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FORUM ON SUPPORTING EFFECTIVE MINING LOCAL PROCUREMENT STRATEGIES AND BEST PRACTICES IN NAMIBIA

© 2019 by the University of British Columbia and Canadian International Resources and Development Institute (CIRDI).

The material in this publication is copyrighted. Quoting, copying, and/or reproducing portions or all of this work is permitted provided the following citation is used:

Musiyarira, H., Geipel, J., Gruber, C. (2019). Report Title: Forum on Supporting Effective Mining Procurement Strategies and Best Practices in Namibia. Canadian International Resources and Development Institute (CIRDI)

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Canadian International Resources and Development Institute

Vancouver, British Columbia, Canada

www.cirdi.ca

[email protected]

Program undertaken with the financial support of the Government of Canada provided through Global Affairs Canada.

Programme réalisé avec l’appui financier du gouvernement du Canada agissant par l’entremise d’Affairs mondiales Canada.

Cover: Forum Participants/ HARMONY MUSIYARIRA

Venue: NUST HOTEL SCHOOL

Photo Credits: HARMONY MUSIYARIRA

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TABLE OF CONTENTS

Executive Summary .................................................................................................... 2

1. Introduction .......................................................................................................... 4

1.1 Welcome Remarks ................................................................................................ 4

1.1.1 CIRDI overview ..................................................................................................... 5

1.1.2 Chamber of Mines .............................................................................................. 6

1.1.3 Questions and Discussion points .................................................................... 9

1.1.4 Ethiopian Delegation ........................................................................................... 9

1.1.5 Dundee Precious Metals ..................................................................................11

1.1.6 Debmarine ..........................................................................................................12

2. Panel Discussion ................................................................................................. 14

2.1 Group Discussions ..............................................................................................15

2.1.1 Questions and comments ..............................................................................16

3. Conclusions ......................................................................................................... 17

4. Recommendations ............................................................................................. 17

5. Appendices: Photos ............................................................................................ 19

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EXECUTIVE SUMMARY

In February 2017, as a result of a joint collaborative research project funded by Global Affairs Canada (The Relationship between Local Procurement Strategies of Mining Companies and Their Regulatory Environments, Namibia and South Africa), the Canadian International Resources and Development Institute (CIRDI), and Engineers Without Borders Canada – Mining and Shared Value (EWB-MSV) released a report which examined the relationship between local procurement regulations and mining company practices in the South African and Namibian mining sectors. Following the report’s release, it was timely to build on its findings and to explore possible next steps in order to sustain this project’s impact. Therefore, CIRDI, EWB-MSV and the Namibia University of Science and Technology (NUST) hosted a dialogue event with stakeholders in order to advance the issue of local procurement within Namibia and regionally in the African continent. The primary purpose of this forum in Namibia was knowledge exchange. The major objectives of the workshop were to:

1. Provide a forum for local narratives from suppliers and mining companies with regards to local procurement.

2. Generate confidence in local institutions and interested local actors to advance the conversation on local procurement in mining and inspire new collaboration.

3. Strengthen the foundation for organizations to further this research in Namibia to support mining regulators and company practices, specifically organizations such as Namibia University of Science and Technology.

4. Increase the development impact of the report and the sustainability of the project results.

As echoed in recent policy assessments in Namibia, it is important to advance efforts such as local procurement in the country. The mining industry must be active partners as governments have limited resources and capacity to drive this issue forward in the short-term. It is against this background that the President of the Chamber of Mines Namibia (COM), together with the Economist for COM, were invited alongside other mining companies to participate in the forum which was held on 5 December 2018 at the NUST Hotel School.

The Forum on “Supporting Effective Mining Local Procurement Strategies and Best Practices in Namibia” was well attended by about 32 stakeholders (13 females and 19 males) from government (Ministry of Mines and Energy, Ministry of Industrialisation, Trade and SME Development), The Chamber of Mines Namibia, local mining companies (Debmarine, Dundee Precious Metals Tsumeb, Ohorongo Cement, Namibian Diamond Trading Company), local suppliers to the mining industry (ESV Mining, Twahangeni Consultancy, Rhombus and Lithon Consulting), academia from Namibia University of Science and Technology (NUST) and International University of Management (IUM), non-governmental organizations (the Institute of Public Policy and Research (IPPR)), and the media. A delegation from Ethiopia’s Ministry of Mines and Petroleum, through the support of CIRDI’s Supporting the Ministry of Mines (SUMM) Ethiopia project, also attended and presented at the forum. The forum included keynote speeches, presentations, and panel and group discussions involving the local mining industry, academia and the local suppliers to the mining sector in Namibia. Five presentations were made, of which two came from women. The panel was composed of 2 women and 3 men. These presentations and panel discussions were augmented by the participants, who had opportunities to ask about and comment on the subject. The forum was facilitated through the Department of Mining and Process Engineering (DMPE), under the guidance and financial support of the Canadian International Resources and Development Institute (CIRDI).

