We believe in the capacity of communities to innovate. Our experience tells us that enterprise development programmes are vital if communities are to have a chance to share in the socioeconomic benefits generated by mining companies.
Traditionally, the approach to deliver socioeconomic benefits would be through grants. Although social investments like this are sometimes the only sensible way to support a community, donations may reduce incentives for the community to be independent. This not only reduces the capacity of the community to deal with their own needs but also increases costs for companies.
A more strategic way of delivering socio-economic benefits is through enterprise development programmes. This provides financial, technical and implementation support to local small and medium size enterprises (SMEs). Importantly, enterprise development schemes respond to the strengths rather than the weaknesses of host communities – for example, their capacity to innovate and their potential to create value.
Our global enterprise development schemes have supported nearly 65,000 jobs to date, helping ensure long-term sustainable benefits in host communities. In the coming year, we’ll be expanding our schemes beyond South Africa and Chile to Botswana, Brazil and Peru. We are also applying the concepts of Enterprise development to areas such as housing and low carbon technologies.
Zimele - South Africa
Our flagship enterprise development programme was established in South African 24 years ago to empower black entrepreneurs through the creation of small and medium-sized enterprises (SMEs).
Zimele consists of four separate funds – the Supply Chain Fund, the Anglo American Khula Mining Fund, the Community Fund, and the Zimele Green Fund. The funds operate on a commercial basis, albeit with the social purpose of creating sustainable and economically viable enterprises by providing equity/loans, mentoring and access to value-enhancing opportunities.
Through our commitment to the United Nations Development Programme (UNDP) Business Call to Action in support of the Millennium Development Goals, we have achieved our target of creating and sustaining 25,000 jobs – well ahead of the 2015 target date. At December 2012, our 1,393 funded businesses employed 25,364 people.
Our newest fund, the Zimele Green Fund, targets investment opportunities that mitigate greenhouse gas emissions, reduce energy and water consumption, and improve waste and emissions management. The fund’s current portfolio includes three businesses, which involve waste recycling; the manufacture and sale of organic fertiliser by disabled workers; and the facilitation of subsistence vegetable cultivation among impoverished communities.
The Jobs fund will be launched this year and will mirror what has been achieved with the Community Fund. It will increase the size of our network of hubs to nearly 60 hubs. In this initiative we are partnering with the Government of South Africa to bring our enterprise development technology to areas were we do not have mining operations. In this way, we will support SMEs within and outside our supply chains but also within and outside our mining operations.
Emerge - Chile
Launched in 2006, our Emerge programme in Chile has surpassed its goal of supporting more than 7,000 entrepreneurs and SMEs in Chile. Through partnership with Fondo Esperanza, the programme has helped more than 340 medium-sized businesses. To date, over 35,534 jobs have been supported through the programme. The community bank model – in which members run their own businesses and act as co-guarantors by committing to pay back all the loans – has delivered exceptionally high loan repayment rates.
In 2011, Emerge was expanded through a new partnership with international enterprise development NGO Technoserve, with the aim of helping small-growing businesses mature to the point where they are able to access the commercial banking sector. Emerge’s offering is now much more customised to the specific needs of the different SMEs in the programme, which we hope will attract more participants and improve their performance.
Emerge has recently redesign its strategy customising its offering to the specific needs of micro, small-growing and medium size SMEs. The result is a larger number of SMEs been supported at a much efficient cost per job rate which allows Emerge to have a much larger and meaningful impact.
Tokafala - Botswana
Anglo American, in partnership with the Government of Botswana, De Beers and Debswana, has established and implemented an enterprise development programme in Botswana known as “Tokafala” in order to foster the growth of commercially viable micro, small and medium-sized businesses initially in and around Gaborone. Tokafala aims to overcome the challenges entrepreneurs face in Botswana in establishing commercially viable businesses, which include: limited entrepreneurial skills, limited effective mentoring support, restricted access to finance, limited market access, and low competitiveness of local offering. Over 3 years the Tokafala programme aims to:
- Support 560 micro and 420 small & medium enterprises
- Support 5,400 to 5,600 jobs
- Provide capacity building to government enterprise development institutions
To ensure sustainability, the Tokafala programme will actively seek out collaboration opportunities. For example, in order to ensure market access, Tokafala will not only focus on the supply chains of De Beers, Debswana, and the Government of Botswana, but will also leverage the opportunity to establish market linkages with other private sector companies that are interested in integrating SMEs in their supply chain.
Tokafala has commenced operations in Gaborone but the programme also envisages to move into rural locations.
Tokafala has been structured as a 50/50 joint venture with the Government of Botswana.
CARE - Brazil
Our Barro Alto project in Brazil has completed the final year of a three-year community development plan with NGO, CARE Brazil. Entrepreneurship courses form a strong focus of the partnership, which also included activities to improve public education and social development in the communities surrounding our operation. Local residents have been encouraged to take part in a free entrepreneurial management course aimed at developing business ideas and opportunities in the region. The third group of small business owners has now completed the course.