses is also being introduced. Supplemented by the R1 trillion infrastructure programme, these are all important initiatives that, once fully implemented, will establish the type of conditions that are indeed conducive to growth and job creation. 

Expanding the concept to the rest of the economy may be difficult Expanding that concept to the entire economy is no easy task because in other areas, government’s role has not always been constructive. The policy uncertainty within the mining sector has seen its contribution to GDP in real terms fall from about 21% in 1980 to 7.5% in 2020. That’s a clear sign that government is getting things wrong: its role is not conducive to growth and a new approach is needed. A good place to start would be clearing the backlog of nearly 5 000 applications for mining and related rights. That alone would trigger massive economic activity in the sector particularly in the context of the buoyant commodities market. Given the generally distressed state of the wider economy today, the challenge is for government to transform numerous other sectors of the economy by implementing conditions that are conducive to growth. President Ramaphosa is trying to achieve that, instituting long-term measures to

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Busisiwe Mavuso, CEO of BLSA

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INCOME TAX

Time to get our

tax affairs in order The South African Revenue Service (SARS) is currently on a major tax compliance drive and taxpayers and their practitioners are feeling the pressure. However, system failures, delays with refunds and communication overload, then sudden cessation, are causing frustration for taxpayers, tax practitioners and SARS alike, says Phillip Joubert, Manager for the Centre for Tax Excellence at SAIPA. The 2021 tax year has come to an end, and it truly does seem that SARS will continue throwing us curveballs, with a number of changes predicted to be implemented in the upcoming filing season. Until that is confirmed, practitioners will need to remain diligent and agile in their engagements with both SARS and their clients. Taxpayers have to get into the habit of keeping their supporting documents and to provide them

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well in advance of the submission date for tax returns. SARS is relying more and more on third party data and tax practitioners need to know their clients in order to pick up any data anomalies. This can prevent understatement penalties and other issues later. It is also up to the tax practitioner to train their clients on best practice, as this will save all parties from a lot of frustration in the future.

INCOME TAX

SARS is dealing with a legacy system and a new system, and as they merge the two something gets fixed while something else gets broken.

A number of SAIPA members do not have a proper engagement letter in place, which is in essence a contract between the practitioner and the client stipulating what each one’s responsibilities are. It is there to protect both the practitioner and the taxpayer. “We also advise tax practitioners to do a 'due diligence' on new clients, even if it is a quick search to pick up any negative information that may make them uncomfortable dealing with the company or individual’s tax affairs,” says Joubert.

Online query management and practitioner complaints SARS does boast an online query management system and the ability for tax practitioners to log queries on eFiling. However, feedback on the efficiency of the system has not been good. “Practitioners are either getting no response, incorrect responses or responses that are not related to the query at all,” comments Joubert. "A lot of the frustration can be attributed to both SARS and practitioners not following due process. The administration of tax practitioners is not always up to date and SARS’ IT-system remains a 'big work in progress',” says Joubert. "SARS is dealing with a legacy system and a new system, and as they merge the two something gets fixed while something else gets broken." Tax practitioners frequently complain to their Recognised Controlling Bodies (RCBs) that SARS is drowning them in correspondence, yet often

receive little guidance on what is expected of them. Sometimes there is a tax reference number that can be matched to a taxpayer, but in other instances there is only a transaction reference, leaving the practitioner in the dark as to who it belongs to. There was also a period where communication from SARS to tax practitioners ceased, while the taxpayer received all the correspondence, causing great confusion. Another issue for many practitioners is the turnaround time on feedback from SARS on queries, verifications and audits. SARS does not always stick to their Service Charter and members face frustration in continuous follow-ups with inadequate response. “The internal process at SARS to escalate taxpayer issues was quite lengthy. Recent changes did bring some relief,” says Joubert. Tax practitioners now have direct access to regional stakeholder teams through their RCBs which has sped up the process. “SARS is aware of the issues, and they are trying to resolve them. We do continue to advise SARS on these issues through various mechanisms at our disposal.”

Good standing Tax practitioners need to ensure that their own tax affairs are up to date, as well as any company related to them. They have to be in good standing with SARS and their RCB. “We want tax practitioners to treat their own practice as if it is a client. They should be putting the same amount of care into their own affairs as they do for their clients. You sometimes need to work on the business and not just in the business,” says Joubert. Practitioners who are not in good standing with the tax authority have 60 days to rectify the issues or they will be deregistered from SARS as a practitioner. This is not a position anyone wants to be in. 

sabusinessintegrator.co.za 25

Rand Mutual Admin Services (Pty) Ltd (CIPC Reg No. 2012/190552/07) is an Authorised FSP 46113 licensed with the Financial Service Board and forms part of the RAND Mutual Group of Companies

TRANSFORMATION

Social impact sector defies prevailing gender transformation trends The social impact sector in South Africa and the rest of Africa is having a significant impact on gender transformation compared to other sectors, a leadership expert says.

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TRANSFORMATION

“Companies are looking for exceptional mid-tosenior level leaders to take them into the future post-pandemic,” says Tracy Dawson, Partner at Jack Hammer Africa, Africa’s largest executive search firm. “A most notable development right now though, is the increase in the number of companies in the social impact sector seeking these types of leaders, and specifically asking for women when they compile their candidate briefs,” she says.

Dawson says in contrast with leadership appointments in other sectors, where gender transformation is improving, but only sluggishly so, 63% of Jack Hammer’s appointments in the social impact sector in Africa over the past two years have been women. “This is significant, as it is the only sector where senior female leadership appointments outweigh those of men, and indeed far more than the corporate equivalent.”

An increase in briefings for leaders in the social impact sector The social impact sector is broadly defined as the collective of organisations which include foundations, philanthropic investors, NPOs, charitable institutions, industry bodies, thinktanks, research institutions and CSI-focused organisations. Covid and the global lockdowns have hit women especially hard, as they were more likely than their male counterparts to drop out of the workforce, notes Dawson. The resulting participation gap (and consequent pay gap) has meant that it may be more difficult than ever for women to experience career advancement or salary equity. “However, it would appear that the social impact sector, by virtue of its core business imperative, is holding firm on a diversity agenda in contrast to other sectors. This is no accident – transformation is an entirely intentional and deliberate strategy, and needs to be kept on the table,” she says. “Now that leadership searches have picked up again, we are not only noticing an increase in briefings for leaders in the social impact sector, but also the explicit request for female candidates. And these appointments are being made across the whole of Africa, not just South Africa, where the trend also holds. “This is important because emerging female leaders are challenging cultural and societal norms and conventions, and are not only advocating for the under-served women on the continent, but also serving as positive role models to millions of young Africans.” 

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ADVERTORIAL: TRILLION CART INVESTMENTS

An epitome of black excellence – Trillion Cart Investments (Pty) Ltd

We seek to build and share wealth in Africa

Trillion Cart Investments (Pty) Ltd is an entrepreneurial vessel captained by Dr Radebe with a view to bringing about economic change in Africa. It is a 100% black owned conglomerate which established its first independent business in 2009, with the birth of other businesses thereafter. In 2014, all established independent businesses were consolidated into a fully-fledged conglomerate in the making – Trillion Cart Investments (Pty) Ltd that has over 18 distinct subsidiary companies in 16 different industry sectors. Trillion Cart Investment’s vision is to continuously expand and diversify its business operations to become one of the leading multi-national conglomerates, providing world-class and competitive products and services that enhance stakeholder value, whilst empowering its communities, creating employment and wealth.

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Our three core values guide the way we conduct our business: 1. People: In recognition of the reality that people are what makes the business, we strive to conduct our business with integrity and in a professional, courteous and honest manner. We use our time, energy and resources to make a valuable contribution, not only to customers and business partners, but to the community at large especially where our business operates. 2. Innovation & quality products: We encourage innovation! We provide quality products and services that exceed customer expectation. 3. Black excellence: We are uncompromising in our professionalism and strive to be the best in everything we do as one of the leading institutions – a knowledge hub of African excellence.

ADVERTORIAL: TRILLION CART INVESTMENTS

Our greatest pride and achievement is the establishment of a pharmaceutical company that combines indigenous African medicines with modern science to bridge the divide and produce a healing herbal tonic called AGRICO, Umhlonyane, and a signature product of Imvelo Pharmaceuticals. We believe in understanding the needs of communities in areas where we do business so that we are able to make meaningful contributions to their upliftment. We conduct enterprise development training

sessions, which focus on the most important aspects of running a business in the areas of finance, marketing, legal compliance a human resources. Trillion Cart Investments' success and reputation is rooted in its history, its track record and its values. The company identifies growth opportunities in different industries and has invested in a wide variety of business sectors, achieving significant historical milestones to achieve the size and recognition it enjoys today.

As these various investments were made, Trillion Cart focused on the key principles of creating an economic unit: • Employees and customers drive the Trillion Cart strategy • Entrepreneurs implement the Trillion Cart strategy • Distributors and shareholders benefit from the Trillion Cart strategy • Trillion Cart believes that the right people are its most important asset • Trillion Cart is committed to empowerment • Trillion Cart is committed to global expansion Trillion Cart's head office is located in South Africa and has expanded its footprint to African neighbouring countries (Eswatini, Botswana, Zimbabwe and Mozambique) and is also tapping into international markets. Despite its size, Trillion Cart Holdings is a highly entrepreneurial, decentralised and incentivised group. Trillion Cart Holdings comprises four umbrella divisions: o Services Division o Production, Manufacturing and Distribution Division o Sales and Retail Division o Sports and Recreation

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sabusinessintegrator.co.za 31

ECONOMICS

The moral bankruptcy of minimum wage laws By steadfastly sticking to the policy of a mandatory minimum wage, government seems to glorify the demonstrably provable socioeconomic destructive consequences. These will be further exacerbated by the unemployment catastrophe that is unfolding before our eyes. By Temba A Nolutshungu, Director of the Free Market Foundation Curiously, the original rationale for the introduction of minimum wage laws in SA was to protect white labour from black competition. In SA’s War Against Capitalism, Prof Walter Williams cites Henry Allan Fagan, a judge of the appellate division in SA, who stated in 1960 that, in the interests of preserving and protecting the vested interests of “the way of life of the best portion of the population, the rate for the job [meaning a statutorily mandated minimum wage] and [job] reservation was necessary to protect whites, coloureds and Asiatics from Bantu”. If we are ever to make a serious dent in SA’s cataclysmic unemployment levels, a critical review of labour policies is required. No aspect of labour market policies should be regarded as sacrosanct.

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ECONOMICS

All rational comments and proposals grounded in empirical evidence warrant consideration. In this context, I believe it is appropriate to question the motivation for and maintenance of minimum wage laws in SA.

Hidden dimension Williams also notes that in the US the first federal minimum wage law, the Davis-Bacon Act of 1931, was intended to exclude black workers from competing with their white counterparts. He quotes congressman Miles C Allgood, who testified in support of that Act: “That contractor has cheap coloured labour that he transports, and he puts them in cabins, and it is labour of that sort that is in competition with white labour throughout the country.” Williams further demonstrates how neatly the thinking of the Brotherhood of Railway Trainmen (a US trade union) coincided with the sentiments of the SA Mine Workers’ Union. In the 1910 Washington Agreement between the US union and the Southern Railroad Association, the union stated that “where no difference in the rate of pay between white and coloured exists, the restrictions as to the percentage of Negroes to be employed does not apply”. Their SA counterparts stated explicitly in 1919 that, “It is now a question of cheap labour versus what is called ‘dear labour’, and we will have to ask the commission to use the word ‘colour’ in the absence of the minimum wage, but when that (minimum wage) is introduced we believe that most of the facilities in regards to the coloured question will automatically drop out.” This hidden dimension of minimum wage policies is encapsulated in the following extract from an essay by US economist,

Prof Thomas Sowell, titled “Minimum age and unintended consequences”: “The net economic effect of minimum wage laws is to make less skilled, less experienced, or otherwise less desired workers more expensive... thereby pricing many of them out of jobs. Large disparities in unemployment rates between the young and the mature, the skilled and the unskilled, and between different racial groups, have been common consequences of minimum wage laws.”

Artificial barrier Both authors make the point that no matter whether minimum wage laws are explicitly motivated by a discriminatory agenda, or driven by altruistic considerations, the effect is the same. Minimum wage laws protect the employed at the expense of the unemployed (especially the lessskilled unemployed). They protect the former from competition from the latter by making it impossible to take on unemployed workers at wages below the stipulated minimum wage. Furthermore, they constitute an artificial barrier to the employment of low-skilled jobseekers, who are generally young, inexperienced and desperate to gain a foothold in the labour market. Developing economies are, by definition, more labour intensive and therefore have a larger supply of unskilled labour and higher levels of unemployment than capital-intensive developed countries. For this reason minimum wage laws affect them far more severely. Why then are the calls for minimum wage laws so persistent and vociferous in developing countries? It seems arguments in favour have won the moral high ground, especially in countries such as ours that have a long history of unfair discrimination and a long tradition of union activism. Those who argue against minimum wage legislation are seen as cold, uncaring and

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ECONOMICS

insensitive to the “exploitation” of others, no matter how reasoned their arguments. They are accused of countenancing “starvation wages”. This emotional stance blurs the argument whether people should, as a right, be allowed to work on terms based on their own subjective preferences according to their personal socioeconomic circumstances.