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The welcome address was given by the Vice Chancellor Dr. Tjama Tjivikua (represented by Prof. Godfrey Dzinomwa). The keynote speakers were Mr. Isabeau Vilandre (Director of CIRDI’s SUMM Ethiopia Project) and Mr. Zebra Kasete (President of the Chamber of Mines of Namibia and Vice President and Managing Director for Dundee Precious Metals Tsumeb). The key presentations and discussions were centered on answering the following questions:

• What local procurement opportunities exist in Namibia?

• What are the current success stories and opportunities for local procurement?

• What are the gaps in local procurement?

• What are the key barriers to unlocking local procurement in Namibia?

• How are procurement processes incentivizing (or disincentivizing) female entrepreneurs?

The following were seen as potential areas for further research and action for Namibia in order to enhance local procurement in the mining sector in Namibia:

• Availing consistent information on procurement demand from the Namibian mining industry in order to unlock local purchasing

• Consolidating knowledge on how to foster local procurement and content at the national and local levels through policies and practices

• Establishing mechanisms to link Community Development Agreements (CDAs) with Corporate Social Responsibility (CSR) initiatives

• Outlining the role of government in the creation of linkages and the delineation of the roles of other stakeholders/actors such as industry, civic society and academia

• Designing tools and methods to ensure consistency in reporting on local procurement

• Determining the percentage of resources procured locally compared to the percentage of resources imported by local people importing on behalf of mining companies

• Investigating the numbers provided by the Chamber in order to obtain disaggregated data on local procurement and local value creation component

• Incorporating leading practices for Supplier Development Programs (SDPs)

• Adopting leading practices for building suppliers’ networks and facilitating engagements

• Leading practices for setting up suppliers’ portals

• Exploring non-regulatory interventions and incentives for local procurement

• Training professionals to service the mining industry and the development of a framework to regulate the professionals’ performance

• Developing appropriate and relevant training that builds capacity to include local factors gradually and systematically

• Seeking the practices most conducive to the sector’s growth while incentivizing the emergence of local entrepreneurs

• Establishing a Steering Committee to champion local procurement in mining that involves government, the mining industry through the Chamber of Mines and the procurement managers, the Chamber of Commerce and Industry, academia, and civil society. The role of the Steering Committee would be to:

• Discuss incentives and non-regulatory interventions that can be used to increase local procurement, such as supplier development portals and coordination of aggregate orders

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• Discuss roles and responsibilities of different actors to address barriers in local procurement and to determine who has the capacity and agency to move things forward

• Discuss how to align and push agendas forward (re. SDGs, local vision 2030, National Development Plan 4/5, Africa Mining Vision, etc.)

• Report and monitor local procurement

• Develop industry, government and university linkages to support research and design for local solutions and the development of adapted technologies that can be supplied locally

1. INTRODUCTION

The forum consisted of keynote speeches, presentations, and panel and group discussions involving the local mining industry, academia and the local suppliers to the mining sector in Namibia. This forum was augmented by the participants, who had opportunities to ask and comment on presentation topics. The following sections provide a brief summary of the forum’s discussions and presentations.

1.1 WELCOME REMARKSThe Vice Chancellor Dr. Tjama Tjivikua, in a speech read on his behalf by Prof. Godfrey Dzinomwa, outlined that local procurement promotes local participation in the mainstream economy and advances the socio-economic benefits of the mining industry. Moreover, local procurement can create and bolster essential local employment, promote the development of vital skills and actuate technology transfer. Dr. Tjivikua also expressed his gratitude to the Canadian International Resources and Development Institute and the Mining Shared Value initiative of Engineers Without Borders Canada for providing the resources to conduct the important dialogue on the state of local procurement in the mining industry. He further reiterated that Namibia can only overcome the so-called “paradox of plenty” or “resource curse” by developing strong backwards supply chain linkages between mining activity and local suppliers. He also reminded government that although it is often thought that this issue can only be addressed by regulations, there is however increasing evidence that the desire to keep host communities supportive of their mining companies’ operations is more effective and is a key driver for the mining companies. Therefore, most mining companies are motivated by the need to attain the social license to operate. This approach has greater potential to empower local communities in which the mines are located and also enables the company to thrive in the environment in which it is operating.

