Offering reliable and innovative solutions, such as bulk materials handling contracts, to the mining sector is key for small, medium-sized and microenterprises (SMMEs) operating in the demanding mining industry of South Africa, says mineral processing company Otsile Kaelo Mineral Processing CEO Marcia Machuba.

Amid the company having secured a materials handling and process plant operation contract with midtier coal miner Ndalamo Resources’ North Block Complex mine, in Belfast, Mpumalanga, she notes that there are still opportunities for SMMEs in the mineral processing sector, especially if they can offer plant services and technology-based solutions.

“The key is finding a niche where you can offer reliability and innovation because many mines are looking for a partner with agile and responsive businesses that can provide solutions that fit into their working structure or supply chain.”

Working with Ndalamo Resources has “pushed the company to raise its game” in every aspect, states Machuba, adding that being a part of Ndalamo Resources’ supply chain has provided Otsile Kaelo Mineral Processing with visibility and credibility that would otherwise be difficult to establish.

The partnership has also validated Otsile Kaelo Mineral Processing’s ability to deliver in high-pressure environments, she enthuses.

SMME Challenges

Machuba says the biggest challenge for SMMEs in the mining industry is the lack of capital and access to opportunities. They are not able to be competitive because of finance constraints.

Unplanned downtime, such as machinery breakdowns are an additional hurdle for SMMEs as this has a direct impact on deliverables.

As such, she advises that a company should always have in place alternative measures – such as having back-up machines and conducting preventative maintenance – to ensure that machines are always ready for production.

Meanwhile, rising inflation affects many SMMEs, as operational costs continue to increase while contract rates remain fixed. As production levels remain the same, the income derived from contracts does not keep up with escalating expenses, which places pressure on cash flow and profitability, Machuba adds.

She suggests that mining industry SMMEs should try to maintain low operating costs so that any market fluctuations have less of an impact on operational overheads and remaining profitable.

A significant barrier to entry in the mining SMME space in South Africa is access to funding. While this remains a challenge there are companies that provide grants for small companies, helping them with the sourcing of equipment and offering favourable terms such as competitive interest rates or cost structures for renting or buying machines.

Machuba advises that SMMEs remain resilient and continuously invest in learning, consequently bolstering their ability to be ready for projects when opportunities arise.

“Mining is dynamic. Your ability to be flexible and to help clients meet their key performance indicators is essential. The flexibility to learn new things and bring in new systems to assist your client is important for upscaling and staying operational,” she concludes.