Economic empowerment

The Department of Mineral Resources awarded Foskor three new mining licence's in September 2009 and approved the company’s economic impact assessments and environmental management plans for the Pyroxenite Expansion Project. Foskor is still in the process of converting its old order mining rights into new order rights in terms of the Minerals and Petroleum Resources Development Act (No. 28 of 2002). The new mine, the South Pyroxenite pit, has been operational since September 2009.

Local Economic Development

Local Economic Development (LED) is a government-driven economic growth initiative that encourages locals to pool resources with municipalities and alleviate poverty. LED was designed to seek growth and employment creation opportunities. By definition, a successful LED programme is one that is aligned to national policy, strategy and guidelines. It provides direct and hands-on support to provincial and local government structures and outlines the management of the LED Fund used to offer technical support to nodal economic development planners. LED is also a useful tool for coordinating and monitoring donor programmes and for building capacity processes.

An Integrated Development Plan (IDP) is a process whereby municipalities prepare five-year strategic plans, reviewed annually, in consultation with communities and other stakeholders. These plans strive to promote integration by balancing social, economic and ecological pillars of sustainability without compromising the government’s institutional capacity.

The Ba-Phalaborwa Municipality and Foskor have agreed on five projects valued at R26.5 million over the next four years, as per the 2009/10 IDP. These are:

• Paving the streets and installing additional storm water drains;
• Rehabilitating streets in Phalaborwa;
• Rehabilitating landfill sites in Namakgale, Lulekani and Phalaborwa;
• Upgrading the sports precinct in Lulekani; and
• Creating a Bollanoto infrastructure development hub.

The existing tarred streets in Phalaborwa are in a grim state and in urgent need of fixing. The streets in the central business district and industrial sites accommodate high traffic volumes running to different routes and local hubs. The road rehabilitation project will form a network of reliable, safe streets. It is part of the Expanded Public Works Programme, the main beneficiary of which is the Ba-Phalaborwa community.

As part of the LED strategy for the greater Phalaborwa area, projects that will enhance tourism and the lives of people in the area were sought. Vacant land in Phalaborwa – adjacent to Hendrick van Eck Avenue and currently covered in foliage – was marked as ideal for the development of tourist attractions. Foskor plans to convert this land into a pedestrian boulevard. This Bollanoto infrastructure development hub has also been dubbed ‘the jewel of wildlife tourism’ by the local municipality.

Empowering communities

Foskor believes in uplifting impoverished communities by providing the means to be self-sufficient. At the Ntambanana Centre (Richards Bay), Foskor provides widows with tools and seeds to cultivate their own gardens. Together with the Department of Arts and Culture, Foskor is involved in supporting the teaching of beading to rural women. The company also endows traditional leaders with a development fund to drive innovative ideas within the community.

In a quest to reduce gypsum disposal, Foskor joined forces with Rapid Building Systems from Australia. The Rapidwall Project, estimated at R145 million, uses phospho-gypsum to manufacture prefabricated wall panels for use in houses. The project is currently in the feasibility stage and a demonstration house was erected in Richards Bay in April 2010. After rigorous testing and upon approval from the authorities, panel manufacturing plant will be set up in Richards Bay. The plant will provide approximately 90 permanent jobs and consume about 104,000 tons of gypsum, currently considered waste, per annum.

BEE Procurement

In 2009 the Procurement and Logistics Division focused on promoting transformation and wealth creation through preferential black economic empowerment (BEE) spending. The department made dedicated efforts to update its database with current supplier contact details, capturing changes to business profiles and verifying compliance documentation.

During 2009, supplier evaluation was reinstated at the Acid Division in Richards Bay and adjustments were made to the processes used at the Mining Division in Phalaborwa. The revised systems serve to identify duplication of tenders by the same supplier across different divisions and simplify the procedure of listing BEE compliant vendors.

Systems were put in place to ensure an improvement in preferential procurement and BEE spending. The Acid Division achieved a 60% BEE procurement spend and the Mining Division 32%. Plans to improve BEE spending in Phalaborwa are under way. On average, the group achieved 45% BEE spend, up from 44% in 2008/09.

Foskor entered into an agreement with South African International Business Linkages (SAIBL). In terms of the agreement Foskor offers procurement opportunities to black owned entities that SAIBL will empower. Foskor and SAIBL fund 40% each of the total cost of interventions and the benefited entity contributes 20%. Foskor allocated R1 million to this project in 2009/10. Ten SMMEs benefited from this initiative of which five were in Phalaborwa and the balance from Richards Bay.

The Acid Division donated two computers to the Zululand Chamber of Commerce and Industry to be used by emerging suppliers to access the tanarawa system for web opportunities tendering. The Acid Division facilitated computer training for potential suppliers in partnership with the National Youth Development Agency.

Foskor attained its first BEE rating from Emex at level 5 and was ranked an 80% BEE contributor. The company plans to achieve level 4 in the next verification with the following elements identified for improvement: preferential procurement, enterprise development and socio-economic development/corporate social investment.