From Stakeholder Engagement to Strategic Partnership: RAL and Rakhoma Sign Overture MoA
RAL AND RAKHOMA SIGN OVERTURE MOA
Roads Agency Limpopo (RAL) and Rakhoma Mining Resources recently entered into a Memorandum of Agreement (MoA) for a road infrastructure project in Ga-Mogashoa, a village in the Sekhukhune District Municipality of Limpopo Province.
The project is for the design and construction of an intersection at Ga-Mogashoa and rehabilitation of a portion of Road D2219. The stretch of D2219 to be rehabilitated is at Ga-Masha to Magneets Hoogte (Magnet Heights) to Ga-Mogashoa near Steelpoort in the Fetakgomo Tubatse Local Municipality.
Rakhoma, hosted on the Geluk Mine property in Ga-Mogashoa, is partly owned by Vanchem Vanadium Products (a company of Duferco Group). Vanchem are the producers of vanadium, which is contained in a special type of ore used in the steel, aerospace and chemical industries.
According to Rick Reato, the Chief Executive Officer of Vanchem, this resource was identified in Ga-Mogashoa in 2012. The Sekhukhune district, particularly the Fetakgomo Tubatse Local Municipality, is a bona fide mining area.
“From 2013, we were already active determining and quantifying the resource, going through prospecting rights etc,” says Mr Reato.
Mr Reato continued, “We wanted to develop the resource. We needed access to the resource. When we were invited to RAL Stakeholder Engagement in February 2018, it was an ideal opportunity, it came at an opportune time and we were able to put our project forward, for the intersection and road.”
In February 2018, after a successful participation at the 2018 Investing in African Mining Indaba, Roads Agency Limpopo hosted a productive Stakeholder Engagement and Fundraising Session with the local business and mining sector in the Sekhukhune District Municipality. [The story was covered in Mmileng First Quarter Edition 2018]
RAL intensified its interaction with the mining sector by identifying four opportunities for potential or future strategic partnerships, estimated at just over R1,12 billion based on preliminary technical assessment, as it steams ahead to address 1 173km of backlog in the Sekhukhune district.
RAL CEO Maselaganye Matji says the MoA with Rakhoma is one of the products of the session that the Agency had at Lapeng Guest Lodge on the Wildebeestkraal Farm on the outskirts of Burgersfort, where it engaged different mines to share with them RAL’s plans and what it intends doing in the area.
At the session, emphasising on the success of the Agency’s Strategic Partnership Approach, Mr Matji said: “Every little amount contributes; we want you to be part of the solution to our country, our province and to our local municipality.”
The venue itself was donated by local businessman Werner Smulders.
“There are those who committed on the same day that they want to focus on specific projects within the Sekhukhune district. Rakhoma Mine was one of them. And when we started the discussions with them we agreed that we will break our agreement, for example, into two. The first part of the agreement will focus on the intersection on D2219 which goes to the site where they will be mining, at the Geluk Mine,” said Mr Matji at the MoA signing.
The estimated maximum cost of the project is R6.5 million, and Rakhoma will contribute 100% of the project cost, with RAL as the implementing agent.
Mr Reato, who is also the interim CEO of this small and new mining player in the Sekhukhune area, says the MoA is the culmination of those discussions from the February 2018 Stakeholder Engagement and Fundraising Session with RAL.
“We have had a very nice and pleasant experience with the Roads Agency Limpopo,” says Mr Reato.
According to RAL’s Mr Matji, the second phase of the project will target the Steel Bridge at the intersection of D2219 and R555 at the evaluated cost of R81m.
“For the second stage, we will be looking at the Steel Bridge, in terms of how we are going to either replace or refurbish the structure, breaking it down into two stages. The first stage being the immediate one in terms of dealing with the bridge, and for the second stage we will be looking at the medium to long-term options of whether we are going to replace that bridge or what. In that case, we are going to invite other mines who made the commitment in that session we had at Lapeng Lodge.”
Since 2015, RAL has successfully lobbied the mining sector to contribute to road infrastructure around areas where they operate.
Five mines have already pledged to work with Roads Agency Limpopo on the Steel Bridge project, evaluated at R81 million, and two others will include it in their next Social and Labour Plans’ consultations.
“This is the start of our new relationship in building the district. And also in contributing to the people in the area in terms of changing their lives through job creation and also building small businesses that will contribute to the economy of the district, the province and the rest of the country,” says Mr Matji.
During the construction process, several job opportunities will be created, and Small Medium and Micro Enterprises (SMMEs) will benefit.
In terms of RAL policy, successful contract bidders are expected to sub-contract 30% (on upgrading projects) and 15% (on the maintenance or rehabilitation projects) of contract value to small businesses in villages adjacent to the project sites, and 10% of contract value should be used for employment of local labourers in areas where road upgrades and maintenance projects are undertaken.
As a caveat, the policy further states that procurement of SMMEs should be limited to the locality of Limpopo Province with preference given in the priority order of, first to the SMMEs from affected villages, then to those within the local municipality before exploring the district municipality labour catchment area for skills, experience and training opportunities.
The project will also make it easier for Rakhoma to access the mining site, improve access for the community and enhance flow of traffic to and from Ga-Masha to Ga-Phasha and Ga-Mampuru to Steelpoort. The estimated construction duration of this project is nine months, and construction will begin subject to other conditions in the MoA being met.
“EVERY LITTLE AMOUNT CONTRIBUTES; WE WANT YOU TO BE PART OF THE SOLUTION ….”