RAL and Min­ing Gi­ant Sign R100 Mil­lion Part­ner­ship

Mmileng - - Contents -

Roads Agency Lim­popo (RAL) and Exxaro Re­sources, a JSE-listed black-em­pow­ered di­ver­si­fied min­ing com­pany, have signed their sec­ond Memorandum of Agree­ment (MoA) since 2015 that ef­fec­tively lines up the up­grade of a 9.56-kilo­me­tre D2001 road from gravel to tar in the Water­berg District Mu­nic­i­pal­ity of Lim­popo Prov­ince in the next fi­nan­cial year.

The im­ple­men­ta­tion of the new project will be car­ried out jointly by the two part­ners.

RAL and Exxaro are, be­cause of the first part­ner­ship signed in 2015, cur­rently work­ing to­gether on a R250mil­lion project for the up­grade of sev­eral roads in the Lepha­lale Lo­cal Mu­nic­i­pal­ity of Water­berg, that con­nects Ga-Seleka vil­lages on the out­skirts to the com­mer­cial cen­tre of Lepha­lale.

Once the North­ern and South­ern links of the Ga-Seleka and Kitty road projects are com­plete, these roads will, im­pres­sively, link a to­tal of thir­teen ru­ral vil­lages.

RAL CEO Maselaganye Matji hailed the re­cently signed part­ner­ship as a vote of con­fi­dence in the way the Agency con­ducts busi­ness, while Exxaro’s Ex­ec­u­tive Head of Coal Op­er­a­tions Nom­basa Tsen­gwa high­lighted the com­bined over­sight role both or­gan­i­sa­tions have through their re­spec­tive project man­agers and en­gi­neers as pro­fes­sional, and a hall­mark of a suc­cess­ful part­ner­ship.

“Most (strate­gic) part­ner­ships con­tri­bu­tions are between 25% and 30%, how­ever those who have had the ex­pe­ri­ence of work­ing with us have in­creased (those) con­tri­bu­tions sig­nif­i­cantly in sub­se­quent projects,” said Mr Matji.

In the break­down of the cur­rent project un­der im­ple­men­ta­tion, Exxaro has con­trib­uted R71.2m or 28.5% to­wards the con­struc­tion cost while RAL is car­ry­ing the bal­ance of R178.8m out of the to­tal R250m.

The Strate­gic Part­ner­ship Ap­proach with pri­vate sec­tor com­pa­nies, par­tic­u­larly in the min­ing and agri­cul­tural sec­tors, has been one of the key tenets of RAL’s suc­cess­ful turn­around strat­egy since the low point of 2011-2015.

The pri­vate sec­tor con­tri­bu­tions, now to­talling R482 mil­lion, have helped to sup­ple­ment the an­nual grant al­lo­ca­tion of un­der R1 bil­lion that RAL gets from Pro­vin­cial Trea­sury to build roads.

Mr Matji said the suc­cess of this ap­proach has gone a long way in al­le­vi­at­ing road in­fra­struc­ture back­log in the prov­ince, by co-fund­ing the con­struc­tion and re­ha­bil­i­ta­tion of roads in eco­nom­i­cally strate­gic ar­eas.

The fu­ture D2001 and the cur­rent project were jointly iden­ti­fied through the In­te­grated De­vel­op­ment Plan (IDP) of the Lepha­lale Lo­cal Mu­nic­i­pal­ity, and pro­vi­sion for co-fund­ing was sub­se­quently in­cluded in Exxaro Grootegeluk’s So­cial and Labour Plan (SLP).

Dr Tsen­gwa said her firm de­cided to fund this project not only be­cause it is a manda­tory re­quire­ment but also be­cause it is not cur­rently pro­vided for in RAL’s con­strained bud­get.

“As a re­spon­si­ble cit­i­zen, Exxaro un­der­stands that the part­ner­ship between the pub­lic and pri­vate sec­tors is re­quired to al­le­vi­ate the back­log on in­fra­struc­ture,” she said of Exxaro, which is also in­cluded in the Re­spon­si­ble Min­ing In­dex.