Stark choice Arguments in favour of minimum wage laws fall apart when confronted with the real needs of people who merely want to survive, let alone improve their lot in life. In countries where minimum wage laws exist a stark choice confronts the unemployed: starve or depend upon either the state or family. Most people prefer to work. For many, unemployment means the perpetual condemnation to misery in all its manifestations: low self-esteem, erosion of selfrespect, hopelessness, and the temptation to resort to crime. Despite these obvious consequences, a strange phenomenon persists. From the security and comfort of a fixed job some people ignore or pretend to ignore the visible misery of the unemployed but seem to be politically driven to indulge in populist rhetoric, stubbornly beating the drum of “decent pay for decent work”. Why are these self-appointed champions of the poor bent on exacerbating their plight by denying them any opportunity to alleviate it? Proponents of minimum wage laws and those who enact such iniquitous policies bear a heavy moral responsibility for restricting the growth of jobs and the resultant consequences. That responsibility includes the disintegration experienced by the providers and protectors of households, especially men, who, in some cases, resort to desperate actions in an effort to obtain some kind of sustenance for their families. Objectively speaking, the minimum wage law is

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Arguments in favour of minimum wage laws fall apart when confronted with the real needs of people who merely want to survive, let alone improve their lot in life.

tantamount to saying to the unemployed: we have made the choice for you – as we do not want you to be exploited, if you cannot get a job at or above the statutorily mandated minimum wage level, tough luck, it is better for you to remain unemployed. Keep starving.

From crisis to disaster If our onerous labour laws remain or even-more stringent ones are enacted, unemployment in SA will go from crisis to national disaster. Unemployment (already affecting 50% of our potential workforce and their dependents) is the fuse to a powder-keg that could explode at any time given the right trigger. In Tunisia, on 17 December 2010, a desperate Mohamed Bouazizi set himself alight. As a young, self-respecting, hardworking street vendor he had tried to make an honest living for himself and his family by operating a humble business but was constantly thwarted by the enforcement of irrational and insensitive laws. This tragic incident triggered a spontaneous revolution that spread throughout much of the Middle East and still continues. It is a mistake to place impediments in the way of people’s endeavours to make improvements to their lives. If their efforts to make an honest living are frustrated they may eventually feel justified in resorting to radical measures. Desperate people do desperate things when, to borrow the words of Thomas Hobbes, they know they can expect nothing more for their lives than to be “solitary, poor, nasty, brutish and short”. 

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The telematics industry has grown significantly in the past years due to the increased demand for advanced telemetry solutions that provide improved safety, increased efficiency and reduced expenses. The understanding is that the data derived from these assets through whatever telematics solution is used, needs to speak to stakeholders within a business, from operations to finance, and that data will speak to different areas of the business in different ways to help make informed decisions.

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As a leading global provider of connected fleet and mobile asset management solutions delivered as Software-as-a-Service (SaaS) to subscribers spanning more than 120 countries, MiX Telematics has successfully developed an extensive suite of fleet management solutions, with an understanding that each business has diverse needs.

MiX Vision AI, the next generation of video telematics One of the key solutions developed by MiX Telematics in the past year is AI powered technology as an enhancement to its current in-cab video solution – MiX Vision which was the first camera system launched nearly a decade ago. MiX Vision AI, the next generation of video telematics, includes an advanced dash camera with a built-in AI processor to detect risky driving behaviour, including distracted driving (like mobile phone use), fatigue, seatbelt usage, smoking, unsignalled lane departure, unsafe following distance, and advanced warning of an imminent forward collision. The AI Driving Coach provides drivers with real-time in-cab feedback on every trip, helping to improve driver behaviour and safety. Although MiX’s commercial fleet solutions are

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Staying abreast of the latest technological innovations In-cab, driver-facing AI dashcam detects risky driver behaviour and distracted driving which help prevent accidents.

built based on in-vehicle hardware, on-demand software services, as well as value-added services, accessories and applications that enhance overall vehicle performance. App-based asset tracking is another new advancement that enables fleet and driver management without the need for embedded hardware.

MyMiX Tracking app-based tracking solution using existing in-vehicle technology MyMiX Tracking, an app-based tracking solution using existing in-vehicle technology (cell phones, tablets, in vehicle connectivity, etc) leverages cell phone technology to provide a practical and costeffective option to expand management coverage to short-term vehicles or those not owned by the company. These two solutions have yielded another opportunity for MiX to introduce a technological solution that enhances road safety, driver management and vehicle monitoring. "The excellence of MiX Telematics’ products and services have been proven time and again by the numerous awards and commendations awarded to us over the years," says Gert Pretorius, Managing Director and CEO, MiX Telematics Africa. "MiX solutions embrace an integrated approach to telematics, delivering actionable intelligence to solve complex vehicle- and driver-related problems for the consumer and commercial vehicle markets, serving a wide range of industries, including transport & distribution, FMCG, oil & gas, mining, construction, emergency services, government, public transport, rental and leasing, security and utilities.".

Key to this success has been remaining abreast of the latest technological innovations, both locally and globally. In addition, MiX Telematics ensures that their technology is sufficiently robust for harsh African operating conditions, and its solutions are tried-and-tested for the international market. Technology will help businesses to achieve increased visibility on their fleets, optimum customer service levels, timely delivery and improved customer communication. This is where MiX Telematics steps in, as a reliable fleet management service provider that will help fleet managers and operators keep their operations moving forward with technology that will enhance their operation in the long run. “Newer technological developments and the evolution of the 5G network will serve as a catalyst for greater innovation. In comparison to 4G, 5G offers faster network speeds, increased capacity, and extremely low latency”, says Henry Smith, Fleet Sales Director for Africa. These features will translate into smoother Vehicle-to-Everything (V2X) communication, improved predictive analytics, and more innovative vehicle tracking and data collection on a fleet management level. This is in addition to solutions like MiX Vision AI and MyMiX Tracking, real-time notification about different activities. "With insightful reports and dashboards, fleet managers can identify inefficiencies in their operations related to safety and rectify them almost immediately”, Smith concludes.

MiX Telematics

T +27 (0)11 654 8000

E fleetsa@mixtelematics.com W www.mixtelematics.com

sabusinessintegrator.co.za 37

EDUCATION

Higher education’s

impact on SA’s economic wellbeing is dwindling As thousands of tertiary students across the country have embarked on the new academic year, research at the University of Stellenbosch Business School (USB) has found that the certificates and degrees they aim to earn may have little impact on South Africa’s economic performance.

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In contrast, the USB study found that schoolleavers with grade 8-11 have the most significant, “concretely positive” impact on economic growth, while those with matric, post-school certificates or degrees are “not significant drivers of national economic output”. Despite spending a greater proportion of the national budget on education than many developed countries,[i] and minimum education levels and matric pass rates steadily increasing since the advent of democracy,[ii] South Africa consistently falls in the bottom end of international

demands of the labour market contribute to South Africa’s economic and employment challenges,” he said.

rankings of education quality.[iii]

economy. He found that substantial progress in raising the minimum level of education of the South African population since 1994 has increased the employment prospects of individuals with matric certificates or matric plus a degree. However, these groups of better-educated people have not contributed significantly to raising economic output. He concludes that “higher education appears to have no significant economic value”. While improving an individual’s employability, there is no positive link between increased numbers of people holding post-school qualifications and national unemployment or increased economic growth. “Matric or a degree has individual value, increasing the person’s chances of employment but, as a group, the holders of these qualifications add little economic value,” he said.

Throwing money at SA's education problems does not work Minister of Finance, Enoch Godongwana announced increases to the basic and higher education allocations in the 2022/23 Budget recently – but, says the University of Stellenbosch Business School MBA graduate researcher, Pieter Bruwer: “Simply throwing money at South Africa's education problems does not work.” “The challenge for South Africa is not in the size of the budget allocation, but rather in the impact that results from the expenditure,” said Bruwer. Bruwer said the lack of impact of tertiary qualifications on economic growth highlighted that education policy aimed at closing the gap between skills supply and demand was not currently working in practice. “South Africa’s poor economic performance negatively affects employment, and rising unemployment in turn hampers economic growth, but one cannot discuss either without looking at the impact of education. The three are interdependent, and poor education is seen as being the root of many of South Africa’s problems, influencing continued inequality and the socioeconomic wellbeing of future generations. “The continued mismatch between skills supplied by the education system and the

Calculating the impact of education on the economy Through statistical analysis of 25 years of postapartheid data on education levels, unemployment rates and GDP, and correlating the links between them, Bruwer aimed to understand the workings of their interdependent, “triangular relationship” and to calculate the impact of education on the

South Africa’s poor economic performance negatively affects employment, and rising unemployment in turn hampers economic growth, but one cannot discuss either without looking at the impact of education.

sabusinessintegrator.co.za 39

EDUCATION

Quality of education not benefitting from budgetary allocations Education accounts for 20% of government spending,[iv] the second highest sector of expenditure behind general public services and debt repayments. South Africa’s spending on education as a percentage of GDP has consistently exceeded the UNESCO benchmark of a minimum of 4% since the late 1980s, reaching close to 7% by 2020.[v] But, says Bruwer, the quality of education “does not appear to be benefiting from its generous

country’s skills shortages with its stated aims to strengthen the Technical and Vocational Education and Training (TVET) sector and striving for closer collaboration between educators and employers to ensure that post-school education and training better meets labour market demands. “While it is gratifying to note that policymakers are attempting to address the skills mismatch and gaps in the current education system, this strategy is yet to bear fruit. It is questionable whether these policies are translating into

budgetary allocations”. “The research findings are a stark reminder of the poor quality of our education and highlight that education policy is not meeting the country’s needs to ignite economic growth and reduce unemployment,” he said. Education policy has attempted to address the

improved unemployment figures and better economic performance. “In order to address the needs of the struggling South African economy, education policy should be evaluated differently, as the current methods of judging it on pass rates are not bringing rewards,” Bruwer said.

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Improving post-school education alone not sufficient He emphasised that improving post-school education alone would not be enough to drive labour absorption and economic growth. “There are many dynamics at play – better alignment between skills supply and demand is but one aspect. As the economy shifts to the services sector, with demand for skilled and educated workers, there are fewer opportunities for youth and lower-skilled people in manufacturing and mining. Small-scale agriculture and the informal sector are not creating similar employment opportunities as they do in many other African countries. “We need a more diverse and favourable labour market, foreign direct investment policies that favour labour-intensive sectors, and a labour law environment more conducive to job creation,” Bruwer said. The loss of high-level skills and experience due to the increasing “brain drain” out of South Africa would also not be easily or quickly replaced by new graduates, he said, and it would take time to rebuild the skills to reverse this negative impact.

SA has done a good job of lowering the proportion of people with Grade 7 education or less The study confirmed that reducing the proportion of people with lower levels of education, as in primary school or no education at all, has a positive effect on economic growth. In that regard, South Africa has done a good job of lowering the proportion of people with

Grade 7 education or less to under 20%. This would increase the proportion of the population with at least grade 8-11, in turn contributing more significantly to the growth of the South African economy. The proportion of the population with at least a matric certificate has gradually increased from 20% in 1993 to 40% in 2019, while the proportion of adults with no schooling at all has shrunk to less than 3%. The research found that those with a Grade 12 certificate do not add more to economic growth than those who have left school after passing at least Grade 8 and up to Grade 11, although those with matric are more likely to be employed than those without.

An improved pass rate does not equate to improved cognitive abilities and skills of matriculants However, Bruwer said that lowered matric pass requirements since 2007 meant that an improved pass rate did not necessarily equate to improved cognitive abilities and skills of matriculants. “Literacy and maths skills are cemented in the grade 8-11 phase, and grade 12 is just a milestone of completion, not a sign of increased knowledge or skills. “Matric as a milestone of the secondary school system does not convert to economic value to society. It does give value to the individual in increased employability, but at the same time matriculants are competing for similar, unskilled work with people of lower levels of education,” he added. 

REFERENCES [i] Our World in Data. Education spending as a share of total government expenditure, 2019. Data source: UNESCO via World Bank. https://ourworldindata.org/ grapher/government-expenditure-education [ii] Pieter Burger Bruwer. Exploring the relationship between education, unemployment and economic growth in South Africa. MBA research dissertation. 2021. University of Stellenbosch Business School. [iii] Mlachila M, Moeletsi T. 2019. IMF Working Paper. Struggling to Make the Grade: A Review of the Causes and Consequences of the Weak Outcomes of South Africa’s Education System. https://www.imf.org/en/Publications/WP/Issues/2019/03/01/Struggling-to-Make-the-Grade-A-Review-of-the-Causes-and-Consequences-ofthe-Weak-Outcomes-of-46644 [iv] Stats SA. What does government spend money on? 2018/19 Financial statistics of government. 26 November 2020. http://www.statssa.gov.za/?p=13805 [v] The Global Economy. South Africa: Education spending, percent of GDP. Data source: UNESCO. https://www.theglobaleconomy.com/South-Africa/Education_ spending/

sabusinessintegrator.co.za 41

ADVERTORIAL: GAUTRAIN MANAGEMENT AGENCY

Gautrain Management Agency demonstrates how it exerts the shared value principles The Gautrain Management Agency (GMA)s vision is to provide an integrated, innovative and efficient public transport system that promotes sustainable socio-economic growth in Gauteng. GMA’s functions have been expanded to encompass other related projects and assist other organs of state to realise the integration and co-ordination of public transport within the region – essentially contributing to smart mobility. The Agency is committed to good governance, constantly striving to improve its governance framework by aligning it with leading practice such as the application of the King Codes. In ensuring that the Gautrain operates in a sustainable manner, the GMA has a clear commitment to governance and is in support of the GPG’s economic and social imperatives. As a government entity, the GMA plays a pivotal role in society and has shown the modernisation in public service and transformation of governance through the Gautrain. Through the Socio-Economic Development (SED) Charter of the Gautrain Project, the GMA contributes positively to the Gauteng society and economy.

