Case Study – Local Economic Development
The Mining sector is littered with examples of rural communities being left behind when large mining companies began extractive activities on what was previously tribal or agricultural land. Such situations easily become volatile and lead to broken trust and poor relationships between the Mine and the local communities.
One of the large platinum mines on the Platinum belt in the Limpopo province decided to act in a pro-active manner and contracted a consultant to do a feasibility study on an Economic Development Centre (EDC) that would stimulate economic growth in the Mogalakwena district.
The study assessed the potential of local businesses, the procurement opportunities created by the Mines in the area as well as the existing SME support infrastructure. It was important to understand and consider the structures, systems and the attitudes that would either facilitate or hamper local economic development and local content procurement.
In the recommendations, a development centre was proposed, which was designed around the barriers to entry that would have to be overcome by local entrepreneurs and SME’S. The centre design proposed a unique blend of skills development / job centre service offerings, with a full suite of SME development and support services. The motivation for this design proposal stemmed from the understanding that many potential entrepreneurs would have to go through an employment phase to gain exposure to the mining sector, prior to being ready to become business owners.
The EDC design proposed a strong focus on technical incubation in order to fast-track the development of a community, which was previously mostly engaged in Agriculture, to become familiar with and entrenched in the mining value chain. The following were the typical results that the EDC could deliver over a period of 5 years: