The Sunday Mail
Business Reporter
Government has encouraged mining companies to source their supplies from local companies and only consider imports where local companies are not able to supply the specified goods or services.
Chamber of Mines president, Mr Toindepi Muganyi, who is also the managing director of Freda Rebecca Mine, told a Buy Zimbabwe local procurement conference in Harare on Thursday that local suppliers should focus on the specific areas that they can manage and start with the low-hanging fruits.
The local mining industry presents opportunities in drilling, construction, garment making, engineering and catering.
Experts say local companies usually supply trending products, thereby compromising their ability to provide specialised services.
They also argue that some are also failing to meet timelines while others are selling at uncompetitive pricing and supplying poor quality products and services.
But according to Mr Muganyi, Freda Rebecca has over the years been working with local suppliers of consumables as a way of promoting local procurement and empowering the community.
Their transport needs are outsourced to local businesses in Bindura, while an estimated $1,3 million has been spent on local caterers for canteen services in the past three years.
In a speech read on his behalf, Mines and Mining Development Deputy Minister Engineer Fred Moyo noted that mining companies have not been adequately using local suppliers.
“Local procurement creates jobs, lowers costs and contributes to economic growth apart from increasing relations between companies and local communities,” said Engineer Moyo.
University of Zimbabwe senior lecturer in the Economics Department, Dr Albert Makochekanwa said there is a compelling argument for local procurement in mining.
It is believed that in 2015, coal mining companies procured more than 70 percent of their needs offshore; while the gold, diamond, nickel and platinum sectors bought 75 percent, 90 percent, 80 percent and 75 percent respectively.
However, Dr Makochekanwa highlighted the issue of local suppliers who only serve as foreign manufactures’ agents.
“Companies who do real manufacturing are the ones that should be given first preference,” he said.
Local suppliers argue that they have the capacity to meet local demand. However, most of them are still hamstrung by lack of capital.
Mr Matthew Sibanda of Bolt Gas said local suppliers need to invest in their capacity to be able to handle big projects.
“Most of us get a lot of opportunities in the mining sector. The question is what do we do with returns from those opportunities so that we grow our companies and handle bigger projects efficiently,” he said