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Driving economic growth and creating jobs Since inception the Gautrain Project has been breaking new ground to ensure that specific socio-economic development objectives are met. Gautrain has delivered a spectrum of jobs during its construction and operational phases. The SED deliverables directly demonstrate the benefits of the Gautrain in terms of amongst others, skills transfer and shareholding by black persons and women, in particular procurement, subcontracting and employment equity elements. Other than driving economic growth and creating jobs, the GMA continues to work towards economic, spatial and social transformation through the

ADVERTORIAL: GAUTRAIN MANAGEMENT AGENCY

modernisation of the public transport infrastructure and urban development through smart mobility. Part of the long-term growth plan is centred around building partnerships with taxi associations to create public transport channels to and from Gautrain stations. The GMA has partnerships with various taxi industries. It has midibus services available at Marlboro, Sandton, Centurion and Hatfield Stations, which are operated by a local taxi association. The midibus operations have proven successful in improving accessibility to public transport and integration of the Gautrain system

part of their strong community empowerment objectives, the programme reaches out to schools, universities, and research institutions to create programmes for the purpose of growing the field of engineering – particularly rail-related engineering. Through a partnership with the University of Stellenbosch’s Technology Research Activity Centre (TRAC) South Africa project, GMA supports science and technology education in a number of SA’s secondary schools across the country particularly in disadvantaged communities; by deploying mobile

with other public transport services. As a purpose-led organisation, the GMA hopes to, among others, contribute to business and social impact at scale, create an ecosystem that drives and supports the creation of inclusive societies and create inclusive growth with equitable opportunities for all.

science and technology laboratories. Realising that the sustainability of the Agency and the wellbeing of its communities are mutually dependent, the GMA launched a Graduate Programme targeted at exposing young graduates, in various fields, to practical and applied knowledge that already exists within the GMA. The programme aims to address any gaps at entry level employment opportunities and gives individuals a broad experience across different fields. GMA has successfully shown that it has always applied the shared value principles and aims to continue doing so. As part of the shared value community, the GMA believes in collaboration and partnerships to facilitate social change whilst providing a public transport service.

Sustainability and governance From a sustainability and governance perspective, the GMA has been operating a tight ship for the past decade, recently collecting a ninth clean audit from the Auditor-General, which is a major achievement. The Agency have also received a one-year certification as a top employer by the Top Employer Institute, while the Ethics Institute of South Africa applauded the Agency’s innovative use of smart technology through the creation of a smartphone app that helps to foster impeccable ethics management by providing an instant method of registering any gifts received from suppliers, clients and other stakeholders.

GMA supports science and technology education The GMA continues to play a leadership role in society through Social Investment Programmes (SIP). Educating and grooming future generations of engineers are some of the key priorities. As

T +27 (0)800 428 87246 l SMS 32693 W www.gma.gautrain.co.za

LinkedIn Gautrain Management Agency Twitter @TheGautrain

Facebook /gautrain l Instagram TheGautrain

sabusinessintegrator.co.za 43

DATA

Data is only gold if you know how to use it One of a company's most important assets is its data. Its primary function is to determine how well your business is doing, and it may also be used to indicate areas that require additional attention. However, is data utilisation truly that straightforward? Acquiring the data is the easy part; but data is complex and contains numerous moving pieces. There is also the question of data ownership and compliance. Have your consumers opted in? And then there's the matter of knowing what to do with the data. Because data is only valuable if one understands how to use it. When used properly, data can be a business's silver bullet. It can assist you in acquiring new consumers, enhancing customer service, increasing customer

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DATA

retention, tracking social media interactions, forecasting sales trends and more. In this article, we speak to industry experts and ask them to provide their thoughts on the value of data in today's business landscape.

Embracing data to improve business internally and externally Emmanuel Kalunga, Head of Data Science and Business Intelligence at OrderIn, says personalisation and the customer experience have become increasingly important over the past decade. With the rise of the on-demand environment calling for more intricate, instant and interactive customer experiences, organisations have now put data as it relates to consumers at the centre of their strategies. But as expectations continue to evolve, the use of data now requires that companies go beyond just having a list of names and addresses. Now, organisations must use data as a design target for every physical and virtual touchpoint – particularly as Artificial Intelligence (AI) infiltrates and aids internal operations as well. But using data is not a static activity that happens on an adhoc basis. An 'always analysing, always using, always learning' approach must be adopted if organisations are to remain at the pulse of a dynamic industry. For this purpose, Orderin has created and makes use of its AI-powered driver management platform, Jarvis, to assign and track orders and consistently improve its delivery efficiency. The fact is data will continue to take up more space in the boardroom. Looking forward, the industry must place more focus on smart automation and intelligence to create leading efficiency in service delivery.

The benefits of becoming data-driven Greg Gatherer, Account Manager at Liferay Africa, says many businesses struggle to develop a strong

data-driven culture and use data to inform their decision-making. While there are many challenges involved in making this shift internally, there are numerous benefits that will help make the effort and investment worthwhile. Gaining a better knowledge of customers with a single customer perspective, recognising broader trends through segmentation and visualisation of vital data, optimising user experience, and improving web performance based on page insights are all advantages of becoming data driven. With ever-increasing amounts of data, businesses have a great opportunity to glean insights and use them to make better decisions. Gaining a deeper understanding of consumer preferences and behaviour enables continuous improvement of the customer experience and overall satisfaction levels. By overcoming existing data silos and providing vital customised experiences, a digital experience platform can be best suited to integrate and unify disparate systems to serve the customer better.

Intelligent orchestration Brent Haumann, Managing Director of Striata, says orchestration, simply put, involves taking millions of data points and ordering them in a way that enables a specific, hyper-personalised experience. From the moment a customer interacts with your organisation, on whatever platform, the direction of each next step is determined by a set of criteria (imagine a tree branching off) that is unlikely to be the same for any two individuals. The end result is a truly individualised journey for each customer. Intelligent orchestration means the system improves its ability with each additional data point, and makes increasingly intelligent decisions. Across channels (call centre, social media, communication), the system makes a decision on the next best step to send the right message on the right channel, at the right time.

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DATA

It is able to do so because of artificial intelligence executing algorithms to make decisions based on masses of data.

Brands must have a strategy and a plan for data collection Shaune Jordaan, Hoorah Digital Founder and Chief Commercial Officer, says leveraging the true value of data in a responsible way requires a data strategy and plan. It’s only when data is associated with business value, operational efficiency and client retention, that it will enjoy the essential priority and investment necessary to drive measurable returns. This means having a data plan. That may well start with the collection of relevant data, but for ultimate success what’s needed over and above that is the creation of an organisational culture that understands and values the importance of that data in driving the business’s objectives. Crucially, it also includes respecting and protecting customer data. Applying the right kind of data, as with technology in general, has the potential to streamline operational efficiencies, and strengthen the quality of decision-making. When it comes to creativity in marketing, and advertising in particular, data takes the guesswork out of the equation.

Using data to improve all aspects of your business Jonathan Hurvitz, CEO of Teljoy, says data is a fundamental business resource and something that we rely on heavily to ensure that our offering to our customer is relevant and timely. But more than that, data needs to be understood and embraced by every function of the organisation as central to our digital capability and focus on evolving with the market. At Teljoy this means that data cannot (and is not) something that is confined to the IT department but is rather the bedrock on which all strategic

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and operational decisions are based – it’s a crucial business asset. As such, a key focus for us currently is to ensure all stakeholders in the business understand the role and value of data, including the responsible use thereof. It’s important to acknowledge that, while brimming with potential to solve business challenges, data in and of itself is not a silver bullet. It still relies on human input, analysis, creativity and lateral thinking to derive the right value from it.

How to use the data efficiently Pete Geyser, Head of PR and Marketing at Irvine Partners, says that to benefit from data, you need to understand how to use it. User data has evolved dramatically from the excel sheets of old filled with rows upon rows of names, mobile numbers and email addresses for the sales team to work through. Data collection assists with developing of buyer personas in order to develop higher converting sales funnels, create targeting marketing campaigns, A/B test landing pages, analyse the effectiveness of media channels in relation to revenue generated instead of just traffic to site. Data should be at the core of every decision made within a company wanting to scale and having people in your business that can not only read, but interpret the data is of paramount importance. Marketing, sales and even customer service and customer experience should all be optimised using both internal and external data where available.

Strategy is critical While data is critical for both large and small businesses, it is ineffective unless it is used. Businesses must have a data strategy in place to maximise their data's value. The data strategy should explain, among other things, how you want to use the data, what data you'll require, where you'll obtain it, and how you'll store it. 

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considering the growing number of connected Internet of Things devices within mining. When working with mission-critical systems and automated processes, a connectivity lapse could lead to revenue loss and, far worse, fatalities.

Crucially, the scalable Vodacom Business SD-WAN solution streamlines operations for enterprises managing multiple mines, enabling a secure operational view of all connected mines in one place. The enhanced application performance and improved network visibility this delivers is essential for organisations managing multiple datacentres, critical branch operations, and cloud environments.

Central device management is another drawcard, as SD-WAN enables the deployment

For remote-based mines, where it’s too expensive to deploy fibre or install carrier-grade multiprotocol label switching (MPLS) connections to a temporary location, SD-WAN is the cost-saving solution. It offers reliable, high-quality connectivity across all sites, including those in difficult to connect, hard-to-reach locations, by making use of affordable connectivity. SD-WAN boosts efficiency by managing bandwidth availability and usage, traffic routing, and prioritisation of business-critical protocols. It examines essential network traffic metrics, like latency, packet loss, jitter, and availability, using this data to respond proactively to realtime network conditions, selecting optimal paths for data packets. It’s a near-instant solution that can connect to wireless mediums like LTE/4G with a near zero-touch configuration, making it an attractive option for the mining sector’s timebound on-site operations. As for safety, SD-WAN’s traffic-prioritisation benefits are vital, especially

of new branch or datacentre provisions without the costly expert labour traditionally involved with network upgrades. SD-WAN also allows a mining company’s contractors to be securely linked into the business’s core network, improving business efficiency. Unlike other solutions, Vodacom Business SD-WAN is an overlay technology that can run on top of Broadband Internet and hybrid WANs, delivering improvements and cost savings no matter the network infrastructure already in place. Companies can link to multiple providers and let their software decide which is the fastest, most efficient link to perform specific tasks.

Change is here and, with it, new challenges and opportunities arise. How the mining industry chooses to move forward will determine their relevance and longevity in a world driven by technology. Vodacom Business is dedicated to helping the industry digitally transform for future-proofed success. For more information . search Vodacom Business SD-WAN to connect with us for more info.

THOUGHT LEADERSHIP

The Townships Project contributing to the

socio-economic development of SA The Townships Project aims to empower small business entrepreneurs based in townships across South Africa by providing them with the necessary skills to sustain and grow their businesses as they continue to be the key contributors to the socio-economic development in South Africa. By Judith Chinkumbi

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THOUGHT LEADERSHIP

There’s never been a greater time than today to transform South Africa’s economic narrative. In both the State of the Nation address and the budget speech, the country’s high unemployment and low labour absorption rate remains a key priority area for improvement. South Africa is currently experiencing its highest unemployment rate at 36.6%. The Covid-19 pandemic coupled with the rampant destruction caused by the July civil unrest has bred the prolonged stagnation in South Africa’s economic growth. The post-pandemic recovery plan has made no solid provisions to aid our jobless society. A stagnant economy cannot withstand the pressures of a growing population. The years 2021/2022 can be coined as South Africa’s ‘bounce-back’ phase. In order to revert to longterm growth, a different approach is needed. In the past year, South Africa has redeemed itself by expanding economically by more than 4%. What is needed to further this positive, optimistic streak is a refined approach to economic recovery.

Focus should be on improving job creation as a stimulator of economic growth The South African economy lacks flexibility in a sense that it does not have the room to explore different solutions or the luxury of being able to readily bounce back from error. This risk perception is very telling and indicative of South Africa being a country in need of a fundamental shift. The central focus should be on improving what is known to work, that is job creation as a stimulator of economic growth. South Africa’s socio-economic stability is highly reliant on job prosperity. The interventions of job prosperity should not only be conferred to private-sector investment. Job creation also arises from entrepreneurship. South Africans need the correct knowledge capital to create and

innovate businesses that will create jobs to foster economic growth. Entrepreneurship will have an impactful change in the direction of the South African economy. It is no illusion that additional jobs will create a more sustainable economy. There is an urgent need to specifically target the areas that require urgent interventions such as townships that are sprawled across the country. Part of the answer to joblessness is broadening the tax base by ensuring that the right support is provided to township entrepreneurs.

