04 Aug 2021

Outsourcing of services by Debswana is done on an ongoing basis relative to company requirements and available services in the private sector, particularly from citizen owned companies, Parliament heard Tuesday.

Answering a question in Parliament on Tuesday, Minister of Mineral Resources, Green Technology and Energy Security, Mr Lefoko Moagi explained that Debswana had, in 2010, rolled out an outsourcing programme that led to outsourcing of non-core services.

“Since 2014, Debswana has awarded 1 249 contracts, inclusive of orders, valued just over P10 billion to citizen-owned companies,” Mr Moagi said.

He added that the 2010 outsourcing programme led to the outsourcing of services such as security, catering, township maintenance, landscaping, electrical and mechanical maintenance and hospitality. 

With regard to the CUT 9 transition, he said there were approximately P2 billion worth of packages as a result of the unbundling of the Majwe contract, out of which seven contract packages were awarded to 100 per cent citizen companies,

“Two are at procurement stage, targeting 100 per cent citizen companies due to be awarded in the fourth quarter of 2021 and the balance of three are Original Equipment Manufacturer (OEM) contracts and citizen impact therein shall be achieved through the overall OEM CEEP transformation strategy and commitment to the repairs and rebuild centre,” he said.

He also indicated that contracts awarded under CUT 9 covered services in the areas of drilling, tyre maintenance, cleaning, catering, and equipment hire.

He added that additional contracts to be awarded in the near future included labour services, crushing, dust suppression, clinic and ancillary equipment maintenance.

Parliament also heard that Debswana currently did not have classification in terms of women ownership and youth ownership.

“The Citizen Economic Empowerment policy is currently under review to align to the anticipated economic inclusion legislation and these classifications will be included in the revised policy. We do have women and youth owned companies participating in key outsourced services contracts which include labour brokering services, cleaning services and provision of refrigeration maintenance services. Youth and women participation is also dominant in the creative services including advertising, event management among others,” he said.

The minister also told Parliament that in the period since 2014, Debswana had awarded 1 698 contracts to foreign owned companies, out of which 508 were awarded to Botswana based companies. He said 982 contracts, inclusive of orders, were specific to the Jwaneng Mine. 

The services provided by foreign companies include specialist services and products such as supply of ore processing chemicals (ferrosilicon) and flocculants, supply of tyres and conveyor belts, supply and maintenance of earth moving equipment, specialist technical consultancy services for mining expansion projects.”

Further, he indicated that Debswana had signed and implemented a Citizen Economic Empowerment policy in 2017, which led to the establishment of a fully resourced CEE office in 2019 that is mandated to implement, enforce, monitor and evaluate creative empowerment initiatives. 

The office currently runs the Debswana Citizen Economic Empowerment Programme (CEEP).

Again, he said the Debswana CEEP programme aimed to deliver shared citizen spend value of P20 billion and 20 000 direct jobs by 2024.

He said the 2021 key breakthrough actions for the programme included continued localisation of Debswana’s long term contracts, unbundling of Cut 9 contract packages to benefit the broader citizen community, development of citizen participation in the supply and transportation of fuel and development and support of locally manufactured products in the mining sector. 

It also included delivering on a transformational plan that would create opportunities for citizen ownership participation in the OEM sector and import substitution focusing on manufacturing and services.

To date, he said through the Debswana CEEP-Supplier Development Programme and in partnership with local commercial banks, a total of 46 suppliers had been assisted at a total contract amount of P1.8 billion for the period 2020-2021 year to date.

“This initiative has improved citizen participation in some technical services like conveyor maintenance services, crushing services, drilling services and tyre maintenance services.”

Reporting progress on the creative supplier development initiatives implemented by the company, he said they included localisation of long-term contracts, Debswana’s collaboration with Botswana Oil in exploring models of delivery in the supply and transportation of fuel with a view to positively impact the security of supply, price optimisation and citizen economic empowerment through creation of opportunities for citizens in the fuel and logistics industry.

“Negotiations between Debswana and Botswana Oil are ongoing and the project is set to commence before the end of 2021,” the minister said.

Mr Moagi also reported on progress on import substitution and local manufacturing-phase one of local manufacturing, which he said was deemed feasible on 10 commodities in 2021 at an estimated contract value of P751 million with an expected 954 job opportunities.

“These are products that are used at various stages in our mining value chain from chemicals to plant equipment. The products will undergo the necessary test and pilot stages to ensure quality and safety levels paving way for a full mine wide application. The targeted services are flocculants, ferrosilicon, rollers and idlers, bulbs and lights and lubricants,” he said.

He also indicated that engagements were ongoing with OEMs on 30 per cent citizen ownership transformation and local procurement, which aimed to create an opportunity for utilisation of citizens’ investor capital in the mining industry and consequently participation in the diamond upstream value process.

“Commitment to local procurement and utilisation of local workshops by OEMs shall be driven through the establishment of the Repair and Re-build Centre. The OEMs will be given reasonable time up to December 2022 to transform,” he said.

Jwaneng-Mabutsane MP, Mr Mephato Reatile had wanted to know the number of local companies that had been awarded tenders since the outsourcing of services by Debswana Jwaneng Mine.

Mr Reatile also wanted to know the areas of services local companies were actively participating in as well as the number of women and youth companies actively engaged at Debswana and the types of services they provide.

He further wanted to the number of foreign companies engaged at Debswana and the services they provided. Ends