Doing business with South32

In South Africa, our Enterprise Development Program provides selected local entrepreneurs with the necessary infrastructure and skills to develop into viable enterprises, to enable them to feed into our supply chain. 

We are committed to developing an Enterprise Supplier Development (ESD) process that is capable of supporting transformation in an effort to make a meaningful contribution to the social and economic development of South Africa. This is in line with South32’s aspirations to create value beyond compliance which is a philosophy driving towards generating positive impact to enterprises and communities whilst meeting legislative requirements. 

To enable this, we have developed an ESD process that aims to improve awareness of South32’s value systems and opportunities to any qualifying enterprises and suppliers whilst providing positive value and impact to the enterprises and their communities. 

Please note that the program is currently reserved for businesses within our local communities in which we operate. These areas are King Cetshwayo District (KCD) Municipality and John Taolo Gaetsewe (JTG) District Municipality.

In order for applying enterprises or suppliers to qualify for ESD support, they must meet at a minimum the following criteria: 

• Be at least 51% black owned Exempted Micro Enterprises, Qualifying Small Enterprises 
• Candidates must have an existing enterprise that is registered in South Africa 
• You are a local in the area in which we operate  
• The enterprise must conform with all legal requirements to operate e.g. licenses as well as generally be in good legal standing 
• The enterprise must be a good cooperate citizen committed to transformation, skills development and empowerment of the communities 

Due to an overwhelming number of requests received each year, we cannot guarantee that each application will be successful as they will assessed in accordance with business requirements.

We have structured their ESD program to provide different types of support based on the enterprises stage of business maturity and existing operating gaps including the following: 

• Loans 
• Grants (where applicable) 
• Shorter payment terms 
• Incubation support through Business Development Support and programs 

South32 appreciates the critical importance of ESD to the advancement of local economic development (localisation), transformation, job creation and socio-economic growth and prosperity of the people within its operating ecosystem. South32 is fully committed to developing small and medium black enterprises and creating growth opportunities for black enterprises in the local communities in which South32 operates. To execute on this commitment, South32 aspires to spend the 1% of Net Profit after Tax (NPAT) on Enterprise Development (ED) and 2% of NPAT on Supplier Development (SD). 

We have established walk-in business support centres to assist local businesses in the areas in which South32 operates. Our Northern Cape centre is based in Kuruman while in Richards Bay our business centre is next door to our Hillside operation.  

The specific support offered by these walk-in centres includes: 

• Business Development Support Programmes  
• Business Compliance  
• Financial Management support 
• Tender Readiness 
• Technical Skills and Safety requirements  
• Connecting Enterprise Development to Supplier Development 

South32 has been successful in supporting local businesses through our ESD program for many years through business development support and asset funding opportunities. 

At Cerro Matoso we have incorporated selection criteria based on supplier location to promote local sourcing. We support local suppliers in the vendor creation process, and help them to understand our operation requirements and administrative processes.

As these are usually small companies, trials are promoted with internal customers in order to ensure a smooth introduction to minimise the potential non-compliance in terms of qualities or lead times. Following that process, purchase volumes are increased according to the operation's needs and vendor competitiveness.

Cerro Matoso's Local Procurement Plan is an initiative that defines a local procurement strategy through direct purchase of goods and services to enhance the socio-economic development. The Plan supports local procurement activities across three levels of local vendors:

1. Direct Influence Area: Most of these vendors are related to communities that are located in the area surrounding the Cerro Matoso plant.
2. Local: Vendors with economic impact on 6 cities closer to the operation. These cities are less than 100,000 population and include: Montelibano, San Jose de Ure, Puerto Libertador, La Apartada, Caucasia and Planeta Rica.
3. Regional: Economic impact outside of local boundaries, Regional includes vendors from Monteria and Sincelejo, capital city of Cordoba and Sucre Department respectively.

Additionally, to support the socio-economic development of the region where Cerro Matoso operates, we have changed payment terms for local vendors with annual billing below US$300.000 from 30 days to 14 days.

FY23 local contribution

• 35% of purchases during the year were awarded to suppliers from the Cordoba region and Atlantic coast, for a value of US$61.5 million  
• US$19.5 million spent with suppliers based in the Direct Influence and Local areas, a 51.5% increase from FY22.
• US$112.4 million was spent with suppliers from other parts of Colombia.