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Procurement and tenders
Preferential procurement practices
Exxaro continues to follow the narrow-based standard for mining houses in reporting expenditure with historically disadvantaged South Africans (HDSAs). Hopefully, this statutory anomaly can be addressed in the mining charter review scheduled for 2009 to deal with conflicting legislation specific to the mining industry (codes of good practice from Department of Trade and Industry (dt) versus stipulations of Department of Minerals and Energy). The availability and capacity of rating agencies verified by the South African National Accreditation system remains a challenge in transforming the supplier industry.
Exxaro has policies, guidelines and systems in place to promote procurement from HDSA companies in the stipulated categories of capital goods, consumables and services. As a group, we have long given preference to companies that demonstrate HDSA involvement, development and support in ownership, management and skills development.
Over the years, we have tracked our performance on procurement from HDSA companies, which indicates good progression from 2004 at 16%, 2005 (24%), 2006 (37%) and 2007 (35%). The target for 2007 was specifically set at 35% to provide for the introduction of the dt’s codes of good practice. The performance for 2008 was a commendable 39% against a target of 40%, influenced largely by the transition to the dt codes. In rand terms, this represented R2,36 billion spent with HDSA-owned, -empowered and -influenced companies. The target for 2009 is set at 45%.
Close monitoring, tracking and stakeholder engagement continues to ensure strong partnerships with suppliers. Exxaro’s major suppliers are encouraged to transform, and secure accreditation in line with the codes of good practice, but with an indication of their narrow-based status. In line with Exxaro’s future expenditure, companies that are likely to have increased and longer-term business relationships with the group are viewed as strategic partners for transformation. These suppliers are encouraged to form partnerships with local HDSAs in areas of group operations. We also encourage transformation in areas such as employment equity, skills development, enterprise development and employee share ownership plans. Accurately tracking spending on suppliers by category – as required by the mining charter – remains an industry wide challenge. The targets shown graphically are annual percentages, and reporting is in line with the current mining charter. |
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For more information about the Exxaro preferential procurement programme and process, contact:
Pieter Venter, General Manager, Supply Chain Management on (012) 307 4382
or email pieter.venter@exxaro.com
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