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Figure 1 & 2: Presenters and Participants

1.1.1 CIRDI overview Mr. Isabeau Vilandre, Director, CIRDI’s Supporting the Ministry of Mines (SUMM) project, gave an overview of the history of the formation of CIRDI and outlined its role as an independent centre of expertise in natural resource-led development. CIRDI works at the request of developing country governments that seek to strengthen their capacity to govern and manage their natural resources for the benefit of their people. He further stated that CIRDI believes that all countries can benefit from transparent, accountable institutions that represent and serve the people, that diversity is a strength and that economies do better when everyone has a chance to succeed. CIRDI has partners in 42 countries including 22 project sites. After the background summary, Mr. Vilandre then gave an overview of the study with particular attention to key lessons and the need for future work. He explained that the relationship between local procurement regulations and mining company practices in the South African and Namibian mining sectors was examined through a collaborative research partnership between the Canadian International Resources and Development Institute (CIRDI) and the Mining Shared Value venture of Engineers Without Borders Canada (EWB-MSV), with contributions from SEF Canada Ltd. and the Norman B. Keevil Institute of Mining Engineering at the University British Columbia. The project’s objective was to provide an analysis of the consequences of two local procurement regulatory environments in Namibia and South Africa in order to improve evidence-based decision-making regarding local procurement policy and regulation. The Key Findings of the final research report were:

• The data presented in this study suggests that local procurement regulation is bringing increasing attention to local procurement, particularly when comparing company reporting in South Africa and Namibia.

• There are a wide variety of incentives for mining local procurement that exist independent of regulation that merit more attention, particularly the desire to keep host communities supportive of company operations.

• Regulations without comprehensive capacity-building support for existing and potential suppliers is leading to unrealized potential and tension. There is a perceived lack of resources and concern over the ability of local suppliers to meet company needs.

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• Economic empowerment laws are not necessarily in line with industry growth goals in both countries.

• There are concerns over corruption and front companies in South African local content regulation.

After the overview of the project, Mr. Vilandre then explained the SUMM Ethiopia Project, which is funded by Global Affairs Canada for $15 million CAD for 5 years (2016-2021). The project will strengthen human and technical capacity in the Ministry of Mines and Petroleum in the following key areas:

• Establishing a consistent, predictable and transparent licensing system

• Developing inclusive stakeholder-responsive frameworks, structures and processes to advance the mining sector

• Improving consistency and efficiency of coordination and governance between federal and regional levels

• Increasing capacity to provide world-class geoscience information and promote priority industrial minerals services and opportunities to support investment

• Enhancing project management to support collaboration, monitoring and coordination of resources for sustainable results

Figure 3 & 4: CIRDI Presentation (Mr. Isabeau Vilandre, Director, SUMM Ethiopia)

1.1.2 Chamber of Mines Ms. Lauren Davidson, an Economist at the Chamber of Mines Namibia, gave a presentation overviewing local procurement in the Namibian Mining Industry. She highlighted that the revenue generated by the Mining Industry in 2017 was N$ 29.09 billion and that approximately 41% of this money went into local procurement. She explained that local procurement of goods and services by mining companies has the following advantages:

• Directly benefits surrounding communities; the existence of mines creates business opportunities for local suppliers

• Employment creation (indirect employment creation through multiplier effect)

• Wealth creation

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• Skills and technology transfer

• Integrates the mining industry with other sectors of the economy, through technology and skills transfer

• Catalyzes the development of Namibia’s manufacturing base through linkage deepening

She also highlighted the need to align the upstream, downstream and side stream linkages for the improvement of the economy and in which government, mining industry and manufacturing industries all pull in the same direction to improve the livelihood of people. Ms. Davidson went on to define the linkage breadth and depth as follows:

• Linkage breadth – range of inputs associated with a particular value chain and number of suppliers

• Linkage depth – value added component in the linkage/supply chain

Her position was that in Namibia’s mining industry, although the spending profile is evidence of a broad supply base, there appears to be limited local production of mining inputs (shallow linkage depth). She highlighted that the Chamber of Mines is looking at the possibility of deepening the backward linkages in the local mining supply chains. Ms. Davidson had the following classifications for suppliers:

• Original Equipment Manufacturers (OEMS): These manufacturers design and manufacture mining equipment and machinery, as well as heavy vehicles. These companies also provide specialized after-sales services and maintenance. Such companies are typically large, established international corporations.