2.2 million decrease in employment countrywide There are 532 South Africa’s townships currently, with 21.7 million people spread across the many of which are living under impoverished circumstances. The Covid-19 pandemic has only exacerbated these conditions. During the period between February – June 2020, there was a 2.2 million decrease in employment countrywide. It is inevitable that township dwellers were hit the hardest through this. The social relief distress grants were created to aid South Africans who are unable to meet their basic needs due to the pandemic. Although it is a temporary feature, the R350 grants have been pivotal in retaining stability within the township economy. The health of township economies is contingent on public participation. People in townships need to have the financial muscle to be active economic participants that will keep the economic cycle flowing. Informal businesses are multifaceted within township economies, they operate from a multitude of industries that offer different goods and services. Contrary to surface-level misconception of townships economies being the general functioning of retail, the spaza shops, fast food outlets and taverns, township economies also have additional businesses such

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THOUGHT LEADERSHIP

as property rentals, childcare services, transport and hair salons amongst others. They may not contribute formally through taxes, but they provide livelihoods, employment and incomes. Informal businesses are lifelines for families that lack formal employment; they keep families from living below the poverty line.

Important to equip township entrepreneurs with knowledge capital The development of these township economic industries is highly reliant on upcoming entrepreneurs and their small businesses. It is therefore of utmost importance to equip township entrepreneurs with knowledge capital so they develop and innovate businesses that will create employment. In the ecosystem and functioning of the South African economy, entrepreneurship will have impactful changes in the direction of the economy. It is no illusion that additional jobs will create a more sustainable economy. South African townships are hubs of entrepreneurial activity. There is great potential The Township Project helps entrepreneurs to thrive waiting to be unearthed The South African government needs to assume an authoritarian in these communities. If role in regulating the functioning of micro-businesses in townships. presented with opportunities Organisations such as The Townships Project (TTP) exist as a for funding, education and facilitator to ensure entrepreneurs are at their best capabilities to networking, South African ensure their success. Township entrepreneurs should also be used entrepreneurs would greatly as a key contributor in policy-making frameworks. excel in creating sustainable The year 2022 is no different for TTP, which will continue to heed township economies. the call and aid entrepreneurs in thriving with their small businesses. Governments and TTP acknowledges the importance and relevance of entrepreneurs entrepreneurs are running the in boosting the local economy. same race, they just need to This year, through the Building Better Businesses Symposium, hold hands. Both parties share TTP will once again provide small business owners with the best a common goal of achieving tools of trade to keep them resolute and resilient. The Building economic development and Better Businesses Symposium is designed to address the specific social emancipation. needs of township entrepreneurs and showcases the force for good that social entrepreneurship brings to township economies.  www.thetownshipsproject.org.za

52 sabusinessintegrator.co.za

ADVERTORIAL: SPARKLING DIAMOND

Sparkling (like a) Diamond –

Locally manufactured household & commercial cleaning products Sparkling Diamond, a household and commercial cleaning brand launched in 2021 by PhD candidate and mother of two, Basetsana Taku, is expanding fast. Sparkling Diamond’s range consists of quality and affordable products that are locally made. In less than a year the company has sold thousands of products to many South African homes, established a solid reseller model for entrepreneurs who are mostly women, and is in the process of listing with some of the major retailers in SA. Sparkling Diamond is a Level 1 BBBEE contributor and is 100% black women-owned with over 10 registered resellers in Johannesburg, Polokwane, Mafikeng, Pretoria and Rustenburg. The brand is also keen to partner with more corporates who supports small businesses, especially womenowned businesses.

Top 3 products to ensure a safe and germfree environment

1. Germend thick bleach: This is a bleach-based liquid disinfectant and bactericide. Germend is suitable mainly for household and occupational cleaning when thicker bleach is required for better contact and improved disinfection. It can be used to disinfect bathrooms and kitchen surfaces, clean toilets and sanitise floors, cleaning garbage bins

and eliminate litter box odour, and clean drain or waste pipes. 2. Urocid toilet bowl cleaner: Urocid is an acidic cleaner containing wetting agents and penetrants for cleaning porcelain toilet bowls. It can be used to restore the white on porcelain toilet bowls, and remove rust stains and uric acid deposit from urinals and toilet bowls. 3. Prochlor bathroom and shower disinfectant: This is a highly concentrated multi-purpose alkaline liquid spray with active chlorine formulated to deep clean and kill 99.9% germs. It can also be used to remove mould, grime and soap scum from bathroom floors and shower tiles.

Sparkling Diamond T +27 (0)82 849 3224

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sabusinessintegrator.co.za 53

PROPERTY

Turning property into

prosperity in 2022

While South Africa’s property market has been sluggish over the past five years, it is starting to show encouraging signs of improvement, says Bheki Vilakazi, Managing Director of SVA International, a subsidiary of the GIBB Group of companies.

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PROPERTY

Currently classified under financial and business services, according to the 2021 Property Sector Charter Council (PSCC) report, the financial, real estate and business services sectors accounted for 22% of the country's real value added, generated by producing goods and services. “In South Africa, according to a PSCC study, the SA property market contributes R5.8 trillion, thus significantly contributing to GDP. A 2018 South African Reserve bank (SARB) report also estimated that SA’s total fixed capital stock is worth R7.6 trillion. This means that property

shopping centres and reduced need for retail space. Retail property made something of a comeback in 2021, however, and its total returns last year likely outperformed those of office property but underperformed those of industrial property. In a financially constrained consumer environment, however, retail centres could focus more on high-frequency essentials, and less on luxuries and low-frequency purchases. The industrial property market remains the relative outperformer of the major commercial property classes and is expected to continue

accounts for 76% of SA capital stock outside of machinery and transport,” says Vilakazi. While these are positive figures, the property market has suffered significant losses. There are, however, likely to be improvements in 2022, from commercial to residential property, with industrial showing the most promise.

its positive performance. This is amplified by an increased demand for warehousing space, due to the online shopping surge. The Residential Rental Market experienced a very weak period in recent years, but 2022 is expected to see some strengthening. A mild recovery in the residential rental market is expected in 2022, due to the expectation of further moderate interest rate hiking. With a greater portion of tenants’ income restored following the 2020 lockdown income shock, new household formation in the rental market may be ready to pick up some speed. It is therefore expected that there will be a mini surge in residential building activity.

Navigating the challenges and celebrating the wins The economy is expected to improve from 2022 onwards, compared to where it was in 2020. The actual average capital values on commercial property will at least halt their decline of recent years, moving back into very low single-digit positive figures in 2022. The hotel industry took a big hit in 2020 and 2021. Travel bans due to lockdown restrictions reduced the number of local travelers as well as visitors to the country, which dealt a hefty blow to the leisure and hospitality property sector. This, however, is expected to improve in 2022, with increased hotel occupancy levels. In terms of office space, while occupancy dropped during lockdown and has continued to be low, many workers are expected to return to their offices this year; however, numbers are unlikely to return to those seen before lockdown. In the retail sector, a significant increase in online shopping has led to reduced footfall in

Trends in the property market “The need for student accommodation has been brought to the fore and is an opportunity that SVA will focus on. It is estimated that the shortage of student accommodation is between 200 000 to 250 000 units nationally,” says Vilakazi. Naturally, with annual increases in student enrolments, coupled with slow delivery in construction of student accommodation over the years, the trend for increased requirement of student accommodation will continue unabated. If this trend is not urgently addressed, it could lead to protests. Social housing also needs urgent attention.

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PROPERTY

The Social Housing Regulatory Authority (SHRA) has a 2019 to 2024 target of delivering 30 000 units during this period. “To date, they have not been able to achieve these targets and the non-delivery trend emanates from constraints outside their control, for example and per SHRA`s conditions for grant approvals, lack of properly zoned land in Government Restructuring zones, lack of bulk services and technical skills from some would-be grant recipients, as well as the need for municipal and provincial approvals,” Vilakazi adds.

Why is property still a good investment? At an individual level, aside from the basic need for shelter, owning property is always a good investment as it means that the purchaser is paying towards something that they will eventually own and be able to resell, usually at a profit. “Property is considered a wealth creator and enables the property owner to leave a lasting legacy,” says Vilakazi. At a business level, property is a basic requirement for businesses to have operational space. Although technology is fast reducing the need for physical space, not all businesses can run

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solely online and many people still prefer to work from offices. Eskom challenges associated with loadshedding compel employees to work from offices as most businesses have electrical generators; hence, at a business level, property is a basic requirement. The Call Centre industry is a typical example of operations that require employees to be office-based. Sporadic electricity supply in some African countries also compels staff to go into the office, leading to the basic business requirement of property. In conclusion, although the property market has experienced its fair share of ups and downs over the past two years, and growth is not happening at record speeds, the improvements in the sector are promising and investing is still a viable option. While challenges still face the industry, new opportunities have emerged for property companies, businesses and individuals to take advantage of. 

Logistics Software soloplan.co.za

PAPER EVERYWHERE? It doesn't have to be this way. Our TMS CarLo® manages all relevant freight documents completely digitally.

Product video:

www.soloplan.com/carlo Soloplan SA (Pty) Ltd Software for logistics and planning · 47 Landmarks Ave · Pretoria · 0157 · South Africa · Phone +27 8718314 60 · info@soloplan.co.za

BECOME PART OF OUR INTERNATIONAL TEAM Soloplan is an international company with its head office based in Germany, we pride ourselves in being the market leaders in transport management systems with over 1 500 Customers worldwide and 30 000 active users. The group has over 250 talented employees who are continuously developing and enhancing our premium software product CarLo®. Our South African branch is growing and looking for talented individuals to join the team in the following roles:

Application and Implementation Support Consultant [m|f |d] Front End Web Developer [m|f |d]

Visit our website at soloplan.com/careers to see what these exciting roles entail or alternatively e-mail us at topjobs@soloplan.de and we will contact you

PROFILE

Soloplan –

creating solutions for the entire world of logistics

Together with international partners, 250 Soloplan employees at seven locations support about 1 500 customers with 30 000 users located all over the world. The premium software CarLo® helps to handle daily transport and logistics tasks, covering tour planning, optimisation, telematics, warehouse management, transport platforms and fleet management.

Soloplan is a family-owned business that provides superior quality software and is one of the leading German logistics software companies. More than 30 years' experience in the logistics and IT sector and the integration of best practices accrued from customers worldwide, make the software a profitable business solution. The CarLo® product family is an all-in-one-solution for completing the most diverse tasks in logistics. The flexible setup with modules ensures that the products are perfectly compatible with each other and reduce the effort required for implementation.

Customers trust Soloplan Soloplan is an expert in the transport sector and knows exactly what customers expect from logistics software. This is why so many forwarding, transport and logistics companies worldwide trust us as their long-term partner. “Out of 43 transport management systems worldwide, we chose the logistics software CarLo® – and that was definitely the right choice. Now we

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can finally integrate all processes from order entry to route planning to calculation and an extensive evaluation within one platform,” says customer, Unitrans Supply Chain Solutions (Pty) Ltd. “Local service providers could not assist us with meeting our expectations and requirements. We then decided to choose one of the leading management systems offering a wide bouquet of service offerings. Soloplan really went the extra mile to comprehend our system requirements and used their specialised capabilities to develop the tools we needed to exceed the technological benchmark set in our industry,” says another customer, Reef

PROFILE

Tankers (Pty) Ltd. With the logistics software CarLo®, all transport sectors and their individual requirements can be served – no matter whether you are dealing with bulk goods, intermodal transports or the classic use of the partial and full-load sector. Users from a wide range of industries can work comfortably with the software, regardless of whether multi-user; branch or group solutions are desired.

State-of-the-art technology creates competitive advantages for users In the development of the software, Soloplan focusses on functionality, flexibility and userfriendliness. The modern design is based on the look of the latest Microsoft Office products to provide a quick start and intuitive user guidance. Company and user-specific adaptations can be individually implemented via the freely designable interface. As an innovator, Soloplan already focusses on tomorrow's ideas and concepts at an early stage, which is why machine learning and AI have already been in use in CarLo® for many years. The advantages of those technologies for transport planning include saving the operations team a lot of time, helping avoid mistakes and increasing efficiency. Furthermore, knowledge is no longer lost in the case of personnel changes because the transport management system learns the required behaviour based on historical data. One of the newest highlights of AI in the transport management system, CarLo® is the prediction of delays or of the reliability of drivers and subcontractors. Also, the provision of tour suggestions based on experience and planning behaviour is possible.

A thriving branch in South Africa Over the last couple of years, the Soloplan South Africa team, led by Regional Director Jill TrösserOrdóñez, alongside CEO International Fabian Heidl

and Group CEO Wolfgang Heidl, has succeeded in more than doubling the client portfolio in the region. This again confirms the local market’s interest in the industry-leading TMS CarLo® and gives a positive outlook for the future. Soloplan has also successfully led the second expansion of the South African branch despite the widespread impact of the global pandemic. Thus, Soloplan is proud to be in the position to provide further employment opportunities for the local branch office through continuous and steady growth patterns.

Soloplan in the future To keep up with the company's steady growth, Soloplan is constantly looking for new, innovative team players who want to continuously develop and break new ground. Both skilled specialists and professionals from the industry work at Soloplan, which is the perfect combination. Their different educational backgrounds allow Soloplan to provide powerful software solutions and high-quality services. To maintain and increase the level of quality in the future, Soloplan's staff management strategy encourages employees to participate in further training and to gain additional qualifications. Training sessions, seminars, specialist conferences and the internal distribution and storage of information ensure a broad and sustainable level of knowledge.

T +27 (0)871 831 460 E info@soloplan.co.za W www.soloplan.com

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DIGITAL MARKETING

Five digital

marketing trends

The good news is the digital marketing revolution is far from over and it’s providing new and exciting opportunities for marketing professionals to raise brand awareness and expand market share.

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DIGITAL MARKETING

Last year's important trend, personalisation, continues to be relevant as customers demand that their brands understand them better. “Various personalisation strategies help marketers enhance customer experiences and build brand loyalty by establishing strong relationships. Customers will trust brands that have their best interests in mind, especially when it comes to product recommendations,” says Desirée Gullan, co-founder and Executive Creative Director of G&G Digital. When marketers combine personalisation with

3. Green marketing

innovative digital marketing tools and tactics, they can achieve their goals and better connect with their target audience, building loyalty over the long term. The following five trends should shape your 2022 marketing strategy and help your brand and business thrive.

dietary and diverse body types. You don't need to cater to every possible demographic in one campaign, but your customers should be able to relate, and importantly, know that their brands of choice are inclusive.

1. Conversational marketing

Social commerce and online shopping have changed the way people browse, shop, review and recommend. Make this process easy, intuitive and with the least obstacles. Ensure your customers can make purchases or enquiries directly through social posts or connected TVs. And don’t forget, the power of storytelling and customer recommendations to convert. “There’s a myriad of ways of bolstering your personalised marketing with smart digital tactics,” says Gullan, “and you don’t need to use them all at once. Look at your strategy, understand your customers, identify the most relevant channels and innovative tools and content to better engage with them. The best part about digital is you can trial, measure, and optimise, one channel at a time.” Customers will identify with your brand if they see you're authentic and when they see themselves reflected in your marketing. Your business and brand can thrive and remain competitive when you understand your customers and converse with them in ways that resonate. 

The days of waiting 24 hours for a reply from a brand are long gone. Consumers want a response, and they want it now, on their preferred platforms, times and in a tone of voice they can relate to. Conversational marketing sets out to connect via chats, text, personalised videos, and emails, all with the intention of putting the individual consumer at the centre and enhancing their experience.

2. Video marketing Video isn't optional. A Wyzowl survey shows that 84% of customers buy products or services after watching a video. More than five billion videos are watched on YouTube every day, and other social media platforms are following this strategy. To get more eyeballs on your videos, produce content that your customers want to see, that adds value and makes use of live broadcasts on Instagram or Facebook to drive higher engagement. Repurpose video content for blogs, podcasts, and other channels.

Climate change is a major concern, and customers will select brands that are committed to looking after the planet. Ninety percent of millennials say they’ll spend more money on sustainable and environmentally conscious brands. And for once, Gen Z’s are agreeing with millennials.

4. Inclusivity and diversity Marketing campaigns should reflect real people across age, race, ethnicity, gender, language, socioeconomic status, health, disabilities, religion,

5. Shoppable content

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METALS & ENGINEERING

Government needs to support the metal & engineering sector What are the tangible solutions that the metal and engineering sector can use to tackle declining production, weak production sales and increasing unemployment? Lucio Trentini, CEO of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) gives SA BUSINESS INTEGRATOR his view. How can we to tackle declining production, weak production sales and increasing joblessness in the sector? The fortunes of the metals and engineering (M&E) sector are tied to GDP growth. Therefore, higher rates of GDP have a natural positive implication for the metals and engineering sector and the reverse is true where weak economic fundamentals persist. One important avenue to sustainably grow a country and enhance the GDP performance is increasing gross fixed capital formation or investment. For this reason, the various infrastructure investment plans that the government has put in place must be implemented. The fastest growing economies have tended to target an investment to GDP ratio of 20%-30%, however in 2021, South Africa’s investment to GDP was recorded at 12.5%. A concerted effort to increase this ratio is paramount if the fortunes of the economy, and in turn the metals and engineering sector, are going to improve. The reform of state-owned enterprises (SOEs) is also crucial. This reform should entail bringing private sector participation in the areas currently

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serviced by state owned entities. The monopolistic market structures that have manifested in the industries serviced by state owned entities have resulted in major inefficiencies, a deterioration of the service and increases to the cost of the service. Combined these outcomes have resulted in an increase to the cost of doing business and a lack of service delivery.

Highlight the critical importance of the M&E sector for social development in SA. The sector directly employs 397 586 people and working on the traditional employment multiplier of 1.6 people for most industrial sectors, the M&E sector indirectly employs a further 657 896. Further, considering South Africa’s dependency ratio of 6 to 10 people per job, considerably expands the sectors socio-economic impact.

What can be done to lower local production costs? The fundamental objective and agenda of the policy makers across the board should be how to make South African companies globally competitive. This

METALS & ENGINEERING

will naturally place them in the position to compete with imported products. Part of the policy toolset should include dedicated industrial incentives, considerations on further reducing tax rates (the laffer curve theory would also accrue to the state), allowing private participation in the provision of public utility services to reduce the cost and widen the access of electricity, transport, water, broad band and provision of general infrastructure. Adopting market friendly policies will also reduce South Africa’s risk premium which will have positive implications for the cost of finance and eliminate the punitive

On localisation specifically: State-owned entities such as Transnet purchase significant quantities of steel products, such as rail. Transnet has committed to reviewing their requirements and to work with local industry on building local supply chains for large-scale projects and consumables. Commitment to promote localisation is set-out in the Nedlac Economic Recovery Plan covering the 2021 implementation of the localisation commitments made by social partners on identified value-chains, including steel-intensive products for construction, tools and implements, household

discount applied to South African based companies. Another important aspect to consider is the fact that the Covid-19 pandemic has exposed the risks associated with lengthily supply chains and a general revision to the globalisation theory. Companies that typically relied on global value chains to source products found themselves exposed when economies and supply chains were closed to prevent the spread of the virus. Therefore, this debate now more than ever needs to be broadened beyond the import or export paradigm to also include risk management.

goods, capital equipment, transport auto, rolling stock and railway lines, based on a set of targets; a set of products and champions at CEO level to drive the various workstreams.

In terms of investment, what is the greatest hindrance? Legislation is a huge factor in deterring investment. Also, a lackluster approach to implementing economic reforms in many areas of the economy from energy to transport, all of which directly and indirectly affect the M&E sector.

What is needed for SA to become a preferred supplier to both domestic and international markets? Quality of product along with pricing will make local products competitive. Based on trade data, South Africa continued to have a favourable net trade balance with the African region in the M&E sector. South Africa’s local producers have more opportunities to increase their market footprint on the continent, especially by taking advantage of the African Continental Free Trade Area agreement which took effect on 1 January 2021. 

Government has a number of Master Plans and a localisation policy – are these realistic in terms of implementation, resources, skills, funding etc.? Ultimately, it is important that these plans are on the table. They allow for debate and a consultative approach to charting a way forward for an industry. The problem that continues to bedevil South Africa is implementation of the plans.

Lucio Trentini: CEO, SIEFSA

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“Through FutureSmart Mining™, we are finding new ways to make mining safer, more efficient, more sustainable, more harmonised with the needs of host communities, and with a smaller environmental footprint.” - Mark Cutifani, Chief Executive of Anglo American

Together, we are shaping a better future. #ShapingTogether Imagine a future where new innovations are making mining smarter - one where you barely notice mines at all. At Anglo American, FutureSmart Mining™ is our solution, helping to build a cleaner, greener, more productive and sustainable world. Clean energy operations are being designed for the good of our planet and its people. Intelligent mines are being created through the use of digitalisation, sensors and artificial intelligence, while robotics and remotely operated machinery is helping to keep our employees out of harm’s way. We are unlocking South Africa’s growth and development potential by making mining smarter, more innovative and sustainable for current and future generations.

Together, we are shaping a better future.

Scan here to learn more

MINING SECTOR

SPECIAL FOCUS:

LEAD FEATURE: ANGLO AMERICAN

nuGen™

– Anglo American’s zero emission haulage solution

Anglo American: Installation of the power module, designed and built by the technical team, into the 290-tonne capacity hydrogen heavy haul hybrid truck being built at the Mogalakwena PGMs mine. This unique, fuel-cell and battery-powered truck is set to enter service in 2022, and be the forerunner of a fleet of such trucks at Anglo American’s operations by 2030.

LEAD FEATURE: ANGLO AMERICAN

Anglo American’s purpose is to re-imagine mining to improve people’s lives. This is how the company sees its role in society, and how it measures success. The company has long shown itself as a leader across many fields and such leadership is called for again as society changes with and around it. Mining must play its part to address the environmental challenges of a carbon-constrained world and society’s wider expectations of Anglo American as enablers of change, while it continues to meet the ever-growing demand for its products – and to do so responsibly.

FutureSmart Mining™ transforming the nature of mining The company's FutureSmart Mining™ programme – technology, digitalisation and sustainability working hand-in-hand – is developing and implementing step-change innovations that are transforming the very nature of mining – its physical and societal footprint – and how its stakeholders experience Anglo American. The company is working towards a world where its

mines are integrated, automated, carbon neutral, and use far less water – towards a safer, smarter, more sustainable future. The Sustainable Mining Plan “healthy environment” goals include a commitment to be carbon neutral across all Anglo American operations by 2040 (i.e. Scope 1 and 2 emissions). Anglo American also aims to achieve a 30% improvement in energy efficiency, and an absolute 30% reduction in operational greenhouse gas emissions by 2030. Anglo American's large mining haul trucks currently account for up to 80% of diesel consumption on-site. It became evident that in order to meet its ambitious climate commitments, it needed to develop a zero-emission solution to one of the most difficult to abate applications in the world.

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LEAD FEATURE: ANGLO AMERICAN

Integrated green hydrogen production, fuelling and haulage system for mine sites Anglo American thus analysed its mine site power requirements, coupled with its diesel consumption, and have applied a regional ecosystem decarbonisation approach to how it looks at renewable energy systems and their benefits. As a result, the company identified an energy mix that allows it to be carbon neutral and have a very different footprint – enabling an end-to-end integrated green hydrogen production, fuelling and haulage system for mine sites – the nuGen™ Zero Emission Haulage Solution (ZEHS) project. As a pilot of this ambitious project, the company will unveil a hydrogen/battery hybrid haul truck at its Mogalakwena mine in Limpopo – the first time a truck of this size and load capacity has been converted to run on hydrogen. The gas will

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also, in the near future, be produced on-site using renewable power. A unique challenge requires teamwork and Anglo American knew it would benefit from the help of others. Across its business, it recognises the importance of working with specialist partners to support its technology and sustainability goals. This partnership approach is at the heart of FutureSmart Mining™. For the nuGen™ project, Anglo American have worked with some of the world’s leading creative engineering and technology companies, such as Engie, First Mode, Ballard and NPROXX, to develop the proof of concept. This ambitious project marks the first time a 220 ton truck with a 290 ton payload will be converted to run on hydrogen. The truck is a 2MW fuel cellbattery hybrid as it is the best available technology combination for this specific use case. A hydrogen fuel cell will provide roughly half of the power

LEAD FEATURE: ANGLO AMERICAN

and a battery pack the other half, allowing Anglo American to recover energy during braking events.

nuGenTM ZEHS project to be deployed at Anglo American open pit sites By 2030, Anglo American aims to continue the deployment of the nuGenTM ZEHS project across its open pit sites, converting all its diesel-powered ultra-class mine haul trucks at these sites to green hydrogen. In addition, the company is exploring switching smaller heavy-duty vehicles and light duty vehicles to hydrogen and fuel cell technology. The technologies and capabilities that Anglo American is developing provide opportunities to go beyond direct mining and haulage applications. Its nuGen™ project team has also partnered with Aurizon, Australia’s largest rail freight operator, to study the potential in its business, with a goal of building a prototype locomotive in 2023. This project offers a zero emission solution to the heavyduty transport sector, going far beyond Anglo American's own haul truck fleet.

Innovative, clean and independent power system Across the entire mining industry, Anglo American knows it must play its part in the transition to a low carbon economy, both through the essential metals and minerals it produces, and how it produces them. Innovative, clean and independent power systems, such as the nuGen™ ZEHS project, offer a significant part of the emissions solution. Aligned with Anglo American’s Purpose, the company recognises that its own resilience to climate change is not enough. It also has a role in supporting its host communities to thrive in the transition to a low carbon world. The company continues to explore what mining can do to help ensure a ‘Just Transition’ – one that considers the impacts of this change on employees and communities. Anglo American’s support for the creation of a

regional renewable energy ecosystem for its host countries, facilitated by projects like nuGen™, not only contributes towards decarbonising its own business but also serves as a catalyst to support countries’ own overall decarbonisation journeys and ambitions for a Just Transition.