SLP is a manda­tory re­quire­ment and ul­ti­mately a bind­ing doc­u­ment re­quired by the Depart­ment of Min­eral Re­sources from mines on how they will ben­e­fit their em­ploy­ees and the com­mu­ni­ties they op­er­ate in from their mas­sive prof­its.

Dr Tsen­gwa ex­pressed Exxaro’s ap­pre­ci­a­tion for the part­ner­ship with RAL say­ing they also, like RAL, want to en­sure that the de­vel­op­ment of the area is ad­vanced.

“The most ex­cit­ing part for us is the ul­ti­mate goal of en­sur­ing that the cost of do­ing busi­ness in Lepha­lale is re­duced, and should not be sti­fled by is­sues of ac­cess,” she said

“Be­cause we have ex­pe­ri­enced that chal­lenge of be­ing a pi­o­neer, a miner and a busi­ness, in that area with­out other part­ners where we had to sin­gle­hand­edly drive a lot of these ini­tia­tives. But hav­ing a part­ner like RAL can take us a long way.”

The Labour ab­sorp­tion process will also be bi­ased to­wards lo­cal Small Medium and Mi­cro En­ter­prises (SMMEs) and lo­cal labour­ers, who will ben­e­fit from on­the-job train­ing and peo­ple de­vel­op­ment through pro­vi­sion of ac­cred­ited train­ing.

Ac­cord­ing to Exxaro, the com­pany has to date spent R11.6m on labour com­ple­ment, cre­ated 187 jobs on­site, pri­ori­tis­ing the vul­ner­a­ble groups; namely women, youth and peo­ple liv­ing with dis­abil­i­ties. The con­trac­tor on the South­ern link road has al­ready ex­ceeded their con­trac­tual tar­get of 60 jobs for the lo­cal com­mu­nity. And an amount of R36.6m has al­ready been spent of SMME de­vel­op­ment and a fur­ther R337 000 was spent on train­ing.

“Ga-Seleka projects are a good demon­stra­tion of how Exxaro Cor­po­rate So­cial In­vest­ment (CSI) strive to cre­ate a pos­i­tive le­gacy and im­prove con­di­tions of host com­mu­ni­ties by pro­vid­ing jobs, sup­port­ing lo­cal pro­cure­ment, skills de­vel­op­ment, and en­sur­ing sus­tain­able so­cial and eco­nomic ben­e­fits,” says the com­pany.

RAL it­self ringfence 30% of ev­ery project value to the em­ploy­ment of lo­cal SMMEs and 10% to the em­ploy­ment of lo­cal labour­ers in ar­eas where it im­ple­ments its con­struc­tion projects.

Mu­tual ben­e­fits of the ex­ten­sion of the up­grade will pre­dom­i­nantly as­sist with easy ac­cess to min­ing op­er­a­tions whilst also ben­e­fit­ing all other road users in the area by re­duc­ing trav­el­ling time and of­fer­ing im­proved road safety for com­mu­ni­ties.

The con­ser­va­tive es­ti­mate for con­struc­tion du­ra­tion for this new road in­fra­struc­ture project is ten months and it is sched­uled for com­ple­tion dur­ing the 2019/20 fi­nan­cial year.


Exxaro’s Ex­ec­u­tive Head of Coal Op­er­a­tions Nom­basa Tsen­gwa and RAL’s Chief Ex­ec­u­tive Of­fi­cer Maselaganye Matji dur­ing the MoA sign­ing cer­e­mony at Exxaro Head­quar­ters in Pre­to­ria at the end of April 2018

RAL and Exxaro’s first strate­gic part­ner­ships project in Lepha­lale is due for com­ple­tion by the end of No­vem­ber 2018. The ex­ten­sion of this up­grade will be com­pleted dur­ing the 2019/20 fi­nan­cial year.

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