• Engineering, Procurement, Construction Management Suppliers (EPCM): Such suppliers are generally contracted to manage, design and construct a new mine or to upgrade existing parts of the mine or processing plants.

• Consumables Input Suppliers: Consumable input suppliers provide products directly to mining companies that are used in mineral extraction and processing, for example, explosives and chemical reagents.

• Agents and Distributors: These actors distribute various mining supply inputs, especially equipment for OEMs and corresponding spares and components.

• Suppliers of Auxiliary/Support Services: These suppliers provide important auxiliary services and inputs to mines such as catering and cleaning.

• Specialized Engineering Services: This group of firms usually have specialized engineering capabilities and can be subcontracted by the OEM or the EPCM for that particular service.

• Component Manufacturers: These firms provide and produce parts or components of equipment.

Ms. Davidson then highlighted several success stories from the mining sector with regards to local procurement:

• Ohorongo cement: Cement made from 100% Namibian ingredients. Fuels to fire kilns are created from local recycled material and biomass from de-bushed charcoal, gypsum and iron ore. These materials are used to produce cement, which is sourced in Namibia. Packaging bags are also manufactured locally.

• Sulphuric acid: Dundee Precious Metals Tsumeb recently started producing sulphuric acid from harmful sulphur dioxide emissions at the smelter. This is a major input in the processing (leaching) of minerals for many mines in Namibia, which was previously being imported. An example of this is off-take agreements with Rössing and Weatherly International’s Tschudi operation.

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• Skilled human resources services: Following the successful commissioning of B2Gold mine and plant operations in Namibia, the skilled artisans were transferred to the B2Gold project in Mali.

The main summary points from the presentation were as follows:

• Backward linkages through mining in Namibia are shallow due to limited local production of capital goods, consumables and components.

• A large portion of local value lies in the provision of services. In this regard, Namibia has become an exporter of mining related services.

• There are opportunities to further develop (deepen) local supply chain in the production of consumables.

• It is necessary to align supplier development programmes to procurement needs.

• Further research is needed for local content policies. However, these should avoid restrictive local ownership requirements.

• Further research should also look to include an analysis of suppliers to capture the real economic value of linkages and to provide a better perspective of challenges experienced on the ground which would give better guidance for industry and policy directives.

• The specific input requirements (goods and services) of the mining sector as a whole need to be understood for suppliers to assess potential business opportunities.

Figure 5 & 6: Namibia Chamber of Mines Presentation (Ms. Lauren Davidson, Economic, Namibia Chamber of Mines)

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1.1.3 Questions and Discussion pointsThe following questions were posed after the first two presentations were made:

1. What is the Chamber of Mines doing to ensure that the local procurement actually benefits the local communities instead of a few individuals?

2. What support mechanisms are in place to empower the local communities so that they can participate in the supply chain for the mines operating in their areas?

The following responses were made to the questions posed to the presenters.

A presenter responded that the Mining Charter already sets targets for the mining companies operating under their (COM) umbrella. Most of the work is done under CSR initiatives and has potential to empower the local communities. Every company under the Chamber has leeway to do as it deems fit without jeopardizing the Chamber’s reputation. It is difficult to enforce the charter on mining companies that are outside the Chamber’s umbrella. The Public Relations manager for Ohorongo Cement then explained the company’s role in empowering the suppliers through capital injection, training and capacity building initiatives. The case study is for Kaptau packaging which supplies the cement manufacturing firm with the bags for packaging the cement. B2Gold used Namibian artisans who were instrumental in building the Otjikoto B2 Gold plant on a similar project in Mali.

1.1.4 Ethiopian DelegationMr. Betru Haile, Adviser to the State Minister, Ministry of Mines and Petroleum of Ethiopia, gave a presentation on behalf of the Ethiopian Delegation on the Ethiopian mineral sector and local content context. With a population of over 100 million, Ethiopia is the second largest country in Africa by population and has one of the fastest non-oil economic growth in the world. The country has excellent potential for the use of geothermal energy resources, which is mainly confined within the East African Rift System. It is estimated that Ethiopia could generate more than 10,000 MW from its geothermal energy resources; currently only 7.3 MW power is being produced at a pilot plant. The major minerals mined in Ethiopia are gold and base metals, industrial minerals, and gemstones. There are six (6) major sedimentary basins which are good potential targets for petroleum exploration and three Gas Field Discoveries containing about 4.7 TCF gas. Mr. Haile outlined the following investor incentives:

• Market freedom: company/mining license-holders have the right to sell minerals domestically or overseas.