Will expand to build green hydrogen ‘clusters’ to export hydrogen and oxygen nuGen™ is initially focused on decarbonising mine haulage and building onsite hydrogen production. It will then expand to build green hydrogen ‘clusters’ to export hydrogen and oxygen to offsite applications, thereby accelerating decarbonisation around its operations and developing opportunities for new businesses and jobs locally, as well as in the new supply chains this will create. A recent study, spearheaded by South Africa’s Department of Science and Innovation, found that establishing a “hydrogen valley” anchored in the platinum group metals-rich Bushveld geological area in South Africa could add more than $3.8 billion to South Africa’s GDP by 2050, while creating more than 14 000 jobs per year. Anglo American believes that the provision of new sources of clean and reliable energy could provide a stimulus for wider socio-economic benefits for businesses and communities across many host countries – supporting long-term, sustainable economic growth. 

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ENVIRONMENTAL STEWARDSHIP

Embarking on the 2050 carbon neutrality through decarbonisation of the mining sector There is a common misconception that the mining sector cannot conduct environmental stewardship, but Exxaro has proven otherwise, argues Abel Sakhau, Environment and Climate Change Manager.

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ENVIRONMENTAL STEWARDSHIP

Climate change is undoubtedly one of the defining global challenges of our generation. It is disrupting national economies, weather patterns are becoming extreme and livelihoods, especially of the most vulnerable, are threatened. We are experiencing a growing trend where investment community and banking institutions are reviewing their financial support for fossil fuel assets. Through their Nationally Determined Contribution (NDCs), governments are committing to reducing global greenhouse gas emissions to limit the temperature increase to well below 2°C, preferably to 1.5°C by 2030. The Covid-19 pandemic may have stalled national plans to tackle climate change and reduce emissions. As such, the COP26 summit in Glasgow 2021 brought parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.

The global economy needs to shift to low carbon technologies To deliver on the Paris Agreement, the global economy needs to shift to low carbon technologies in the mining, energy, transportation and agricultural sectors. Companies, banks, insurers, and investors must adjust their investment strategies and business models to develop and implement credible plans to transition to a net-zero carbon economy. The mining sector has been facing pressure from governments, investors, and society to reduce carbon emissions as the world moves towards a low carbon future. Renewable energy is becoming an inexpensive source of electricity; many of the world's carmakers are shifting to make only electric and hybrid models; countries around the world are starting important work to protect and restore biodiversity; cities, states and regions around the globe are also committing to the net-zero emissions target by 2050.

The mining sector has been facing pressure from governments, investors, and society to reduce carbon emissions as the world moves towards a low carbon future.

According to data from McKinsey, mining is cited as being responsible for 4% to 7% of scope 1 and 2 greenhouse gas (GHG) emissions globally. The mining industry is energyintensive, using diesel and fossil fuel-generated electricity to drive scope 1 and 2 emissions. Decarbonisation of the power sector and diesel mobile mining vehicles presents the mining sector with an opportunity to meet the net-zero target by 2050. In 2017 South Africa had one of the most emissions-intensive power sectors, ranked 25 globally, and is therefore particularly vulnerable to the transitional risks of climate change.

Exxaro has embraced the need to decarbonise and build resilience to the impact of climate change Exxaro has embraced the need to transition its business model and decarbonise and build resilience to the impact of climate change. The organisation believe a "Just Energy Transition" for South Africa must address present and historical inequality, create jobs, reduce poverty, restore biodiversity and build resilience against physical risks of climate change, and most importantly, ensure that no one is left behind. Exxaro's Climate Change Response Strategy is integral to its Sustainable Growth and Impact Strategy aligned to the relevant UN Sustainable Development Goals and designed to ensure it can manage the direct and indirect climate

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ENVIRONMENTAL STEWARDSHIP

change impacts on its current portfolio while ensuring it can contribute to the low-carbon environment of the future. The business has been in transition from as early as 2012 with the formation of Cennergi. Cennergi is a wholly owned renewable energy subsidiary that operates two wind farms in the Eastern Cape that contribute 239 megawatts into the national grid. Cennergi is also developing the 70MW Lephalale Solar Project to supply renewable energy to the Grootegeluk Complex in Limpopo.

Focused on ensuring an optimal portfolio to deliver on its purpose Exxaro also remains focused on ensuring an optimal portfolio to deliver on its purpose — powering better lives in Africa and beyond. This focus required tough calls on its assets to extract the maximum value from these investments efficiently. Its portfolio must be resilient against physical and transitional climate change risks while leveraging opportunities presented by the transition. There is a common misconception that the mining sector cannot coexist with environmental

Foundational elements of Exxaro's decarbonisation plan geared to empower all its employees Our transition is intentional and anchored on the "Just Transition" principle, which seeks to balance our business financial performance, South Africa's economic development needs, environmental stewardship and societal adaptive capacity in the face of changing climate. Exxaro recognises the numerous benefits associated with diversifying and adopting a value chain approach to climate change adaptation and resilience building, especially given that the negative impacts of climate change are not only limited to its business's operating space. The foundational elements of Exxaro's decarbonisation plan are geared towards empowering all our employees, including contractors. The organisation does not drive decarbonisation; employees are at the centre of decarbonisation activities. In the process, Exxaro has mobilised practical ideas for job creation linked to the areas where they are located and provided collective support to small and medium-sized businesses, especially those operating in rural and township areas. Sixty-six entities, of which 44% are 100% black-owned and 26% women-owned, are supported by Exxaro, which has also started engagements regarding SMME opportunities and development in relation to decarbonisation.

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stewardship, but we have proven otherwise. Guided by environmental sustainability practices and our vision of "Resources Powering a Clean World', we have strengthened our organisational resilience while protecting the future of our environment. This stewardship will translate into future mining opportunities for sustainable growth. 

Flourishing Oil and Minerals is a reliable black-owned South African based commodity trading company that boasts over 10 years in the commodity industry.

We have excellent relationships with both local and international mining and agricultural companies and can therefore guarantee you competitive prices and efficient delivery. Some of the main commodities that we deal with include copper cathode, coal, chrome, gold (doré bars, a semi-pure alloy of gold), different types of oil, sugar, and a variety of grains, including corn and soy beans. Our prices are market related, our procedures are simple and our payment terms are effective. We are dedicated to our clients and suppliers – with us there is complete openness, honesty and transparency, ensuring your peace of mind. For more information, contact:

+27 (0)21 524 1975

www.flourishingminerals.com

Relebohile Joyce Moreboli, Chief Executive Officer – joyce@flourishingminerals.com Rowland Chimezie, Managing Director – rowland@flourishingminerals.com

TRANSFORMATION

The role of the mining sector

in promoting enterprise & supplier development Intentional economic inclusive programmes developed by mining corporates, coupled with disciplined participation from communities in these programmes can lead to a great amount of shared value being gained by both corporates and host communities By Gordon Malebo

With the mining sector’s significant contribution to the South African economy, at approximately 7.8% of GDP, meaningful transformation is possible and can be achieved through clear articulation of benefits that all stakeholders stand to gain from embracing the curative spirit in which the transformation policies of the country were crafted. Increasing awareness regarding social issues within mining host communities provides a perfect opportunity for mining corporates to seize the moment and leverage the possible benefits of balancing their mining interests with delivery of impactful, socio-economic transformation programmes.

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Economic transformation can be driven through multiple initiatives; however, this article will solely focus on Enterprise and Supplier Development (ESD) levers available to all mining corporates. Under the revised BBBEE codes, ESD refers to a combination of affirmative action activities aimed at promoting and enhancing economic transformation in the country, driven through preferential procurement, supplier diversity and capacity development of small enterprises. These small enterprises are categorised as Exempt MicroEnterprises (entities with turnover of R10m or less) and Qualifying Small Enterprises (entities with turnover from R10m to a maximum of R50m).

TRANSFORMATION

Enterprise development is an initiative that seeks to provide capacity development to local entrepreneurs or enterprises that are not part of the supplier database of the mine, whereas, supplier development seeks to improve the capacity and performance of small businesses that are already part of the mine’s supply chain. These capacity development initiatives are primarily driven through preferential procurement (inclusive procurement in mining context) legislation which is aimed at fostering procurement of services and goods from previously

leading to local entrepreneurial growth; • Catalysed job creation resulting from small business growth, driven by meaningful value chain participation through ESD programmes; and • Broad local economic growth that eventually leads to improved livelihoods and thriving host communities.

disadvantaged businesses, as enshrined in the mining charter to achieve supplier diversity and ultimately enable host communities to participate meaningfully in direct procurement opportunities as well as indirectly through spinoffs generated by the mining value chain.

the ability to pursue diverse economic opportunities beyond mining and assist in reducing stagnation. Corporates will have an added benefit in the form of: • a balanced approach in driving competitiveness of the mines and ensuring sustainability of host communities beyond mining; and • less disgruntled communities, minimising production disruptions of the mining sites, thus, enabling shareholder value creation and contributing to a thriving economy.

Driving impact through shared value approaches In order for corporate ESD programmes to achieve impactful contribution to their local host economies, they have to be deliberate, committed and undeterred in: • implementing ESD programmes that drives long term sustainability of small suppliers; and • ensuring alignment of supply chain policies to the attainment of small suppliers’ inclusivity in all sourcing activities, including core mining opportunities. In the Journal of Business Ethics, Porter and Kramer describe shared value as policies and strategies that enhance the competitiveness of the corporate whilst simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value approaches in ESD programmes can yield the following socio-economic benefits: • Increased small business participation in meaningful skills development programmes

These socio-economic benefits will ultimately empower the host communities progress economically, become independent and develop

ESD programmes must always be designed to drive impact and bring about meaningful economic inclusion. Impact can be achieved through demand led and foresighted programmes, that will prioritise access to markets and access to development finance at preferential rates.

Demand led model The demand side relates to the procurement plan of the mine for the duration of the development programme. This procurement plan stipulates all services and products that will be needed by the site throughout the programme duration. These opportunity pipelines, aligned to effective inclusive procurement strategies, give effect to enhanced selection and recruitment of relevant suppliers that can be matched to the procurement pipeline and provided with the necessary capacity

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TRANSFORMATION

development that will enable them to participate meaningfully.

Foresighted development approach model This is mainly aimed at what are generally referred to as strategic large capital projects that are continuously allocated to large national or multinational corporates due to a lack of skills or lack of quality product offering from small businesses. The capacity development programme should incorporate technical capacity development which can ensure effective skills transfer that will prepare small suppliers to: • Partner with the large corporates in providing the required services; and • Develop the necessary skills to start participating in core mining activities through sub-contracting and possibly mutually beneficial joint ventures. The pool of suppliers developed through these models should provide for increased confidence in mining corporates to consider unbundling strategies of large core mining opportunities to enable significant growth of local small businesses.

Access to finance Access to empowerment funding with preferential rates will continue to be a great growth enabler for small businesses that would otherwise receive high interest rate charges from commercial banks due to their risk classification. Various funding instruments paired with closedcircuit verification processes can be employed to enable the small businesses to access funding whilst mitigating against the inherent risk associated with small businesses. These financial instruments may include (amongst others), contract finance, medium term loans, forex facilities as well asset finance. A reliable process of verifying contracts with the employer or mining corporate allow for a seamless de-risking of the finance transaction which will eventually reduce the

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cost of capital which is crucial for small business survival. In facilitating ESD funds, the process must be clearly defined and clearly understood by all parties involved in order to avoid delays that may place undue pressure on the small business cash-flow status.

All key stakeholders must embrace the transformation agenda I believe more can still be done in developing host communities to take meaningful participation in the immediate local economy and eventually in the mainstream economy of the country. However, this can only be achieved when all key stakeholders embrace the transformation agenda in the spirit that it was intended. As we enter the new season of stakeholder engagements through informative and networking events such as the Mining Indaba, the country must clearly communicate the shared value benefits that can be achieved through conscious and deliberate stakeholder collaborations that would ensure efficient utilisation of the ESD transformation levers afforded by legislation, to achieve meaningful economic transformation of host communities. 

Gordon Malebo is an ESD strategist assisting corporates to clearly define and craft their transformation strategy.

APPRENTICESHIP

Welders are a dime a dozen, but

quality welders are not Welders it seems are a dime a dozen but highly skilled welders are not. This is the stark reality facing the South African industrial sector according to Southern African Institute of Welding (SAIW) Executive Director John Tarboton, who is concerned about the number of fly-by night training institutions that churn out graduates without the proper qualifications in place.

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APPRENTICESHIP

This wastes students’ hard-earned or even borrowed financing and sends out a generation of unqualified welders into the marketplace. And it can end in situations like that found during the construction of the Medupi Power Station, where 150 Taiwanese welders were employed for specialised welding work due to a lack of local skills in this specialised field, which is certainly not an acceptable situation. It is made worse within the context of South Africa’s 34.9% unemployment rate (Stats SA) equating to 7.6 million people without work.

Training of welders needs to be given the respect it is due "However, even when welders seek out employment; anecdotally what we have found is that out of 10 interviewed, only one will be sufficiently qualified for the job," Tarboton comments.

