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Press release: Forging stronger MSMEs as part of South Africa’s mining future and energy transition

Gold, diamonds and other mined resources have long powered South Africa’s economy. But its true wealth can be found in the small businesses that supply these sectors and will help us fuel a just transition to a carbon-resilient future.

Minerals and energy are major contributors to South Africa’s economy. They’ve been a lifeline as of late, holding the line against Covid’s economic force as global demand for the country’s precious mineral resources and commodities increased in the last two years. But with the climate crisis bearing down on the world, a shifting employment landscape in the mining sector, and South Africa’s energy sector rolling toward reform, change is literally in the air. The answers to navigating these changes aren’t found deep in the ground, but in the people who fuel our micro, small, and medium-sized enterprise (MSME) businesses and supply services to these sectors.

Adapting industry to address climate disruptions presents a significant challenge on its own. In November of 2021 as part of COP 26, the governments of South Africa, France, Germany, the United Kingdom and the United States, along with the European Union announced the “Just Energy Transition Partnership to support South Africa’s decarbonisation efforts” with an initial commitment of $8.5 billion to “prevent up to 1-1.5 gigatonnes of emissions over the next 20 years and support South Africa to move away from coal and to accelerate its transition to a low emission, climate-resilient economy.” South Africa’s Department of Mineral Resources and Energy (DMRE) is also focused on accelerating a just transition and in compliance with the Mining Charter, keeping social and labour objectives in mind.

Achieving a transition to a low emission climate-resilient economy and transforming the mining and energy sectors won’t be easy. However, it is critical to South Africa’s economy and our ecosystem that we do so and the move toward diversification presents many opportunities. With coal representing over 70% of South Africa’s total mass of minerals produced and over 500,000 people employed in the mining industry alone, preparing the energy and mining sectors for the next chapter begins now.

That’s why, as mining sector leaders and officials meet this week in Johannesburg as part of the annual Joburg Indaba, Zevoli Growth Partners and the African Management Institute (AMI) are proud to announce a new partnership to deliver a comprehensive supplier diversity programme, MSME Future Forge. The programme will focus on preparing and diversifying the MSMEs who supply the mining and energy sectors with critical business skills and help position them for the next generation of opportunities.

Developing a diverse range of suppliers in energy and mining is also critical to moving rural communities away from the single industry dependency trap, where a single dominant industry has left many MSMEs caught in a trap of survival. This move cannot happen if large mining organisations continue to afford the strategic opportunities to the same handful of preferred suppliers, leaving smaller businesses to continue eking out a living on low-risk and often low-value opportunities. All too often MSMEs are passed over for supplier opportunities because of a cited lack of ability to meet procurement requirements.

Zevoli Growth Partners and AMI’s growth and resilience programmes have already helped MSMEs grow their capacity, establish procurement relationships with sponsoring mining houses, increase revenue, create jobs and improve supply chains. In 2021 alone, MSMEs supported by AMI programmes grew on average by 35% and created 4 new jobs each. As corporates prepare for change and diversify their suppliers, MSME Future Forge will help South Africa’s leading mining houses address the disconnect between their procurement requirements, and the expectations of MSMEs who seek to become providers, but often are not able to meet procurement criteria. We hope to also offer this programme in the energy sector in the near future.

South Africa’s mining and energy sectors face a seismic shift. To keep our economy and our communities agile in the face of change, we must forge a stronger backbone and invest in South Africa’s MSMEs through skills and training. As two of South Africa’s leading MSME support companies, we are committed to helping businesses be equipped to meet tomorrow’s challenges and unearth the potential of our people.

The authors are Mpopi Khupe, CEO and co-founder of Zevoli Growth Partners and Rebecca Harrison, the CEO and co-founder of the African Management Institute (AMI). Zevoli Growth Partners and AMI recently announced a new programme partnership, MSME Future Forge for Mining Supplier Diversity.