FQM CONTINUES DRIVE TO BOOST LOCAL PROCUREMENT
The company’s flagship Kansanshi mine procured US$9.172 billion of goods and services in Zambia from 2011 to 2016, of which US$378 million was spent in North-Western Province. This definition includes foreign national companies with Zambian subsidiaries. Sentinel mine procured US$2.062 billion of goods and services in Zambia from 2011 to 2016, of which US$480 million was spent in North-Western Province. In 2017, the company formalised and trained 83 local businesses from Musele Chiefdom at Kalumbila mine’s Trident Foundation. The candidates were selected by a village-level roadshow with Musele Chamber of Commerce, offering business formalisation, training and selected micro-loans to local entrepreneurs.
Mr Gladston explained that the main principle of FQM’s Local Business Development Policy was the systematic and on-going transfer of procurement of goods and services to local suppliers, and that the company was establishing a set of procedures to ensure that the policy was translated into action. “It is however important to note that First Quantum expects quality and competitiveness, and at no stage shall this be compromised in the local procurement process. The company is encouraging Zambian businesses to focus on areas where they have competitive advantage and increase their manufacturing base. Because we have observed that most small and medium enterprises narrowly focus on being traders, with very minimal profit margins,” he said.
Mr Gladston added that company was still awaiting approval of the Kalumbila Multi-Facility Economic Zone (MFEZ) in order to create secondary economic development near its mining activities, with the objective that sufficient growth takes place during the life of the mines so there is a big enough secondary economy to continue after their closure. He added: “The promise of the new multi-million-dollar economic zone is set to boost trade and jobs in North-Western Province as part of our efforts to help Zambia attract further local and foreign direct investment. And we will remain committed to giving equal and fair opportunity for local businesses to participate in the company’s supply chain. “The multi-million-dollar Kalumbila economic zone has attracted the interest of numerous investors, ranging from mine supply, manufacturing, construction, retail, hospitality, finance, warehousing, food processing, catering and other service industries. “Manufacturing, agriculture and labour-based services are opportunities. North-Western Province is rich in resources and provides many opportunities for efficiencies to be gained by local production, due to the location and high cost of transport. Businesses are encouraged to look for opportunities to produce local goods and generate economies by reducing transport costs.” Local business development and procurement have long been a priority for the company and are key focuses in the mining firm’s development agenda. Mr Gladston said: “Challenges extend far beyond the procurement practices of mining companies, and include cost and productivity of labour, access to capital which is largely dependent on surety for banks which is primary caused by challenges in obtaining land title, absence of incentives, tax rates and tax rate instability, the low manufacturing base. There is a lot of potential for Zambian businesses, but to maximise the opportunities requires concerted effort from all sectors.”