“Unfortunately this stems from training providers not always understanding the need for suitably qualified and experienced trainers within their institutions, who follow clearly outlined training guidelines in properly equipped facilities. In addition, certification bodies do not always understand the need for properly trained assessors with a proper understanding of Codes and Standards underwritten by objective assessments. “As a result what we are increasingly seeing is students who have already completed training at other institutions coming to us to gain the proper certified, government recognised training after battling to find or keep employment due to a lack of skills,” adds Tarboton. This is especially worrying given the danger this poses to the quality of the installations or projects or products that the welders work on prior to achieving the appropriate level of skill.

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APPRENTICESHIP

The apprenticeship scheme has also been proven to reduce training and recruitment costs.

The training of welders needs to be given the respect it is due. Welding is an essential skill to manufacturing and fabrication in strategic sectors such as power generation, chemical processing and construction, transportation, food and beverage and mining.

Light at the end of the training tunnel Against this backdrop, and to solve South Africa’s crisis of a lack of suitably qualified welders, the SAIW is seeking to partner with companies who want to produce artisan welders to the correct standard and with the necessary skill levels. This can take place via the government approved QCTO – the Registered National Occupational Qualification (Welder) 3-year Apprenticeship scheme. As an Approved Training Body’s (ATB) under the IIW and a QCTO accredited training institute, SAIW is in a prime position to assist companies with the selection of candidates for its three-year apprenticeship training scheme, which offers both QCTO and IIW Diplomas - the latter recognised in 60 countries. The SAIW’s training methodology uses theoretical in-depth knowledge and practical real world skills. “There is a reason our QCTO programme takes three years, not three weeks, as in many other institutions where training is rushed and based on the easiest methods of welding to ensure sufficient pass rates," says Tarboton. “We are not focused on ticking off a list

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of training modules as quickly as possible, with little regard to whether the required technique has been mastered and sufficiently practised. Our training culminates in a test based on objective criteria according to ISO 3834 standards where the actual quality of a weld, including its height and thickness, for example, is assessed – not just the act of having completed a weld.”

Business benefits The apprenticeship scheme is also not just a ‘nice to have’. It has tangible commercial benefits for companies: • Recruit and develop a highly-skilled workforce that helps grow their business; • Improve productivity, profitability, and their bottom line; • Create flexible training options that ensure staff develop the right skills; • Minimise liability costs through appropriate training of workers; and • SETA grants, SARS tax benefits and BBBEE scorecard points for skills development. The apprenticeship scheme has also been proven to reduce training and recruitment costs. Once the training programme is complete, business’s gain skilled employees who are trained to industry standards and familiar with a company’s operations and culture. This provides a lower-risk, lower-cost style of recruitment and enhanced employee retention. To promote the use of this scheme, SAIW is offering QCTO apprenticeship courses at its Johannesburg headquarters with the potential for a satellite school in the Highveld Industrial Park in Emalahleni and a second potential site in Middelburg, Mpumalanga, in collaboration with the Department of Economic Development and Tourism. 

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'GREEN' FINANCE

Future trends in

green financing Green financing is likely to evolve over the next few years, with financial institutions increasingly requiring more accurate measurements of borrowers’ achievements against targets. By Khurshid Fazel & Garyn Rapson, Partners at Webber Wentzel Although the current focus in Africa’s growing sustainabilitylinked finance sector is very much on the 'E' component of Environmental, Social and Governance (ESG) principles, the 'S' and 'G' aspects are expected to become more prominent over time as the sector matures.

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'GREEN' FINANCE

It is evident South African corporates are showing a real interest in improving ESG standards. Environmental aspects are receiving most of the attention at present, partly because of the amount of research and discussion around climate change and partly because social impact is harder to measure, but the Covid pandemic has really balanced the scales.

Banks still grappling with ways to roll out sustainability-linked finance Currently, domestic banks are still grappling with

becoming more complex and there is widespread concern about 'greenwashing'. Banks will be held responsible for doing insufficient due diligence into potential clients before lending them sustainability/ green finance. The necessity for due diligence extends beyond the client’s project to the client’s supply chains, for example, if a borrower is seeking a loan for a solar photovoltaic project, the bank has to look as far as the source of the solar panels to ensure they were not made in a factory that uses child

ways to roll out sustainability-linked finance and labour. green bonds to their clients. Most domestic banks • Traditional banks have historically lacked the are engineering sustainability loans off traditional internal expertise to measure and monitor funding and adding appropriate sustainabilityclients’ compliance with ESG. This is changing linked clauses to the agreement. and we are seeing banks recruit carbon and We expect the following themes to evolve over other ESG experts as monitoring and tracking the next few years: of performance is becoming more important. • The need for green finance is not limited to • Over time, we expect step changes will occur capital projects but is also in demand to assist in climate and other green tech solutions with clients’ 'just transition' plans, to help which are likely to be funded by sustainabilitycompanies to transform the way they operate linked finance solutions. Similarly, internal to become more environmentally friendly. ESG tracking, and governance solutions are Companies are making progress on sourcing emerging in a fast-changing technological more renewable energy, managing waste on advancement space.  site and being more efficient in their use of water and energy. • We see ESG compliance increasingly becoming a requirement for insurance companies, which, in the international market are starting to engage lawyers or auditors to audit performance against a set of standards. Companies may, in future, struggle to access certain insurance products if they Khurshid Fazel, Partner at Webber Garyn Rapson, Partner at Webber have poor ESG performance. Wentzel Wentzel • Reporting standards are

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ADVERTORIAL: BDO SOUTH AFRICA

How mines can best position themselves to lead the way on ESG

Adapting to ESG risks is not new to mining. This gives companies in this sector a competitive advantage when it comes to complying with new and evolving legislation around their environmental impact and social licences to operate. But being ahead of the curve can lead to complacency if not actively managed and monitored. By Carla Clamp, Director at BDO South Africa A pressing issue facing the mining industry is the global shift toward net zero carbon emissions. This has led to rising expectations among stakeholders. In turn, investment houses and banks have begun adjusting their credit ratings based on a company’s decarbonisation commitments, making it more difficult to access funding if these considerations are not taken seriously. Community engagement is another ongoing ESG risk to mining operations. Due to the added risks brought about by Covid 19 and environmental instability caused by climate change, miners are increasingly being held to

account when not meeting the health and safety needs of their employees and those of the local communities where they do business. While some of these risks require substantial structural adjustments, there are a number of practical, quick wins to be found. Data collection remains an area for improvement among most organisations. Companies that still rely on manual documents such as invoices to measure their energy and water consumption, should consider switching to ERP (Enterprise Resource Planning) or other software solutions to track related ESG indicators. This will help to improve and track performance in the long run.

Opportunities for improved ESG

Rather than view these risks as onerous, businesses should see them as opportunities. The most fundamental advantage of this is access to funding, which is often directly linked to ESG performance. More broadly, within our own industry in South Africa, subscribing to the global benchmark for ESG can only take us so far. Going forward, we need to create the framework and standards for ESG in our mining sector. This requires taking into account our country’s unique context, from our climate to the social history of the country. Get this right and we will be well equipped for the ESG challenges that lie ahead. 82 sabusinessintegrator.co.za

BDO South Africa E CClamp@bdo.co.za

AUDIT • ADVISORY • TAX

A NEW PERSPECTIVE ON SUSTAINABLE MINING In a sector as volatile and dynamic as mining, you need an adviser who is in touch with the latest developments to help your company navigate the opportunities and challenges. Trust our team of experts to guide you guide you through your ESG journey.

ES G

www.bdo.co.za

Copyright © 2022. BDO South Africa Services (Pty) Ltd, a South African company, is an affiliated company of BDO South Africa Inc., a South African company, which in turn is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO to discuss these matters in the context of your particular circumstances. BDO, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it. The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent of BDO South Africa Services (Pty) Ltd. The opinions expressed are in good faith and while every care has been taken in preparing these documents, BDO South Africa Services (Pty) Ltd makes no representations and gives no warranties of whatever nature in respect of these documents, including but not limited to the accuracy or completeness of any information, facts and/or opinions contained therein. BDO South Africa Services (Pty) Ltd, its subsidiaries, the directors, employees and agents cannot be held liable for the use of and reliance of the opinions, estimates, forecasts and findings in these documents.

SUSTAINABILITY

SA’s environment,

society and governance metrics ranking South African listed companies can stand tall amongst the developed nations in our adoption and application of environment, society and governance (ESG) metrics. By Chris Blair, CEO of 21st Century

For the first time, 21st Century (representing Africa) is part of a worldwide study of ESG metrics conducted by the GECN Group of companies covering five continents: Africa, Asia, Australia, Continental Europe and North America. We have just completed the study across eight listed exchanges in which South Africa is the only emerging market exchange.

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SUSTAINABILITY

Why is ESG important? ESG metrics can be described as non-financial metrics and are about the sustainability of the world, the continents, countries, businesses and society. Everyone knows about the dire effects that global warming will have on the earth as we know it if the increase in world temperatures exceeds 1.5 degrees. Society is becoming more vocal about government and business practice as the world moves from 'shareholderism' to 'stakeholderism'. This trend has been catapulted forward due to

companies are starting to incorporate ESG metrics in executive long-term incentive plans and that the weighting is higher than in prior years – tying sustainable metrics to executive pay in the long term. The main trends emerging from the study are: • A growing number of companies across the world are tying executive pay to ESG performance, particularly in the environmental area. • There is an increase in the number of companies using social metrics in their incentives in all

the Covid 19 pandemic, which has highlighted regions, except Singapore. the unsustainable business practices worldwide that are Environmental Health & Safety leading to the destruction Scope 1 GHG Emissions Fatalities Scope 2 GHG Emissions Injuries of the environment and of Scope 3 GHG Emissions Illnesses society – highlighted by the GHG Emissions (scope not specified) Exposure to Harmful Substances growing wage and wealth Non-Renewable Energy Workplace Policies gap around the world. Renewable Energy

More companies starting to incorporate ESG metrics in executive long-term incentive plans This year’s GECN research aimed at examining any year-on-year trends in companies using ESG metrics in executive incentive plans (both the prevalence and weighting), particularly changes in connection with the Covid-19 pandemic and the increasing market pressure for companies to increase their focus on ESG in their business strategies. The study also identified that a growing number of

Health & Safety Not Disclosed

Environmental Incidents Air Quality Land Management Water & Wastewater Management Waste & Hazardous Materials Management Environment Not Disclosed

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Community

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Diversity & Inclusion

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Other Community (State Measure)

Employee Voluntary Turnover

Other Customer (State Measure)

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Governance

Sustainability

Governance at the Board of Directors' level

Sustainability Index

Governance at the Executive Boards' level Risk management Compliance Behaviours, Ethics, Values and Culture Other Governance (State Measure)

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SUSTAINABILITY

• The pandemic resulted in a significant shift in social metrics – away from employee engagement metrics and towards an increase in workplace policy metrics – employee wellness. • Companies allocate a higher weighting to ESG metrics in short-term incentives (25%) than in long-term incentives (20%). • The most significant increase in inclusion in long-term incentive plans is the inclusion of environment and climate change metrics. • The global average aggregate weighting of ESG metrics in incentive plans account for 9% of the

Percentage of Companies

maximum total remuneration package (fixed pay plus variable pay) received by the company’s top executive each year. The question is, is the weighting of these ESG metrics material enough to actually incentivise management to act?

of companies using ESG metrics, whilst Australia leads (84%), followed by the United Kingdom and Europe (79%). South Africa is just ahead of the world average – given that we are an emerging market (compared to developed markets), we should be proud and stand tall. There has been a huge swing towards social metrics, catalysed by the pandemic which highlighted the inequity of pay and wealth around the world. The poor have borne the brunt of the fallout from the pandemic through loss of jobs, reduction in pay, increased fuel and food prices –

hence there has been an increased focus on this non-financial metric. This has been particularly prevalent in South Africa, which has the highest Gini coefficient (measure of income inequality), and one of the highest unemployment rates in the world. How does SA perform compared to its South Africa moves to third place for the use peers? of Social Metrics (68%), behind Australia (84%) More than 74% of companies in all sectors and Europe (70%). South Africa leads the charge reviewed use ESG metrics. However, how does on diversity, equity and inclusion (DEI) metrics South Africa perform relative to its peers globally? with this social metric being front-of-mind in South Africa ranks fourth in the world with 75% most companies’ strategies. 45% of companies worldwide use DEI metrics followed Figure 1: Percentage of companies using ESG metrics in incentives by region by 37% who 100% 2020 2021 use employee 90% engagement 84% 82% 79% 79% metrics. 80% 75% 74% 74% 73% 70% South Africa 69% 70% 63% ties in 1st place 62% 60% 57% 57% 56% with Australia, with 13% for the 50% most important 40% metric of ESG 30% – the weighting of the executive 20% maximum total 10% remuneration linked to ESG metrics. 0% United South Canada USA Singapore Global Australia Europe The link between Kingdom Africa 86 sabusinessintegrator.co.za

SUSTAINABILITY

Figure 2: Percentage of companies using social metrics in incentives by region 100% 90%

2020 82%

2021

84%

80% Percentage of Companies

the executive key performance indicator (KPI) and executive pay is critical in incentivising the executive to “do the right thing”. Although the weighted linkage is still quite low (and increasing), South

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63%

67% 60%

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Percentage of Maximum Total Remuneration Opportunity