• Cost recovery: all mineral exploration/ pre-production costs are 100% recoverable.

• Exemption from customs duties and taxes: the mining law provides exemption from customs duties and taxes on equipment, machinery, vehicles and spare parts necessary for the mineral operations.

• Opening of the foreign currency account in Ethiopia: mining laws guarantee the opening and operation of a foreign currency account in Ethiopia.

Local Content in the Mining Sector Initiatives in Ethiopia

• Proclamations, Directives and Regulations in the Artisanal and Small-Scale Mining (ASM) sector, some implementation manuals

• Revising and updating Mineral Sector Policy is at its final stage

• Development of the National Road Map for the Mining Sector finalized in collaboration with the Ministry of Science and Technology

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• Capacity development programme underway in the framework of the Growth and Transformation Plan II (GTP2) to facilitate regulatory functions

• Development of the National ASM Strategy underway in collaboration with the SUMM Ethiopia Project

• Data collecting and organizing on mineral production, transaction and employment creation in the sector underway

• The MoMP is working to conduct outreach programmes to create awareness and to solve the bottlenecks of the sector

• The MoMP launched the National Mining Council in December 2018

Challenges

• Although components of Local Content (LC) are codified in the mining sector proclamation, it is felt that the legal backing to enforce LC provisions is weak

• Lack of local suppliers of goods and services at the standard quality and quantity

• Weak linkage between mining actors and financial institutions

• Most ASM mines are informal

• Lack of value addition in most mineral products

• Lack of partnership between government, companies, and local communities

Opportunities

• The government is committed to undertaking reform in the sector

• The government is working to enhance value addition, especially on precious and gemstone minerals

• The need of local communities to benefit from the sector

• The willingness of our economic partners to support the sector in capacity building and reform process

Figure 7: Ethiopian Delegation Presentation (Mr. Betru Haile, Adviser to the State Minister, Ministry of Mines and Petroleum of Ethiopia)

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1.1.5 Dundee Precious MetalsMr. Zebra Kasete, Vice President and Managing Director of Dundee Precious Metals Tsumeb (DPMT) and current President the Chamber of Mines of Namibia, gave an overview of procurement at Dundee Precious Metals Tsumeb. The company’s production of sulphuric acid has contributed to the local procurement in the country. Trans Namib acquired 90 tankers dedicated to sulphuric acid transportation and six locomotives. As of 2015, DPMT has spent 85% of its procurement budget through local e-procurement. Dundee Precious Metals also aligns its vision with the mining charter’s procurement pillar, which aims to establish new businesses and procure from local suppliers. However, the following challenges were highlighted: Limited local value addition, supplier dependency on DPMT and limited supplier participation in tenders. Mr. Kasete highlighted the major goods and services required by his company:

• Power, coal, heavy fuel oil, light fuel oil, oxygen, lime, silica

• Refractories, chemicals, consumables

• Property, plants, equipment, spares

• Port handling facilities, logistics

• Engineering services, stationery, protective clothing

Mr. Kasete stated that as a company, Dundee had done well in terms of local procurement based on geographic scope, achieving 85% of its procurement budget done through locally procurement due to a capacity building programme in place since 2015. He explained that the company’s emerging procurement philosophy is to meet its business needs in line with the following:

• Company values

• The Mining Charter

• UN Sustainable Development Goals

• Harambee Prosperity Plan

• National Development Plan

• Healthy, Safety and Environment

• Digital – use of e-Procurement platforms for wider coverage

Mr. Kasete also revealed that the Mining Charter was implemented by the industry (Chamber members) since 2015 on a trial basis and consists of five pillars:

• Ownership: Historically Disadvantaged Namibians’ (HDN) participation as owners and decision makers – min. 5%

• Education and skills: improve education, develop the nation’s skill base and invest 2% of gross annual payroll

• Affirmative action: Ensure that HDNs are properly represented at all levels of management

• Procurement and Enterprise development: cultivate new businesses and procure from local suppliers

• Communities and Infrastructure: contribute towards the transformation and uplifting of local communities – spend 0.5% of turnover, exploration or reduced development costs over and above fiscal obligations

In his closing remarks, Mr. Kasete said “local procurement, mostly anchored in value addition in Namibia, is the most impactful avenue for mining to contribute to sustainable and broad-based economic and social transformation immediately. There are challenges that we can work together and resolve to streamline the activities.”

