The new 2017 Mining Charter highlighted the changes needed to occur in the industry to increase compliance thresholds for ownership, management and control of the holders of mining and prospecting rights.
The new version will have a significant impact on mining sector service providers.
According to the chart, mining rights holders must now ensure that at least 80% of their total spend on services is sourced from South African companies.
It means mining right holders have to increase their compliance with procurement requirements devised in the Charter to 80% from the current level of 63% achieved in 2016 and previously stipulated under the 2010 Charter.
However, the 2017 Charter does contain transitional arrangements, which give mining companies three years to align procurement spend with the new requirements.
Supply Chain Partner director, Chimae Gonclaves, agrees that the pressure on procurement compliance requires a strategic review of procurement systems and practices.
Resolve Immix leverages the Microsoft Dyanmics 365 technology to provide mining specific software across a variety of modules. Other investments in Microsoft’s software are also leveraged providing a reduced cost of ownership.
She indicates that the process is far more complex given the industry measurement of procurement, the often-incomplete data on vendors, and inaccuracies in reporting.
Furthermore, there is no clear indication of the availability of mining suppliers with the level of detail required by the new Charter, making supplier tracking an even more difficult process.
Beyond compliance, cost-effective solutions are also needed to harness value in the procurement process, which is not always the case in an industry highly focus on production mining output and less on saving costs, despite the vital role of procurement itself for the organisation.
According to Gonclaves, procurement departments often lack resources, technology and leadership to address efficiency and compliance, which requires an industry-wide transformation.
The solution? Cloud procurement can enable collaboration with suppliers, address system inefficiencies, and streamline processes across suppliers, buyers and users in the mining industry.
Such cloud-enabled integrated procurement systems can further facilitate the required compliance stipulated in the new mining charter. Resolve Immix’s software provides extensive exploration, Mining, and Mineral Process (xMMP) solutions for key mining requirements, including functionality required for nearly all of the Total Life of Mine (LOM) requirements.
Microsoft Dynamics AX serves as the platform for the xMMP product suite and is a world-class global Enterprise Resource Planning (ERP) solution used by over 20 000 businesses across the globe.