20% Africa is well ahead of the global average 10% of 9%. 0% The split between United United Canada USA Singapore Global Australia South Kingdom Africa weightings of performance metrics Figure 3: Average proportion of top executives’ maximum total remuneration contingent on weighted for short-term and scorecard ESG metrics by region long-term time 15% 2020 2021 horizons is critical in 13% 13% the incentivisation 12% 12% 11% of executives. This determines whether 9% a forward-looking 9% 9% 9% 9% 8% sustainable approach is more important 6% than short-term wins, 6% 5% 5% that could result in 4% long-term losses. Figure 4 shows 3% that using ESG metrics is much more 0% prevalent in shortSouth Eurupe United Canada USA Global Australia term incentives (71%) Africa Kingdom than in long-term incentives (only 16%). We can only hope that in short- and long-term incentives. It is rather the the move from short-term towards long-term weighting of the metric that is important, as this incentives continues rapidly, as this is how ESG incentivises the executive’s behaviour. metrics will become sustainable. The median weighting for ESG metrics in shortThe prevalence does not, however, tell the term incentives is 25% compared to 20% in longfull picture of the effectiveness of ESG metrics term plans, and is significant for both. The upper

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SUSTAINABILITY

Figure 4: Percentage of companies using ESG metrics in incentives by short (left hand column) and long-term (right hand column) incentives by type of measure 2020 SHORT-TERM INCENTIVES

80% 70%

66%

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2021

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64% 60%

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ity

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Figure 5: Weighting of ESG metrics in incentives by short- and long-term incentives quartile, 25% of metrics or more have a weighting in short-term incentives 50% 2020 2021 of 40% and 30% for long-term incentives. This is encouraging for 75 PERCENTILE 40% the future sustainability of ESG. Even at the lower quartile, 25% of metrics 30% or less still have a weighting of 20% 50 PERCENTILE for long-term incentives. In the coming years, we expect 20% 25 PERCENTILE to see the growth of the trends in companies that adopt non-financial 10% ESG metrics in their incentive plans: 1. Over the long-term (5-10 years) these companies have a higher 0% SHORT-TERM INCENTIVES LONG-TERM INCENTIVES historical Total Shareholder Return (TSR) compared to the market. of its environment, climate change, social inequity 2. They will be larger market capitalisation and wellbeing. ESG metrics could be the silver companies or have higher institutional bullet that brings this change about, but only if it is shareholding percentages. universally adopted and governed. 3. They will have a higher weighting on nonSouth Africa sets an example that as an financial metrics. emerging market, we can contribute and stand tall The world is in urgent need of change in terms amongst our global peers.  Weighting in Incentive

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ENVIRONMENT

Environmental compliance

monitoring & enforcement The Centre for Environmental Rights (CER), a non-profit organisation and law clinic, assists communities and civil society organisations in South Africa by advocating and litigating for environmental justice. Catherine Horsfield, CER Attorney, shares her thoughts. What steps has the mining industry taken to become more environmentally-friendly over the past 10 years? Mining companies continue to apply for coal mining rights in sensitive environments that are at the highest risk for mining, and government departments continue to accept those applications, and frequently grant those rights. The mining industry needs to invest more with reference to self-regulation in the face of poor state capacity to monitor and enforce compliance with environmental and water laws.

Are laws and legislation adequate to meet COP targets? Although the law now recognises that climate change impact assessments are mandatory for listed projects, there is no legal mechanism in place to monitor projected emissions at a cumulative and collective level. While the Climate Change Bill does introduce carbon budget and emission trajectories as mechanisms for managing emissions to meet COP targets, it lacks details and timeframes in which some of these measures need to be implemented. Beyond legislation, we are also going to need critical coordination and implementation capacity at a national level, to ensure compliance with mitigation targets; and at provincial and local

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government levels to provide adequate response to adaptation challenges. The Presidential Climate Commission, which will become a permanent institution when the Climate Change Act is passed, has a crucial role to play, not only to ensure coordination amongst spheres of government and government departments, but to monitor and report on progress against climate targets.

Considering the fact SA is a developing country with a high unemployment rate, can there be a balance between mining and the environment? While it is true that the mining industry has been a major contributor to the South African economy, the vast majority of South Africans did not share in the economic benefits of the mining industry over the majority of its two-century history in this country. Moreover, the environmental externalities of mining – the water and soil pollution, the loss of land, the air pollution, and the health costs associated with these – have not been borne by the mining industry and those who finance it, but rather by the communities living around these mines. The Free, Prior and Informed Consent (FPIC) standards can play an essential tool to enable communities to negotiate their own development outcomes, including the benefits they would need

ENVIRONMENT

to enjoy if they are to endure the impact of mining on their land. Mining companies should support its integration into our legal framework. Increasingly, there is recognition of the interdependence of climate, ecosystems, biodiversity and human societies. It is crucial that we integrate these systems, rather than pit them against each other.

What are your thoughts about moving away from coal and moving towards cleaner, renewable energy solutions? The mining, transportation and combustion of coal all cause severe pollution and environmental degradation, and the impacts are often irreversible. Coal’s status as a cheap fuel relies on its actual costs not being reflected in its market price, and the coal industry would not remain profitable if these costs were internalised. Often the poorest and most vulnerable communities pay the price for these externalities. For example, the 2008 Greenpeace report The True Cost of Coal estimated that global external costs of coal amounted to around €360 billion in 2007 and could soar to more than €3.6 trillion over 10 years. A move away from coal-based electricity generation to renewable energy solutions is long Acid mine drainage caused by mining

overdue. We need to plan for a just transition which secures the future and livelihoods of workers and their communities in the transition to a lowcarbon economy, stop subsidising fossil fuel companies and prioritise rehabilitation of land and water that has been contaminated by coal mining and burning.

What key changes are needed in the mining industry? Wits Law Professor Tracy-Lynn Field proposes some of the elements of a new mining sector in her book, State Governance of Mining, Development and Sustainability. These include the need for a transformed state that understands its role as being the advancement of human rights and wellbeing, and equitable prosperity. Beyond that, we also need the state to consider whether the end use of the mineral commodity promotes equitable prosperity and human wellbeing, and whether this justifies the opportunity cost of extracting it, rather than just considering the level of investment, or the financial and technical capacity of the mining proponent. Another important element, promoted by University of Pretoria economist Lorenzo Fioramonti, is proper exploration of opportunities for mineral recycling, and manufacturing that relies heavily on recycled materials. This will include sustainable agriculture, tourism and the knowledge sector, as forms of industrialisation that are lowintensity, smaller scale and labour-intensive, in line with our burgeoning youth population. Lastly, we will need a far more rigorous system of protection for important areas of biodiversity, strategic water source areas and food-producing zones from mining. Government has spent decades and millions studying and identifying these areas. What is now required is legal protection, and investing in implementation, compliance and enforcement. 

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MINING

Sustainable environmental technologies crucial to SA mining industry's future

The future of mining in South Africa is bright; however, it is critical that sustainable environmental technologies are employed in mining operations, says GIBB Mining Managing Director, Alan Wingrove. What is the expected growth of the mining sector for 2022? With the global economy recovering from the Covid-19 pandemic, the demand for commodities has been strong to rebuild stockpiles and/or to satisfy the increased demand on the ground. As a result, commodity prices have boomed. The Ukrainian crisis has sparked a global energy crisis with crude oil and coal prices escalating exponentially. Mining houses worldwide are cashflush, with shareholder returns in record territory. In South Africa, all mining houses are doing well, but could have done better to exploit the high commodity prices were it not for the Eskom and Transnet constraints. There remains an uneasiness to invest in South African new mines with long-term commitments, but rather to invest in Brownfield expansions and carbon footprint reduction initiatives.

What are some of the key challenges expected in 2022? The socio-political landscape remains volatile, which

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impacts the critical focus needed to address the South African economic woes and in turn, the levels of unemployment. The drive for sustainable energy solutions is commendable and necessary but will not solve the electricity supply uncertainty in the near-term for current and future mining operations. Nevertheless, the 100MW self-generation capacity limit provides mines with the opportunity to lock-in predictable escalation on electricity costs going forward. Self-generation also facilitates sustainability for local communities beyond mine closure.

What are the opportunities for the sector? The commitment by the majority of nations to a zero carbon economy by 2050 has shifted the needle in terms of the production of e-vehicles and concomitant demand for battery minerals and copper. Supply and demand will dictate a shift in metals of the future.

MINING

How does the promotion of going 'green' and the advancement of technologies impact the sector? There is significant commitment by all mining houses to reduce their carbon footprint. Shareholders demand commitment to a carbon reduction plan and hold the executive to account. Alternative energy solutions for powering mining fleet are receiving huge attention.

What are some of the key strides that have been made within the sector from a sustainability perspective? Environmental and social sustainability remains a key focus. Local community buy-in is key to facilitating the social license to operate. Sustainable clean energy solutions post mine closure provides local mining communities the opportunity to diversify more easily into alternative sources of income, such as farming, tourism and small-scale industry.

From a transformation perspective, what are some of the key objectives with reference to empowering women within the sector? The increasing role of women in mining is very positive in that their instinctive ability to create a more caring work environment is likely to enhance health, safety and environmental compliance. This in turn has the effect of nurturing and improved productivity culture. A healthy and transparent working environment is a productive working environment.

As an important driver of the economy how can legislation and partnerships assist in enabling job creation in areas of operation and positioning SA’s mining industry as a global leader? The recent relaxation of the self-generating capacity limit is a good example of government working

in partnership with the mining sector to create sustainable jobs going forward. Similarly, privatisation of SOE’s in a collaborative spirit will unshackle the current Eskom and Transnet constraints. Political stability and clear unambiguous legislation is a requirement to attract investment in mining in South Africa to reposition the industry as a global leader which it should be.

What is a critical component that would help develop the sector? The beneficiation of our mineral wealth instead of exporting raw materials for beneficiation by others is a key factor in keeping a lid on development. Unfortunately, beneficiation processes are energy intensive and this strategy is a non-starter at present. Digital management platforms are seen to be ways of improving the efficiency of new and existing mining operations to drive down the cost curve, hence improving investor attractiveness.

What does the future of the mining sector look like? The future of mining is very bright with the proviso that sustainable environmental technologies can be employed.  GIBB Mining is a multi-disciplinary engineering and consulting firm, specialising in innovative and sustainable techno-economic, holistic solutions for mining projects, from concept to commissioning and handover. GIBB Mining offers clients support with study development (early concept through to feasibility), design, procurement, and construction management of new greenfield mining projects as well as brownfield projects.

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TECHNOLOGY

Technology can fast track

skills development in the mining sector in 2022 Career development took a back seat in the mining sector during the pandemic as Covid-19 restrictions made it extremely difficult to send people for training effectively. Budgets were also strained because of lockdowns, so many mines had to cut back. As a result, learnerships and further education and training, as well as community development, were put on hold. By Gordon Jacques Malebo Farmer, MD of PRISMA

94 sabusinessintegrator.co.za

TECHNOLOGY

This has exacerbated the existing skills shortage, and it has become imperative to bring the focus back once again to mandatory training initiatives and career development pathways. Technology can be very helpful in achieving this, with immersive training simulators that can improve safety and learning retention within the mining industry.

Driven by technology Many mines have already invested in VR systems, but their training programmes have not been designed around the technology, so they are not using them to their full extent. The right training partner can be invaluable here, helping to build and tailor training

On the fast track The skills shortage in mining is no new scenario, but it has worsened since the pandemic, exacerbated by a bleed of skills into Africa due to high demand. Skills development is also mandated by the mining charter, so without this focus, mines risk falling foul of compliance and legislation. Ultimately, however, mines are risk intensive environments, so training and development are vital to prevent injury, death, damage to property and other serious consequences. Training and development need to cover both theory and practical elements, and technology can assist to fast-track this while improving skills development in all areas.

Virtually real

initiatives around the technology. South Africa has some of the deepest mines and most dangerous mining conditions across the globe, so it is imperative for the country to set the benchmark when it comes to safety and training processes. Including the use of 4IR technologies into training interventions helps to increase safety and efficiency, while allowing for the focus on skills development required to meet regulatory and moral obligations. Integrating this effectively with a training partner helps to improve returns and advance risk management for safer, more efficient and ultimately more profitable mining operations. 

Virtual Reality (VR) can be a massive advantage in the mining sector, with immersive technologies and simulators that can be used to teach people to operate machines correctly and safely, without them having to actually learn on the equipment. This can be used to revolutionise training programmes because training can be completed faster, and in a safer environment, which in turn aids in skills transfer and deeper learning. VR can be used in all areas of mining training, and tools like operator performance analysis can be deployed to identify areas where individuals need improvement. This not only enhances efficiency, as training can then be tailored to address gaps in existing skills and knowledge, it also helps employees improve faster, and enhances the safety of the mine as a whole.

Jacques Farmer, MD of PRISMA

sabusinessintegrator.co.za 95

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SA Business Integrator - Volume 8 l Issue 2

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Technology can fast track skills development in the mining sector in 2022

Sustainable environmental technologies crucial to SA mining industry's future

BDO: How mines can best position themselves to lead the way on ESG

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Turning property into prosperity in 2022

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Sparkling Diamond: Sparkling (like a) Diamond

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