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A question was raised from the audience on what the company could do to logistically assist small businesses, as the mines in Namibia are widely spread out and it is challenging for local communities to get the desired product or service on time. Mr. Kasete responded by saying that the supply chain must be prepared to meet its business obligations and that there is much that can be done in partnering with courier companies to ensure that the service gets delivered within the set lead time. He reiterated that it is not the company’s responsibility to support small businesses in undertaking projects that are beyond their resources and capabilities.

Figure 8: Dundee Precious Metal Presentation (Mr. Zebra Kasete Vice President and Managing Director, Dundee Precious Metals Tsumeb)

1.1.6 Debmarine Ms. Malverene Theron, the Procurement Manager at Debmarine Namibia, gave a presentation highlighting the challenges and success stories of the company’s local procurement. In her presentation, she highlighted the following:

• Namibia has the richest known marine diamond deposits in the world and is among the top 10 producers of gem quality diamonds globally.

• Debmarine Namibia is Namibia’s leading marine diamond mining company and is a recognized world leader in marine diamond exploration and mining technology.

• Debmarine Namibia is a joint venture marine diamond prospecting and mining company, owned in equal shares by the Government of the Republic of Namibia and De Beers. Debmarine Namibia is a wholly-owned subsidiary of Namdeb Holdings (Pty) Ltd.

• The company operates six diamond mining vessels, namely Debmar Atlantic, Debmar Pacific, Gariep, Grand Banks, Mafuta and Sam Shafiishuna Nujoma (SSN).

• Two mining technologies are deployed: the airlift-drill and the crawler mining technology. The mining vessels mine diamonds off the ocean floor using highly advanced drill technology and are supported by sophisticated tracking, positioning and surveying equipment.

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• Debmarine Namibia employs 800 employees, of which about 90 are based at its head office in Windhoek and the rest are sea-going employees.

She noted the following as the challenges in relation to local procurement:

• Servicing needs from a technical and logistical requirement: because the mining operation is based offshore, it requires substantial logistical inputs.

• Price differential: local suppliers charge more for their services compared to other established international suppliers.

• Establishing relationships with suppliers: the challenge is the question of whether to develop suppliers prior to production or post-production. The mining industry has no clear directive to develop suppliers.

• Local procurement has become agenda driven and “tenderpreneur,” rather than practical (quality, on time, compliant, capacity, capability).

She also highlighted her company’s success stories:

• Debmarine has contributed to the establishment and development of Lüderitz (a town in Namibia)’s small businesses

• Local producers supply the staff’s personal protective equipment (PPE)

• Marine cages are supplied and maintained locally

• Local businesses provide offshore catering for the staff

• Aviation services are provided locally

Figure 9: Debmarine Presentation (Ms. Malverene Theron, Procurement Manager, Debmarine)

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2. PANEL DISCUSSION

After the presentations, the floor was opened for a panel. The participating panel members were Mr. Isabeau Vilandre (Director, Supporting the Ministry of Mines Ethiopia, CIRDI), Ms. Esther Mbathera (Public Relations and corporate communication, Ohorongo Cement), Mr. Barnabas Uungwangwa (Managing Director, Lithon Developers), Ms. Fudheni Ipangelwa (Managing Consultant, Twahangana HR Consulting) and Prof. Godfrey Dzinomwa (Professor, NUST). Below is a list of topics that were highlighted:

• Assisting locals with access to loans and with access bigger projects

• Forming groups or associations that will be employed by the sector

• Establishing partnerships with locals that ensure quality and transferrable skills

• Regional procurement (opening up of regional market)

• Supporting companies who want to assemble and supply components

• Investing in Research, Design and Development

• The need for policy makers and key stakeholders for the mining sector to come on board and map sustainable pathways for ensuring local procurement within the sector

• The development of formalized business ethics by local businesses

• Ensuring sustainable capacity

Figure 10 & 11: Panel Members (Mr. Isabeau Vilandre (Director, Supporting the Ministry of Mines, CIRDI), Ms. Esther Mbathera (Public Relations and corporate communication, Ohorongo Cement), Mr. Barnabas Uungwangwa (Managing Director, Lithon Developers), Ms. Fudheni Ipangelwa (Managing Consultant, Twahangana HR Consulting) and Prof. Godfrey Dzinomwa (Professor, NUST))

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2.1 GROUP DISCUSSIONSThe participants debated the short and long-term steps needed to address the gaps in local procurement. Time could not accommodate deliberations on the following:

• Incentives and non-regulatory interventions that can be used to increase local procurement, such as supplier development portals and coordination of aggregate orders

• Roles and responsibilities of different actors to address these barriers, as well as determining who has the capacity and agency to move things forward

• A discussion on how this can align with and push agendas forward (re. SDGs, local vision 2030, Africa Mining Vision, etc.)

Figure 12 & 13 : Participants contributing to the discussions

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2.1.1 Questions and comments The following questions and comments were raised as discussion points:

• There is a need to conduct a macroeconomic comparative analysis on Foreign Direct Investment (FDI) against the procurement of large capital-intensive equipment which does not bring in foreign exchange

• The percentages highlighted by the Chamber; is there any evidence on the impact on local communities?

• There is a need to publish and showcase the good work being done in Namibia, i.e. not many people were aware of the Ohorongo Cement case study

Owing to time constraints, there was not enough time to discuss these points but they were noted for action. The participants were encouraged to discuss these matters over lunch.

Figure 14 & 15: Question Time

Figure 16 & 17: Question and Answer Session

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3. CONCLUSIONS

The Forum initiated much-needed dialogue on local procurement in the mining industry in Namibia and beyond. The Forum addressed the salient issues with respect to the local procurement of local goods and services and it outlined a path forward. There are many regulatory issues that still need further refinement and it would be beneficial to continue with future forums. Forums serve as fertile ground for meaningful dialogue on matters that shape our national development discourse. Participating members in the forum added to the recommendations by outlining issues regarding logistics, information access and human skills procurement. It was recommended for universities to produce professionals who understand the economy of the country to in order to engage in better decision-making. Qualified researchers should be brought in to ensure continuous innovative research. It was also recommended to publish all milestones made in the industry for widespread access. Local procurement is a topic that must include professionals in purchasing decision-making and logistics to contribute to future dialogue.

4. RECOMMENDATIONS

The following points were seen as potential areas for further research and action in Namibia in order to enhance local procurement in the mining sector:

• Availing consistent information on procurement demands from the Namibian mining industry in order to unlock local purchasing

• Consolidating knowledge on how to foster local procurement and content at the national and local levels through policies and practices

• Establishing mechanisms for developing Community Development Agreements (CDAs) linking to Corporate Social Responsibility (CSR) initiatives

• Outlining the role of government in creating and deepening linkages and delineating the roles of other stakeholders/actors such as industry, civic society and academia

• Designing tools and methods to ensure consistency in reporting on local procurement

• Determining the percentage of what is procured locally in comparison to having local people import on behalf of the mining companies

• Interrogating the numbers provided by the Chamber in order to obtain disaggregated data on local procurement and local value creation components

• Incorporating leading practices for Supplier Development Programs (SDPs)

• Adopting leading practices for building suppliers’ networks and facilitating engagements

• Adopting leading practices for establishing suppliers’ portals

• Exploring non-regulatory interventions and incentives for local procurement

• Creating professionals servicing the mining industry and the development of an appropriate regulatory framework to regulate the quality and performance of professionals

• Developing appropriate and relevant training that builds the capacity to include local factors gradually and systematically

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• Determining the practices most conducive to enabling the growth of the sector while incentivizing the emergence of local entrepreneurs

• Establishing a Steering Committee to champion local procurement in mining involving government, mining industry through Chamber of Mines and the procurement managers, Chamber of Commerce and Industry, academia and civil society.

• Discussing the incentives and non-regulatory interventions that can be used to increase local procurement, such as supplier development portals and coordination of aggregate orders

• Discussing the roles and responsibilities of different actors to address barriers in local procurement as well as who has the capacity and agency to move things forward

• Discuss how this can align and push agendas forward (re. SDGs, local vision 2030, National Development Plan 4/5, Africa Mining Vision, etc.)

• Reporting and Monitoring local procurement

• Developing industry, government and university linkages to support Research and Design for local solutions and the development of adapted technologies that can be supplied locally

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5. APPENDICES: PHOTOS

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