Our operations are in rural communities and face difficulties from poor infrastructure, limited economic opportunities and skills shortages preventing employability of local people.

A significant portion of our operating costs are attributable to sourcing goods and services for our mines. At our operations we aim to use the procurement process as a way of reaching local would-be suppliers so as to make a more immediate economic contribution to our host communities. Our approach to procurement is underpinned by the principles of inclusivity, transformation and transparency in line with South Africa’s Mining Charter.

By identifying procurement opportunities that support these principles at various levels of the South African economy, we aim to transform and diversify our supplier base. Our primary focus is on community-based enterprises in our host communities and other areas affected by our operations.

Using procurement to support disadvantaged groups

Fundamental to our approach is sourcing from South African suppliers owned and run by historically disadvantaged persons (HDPs) and black economic empowerment (BEE) compliant companies. All suppliers need to meet the requirements of our vendor governance systems and newly developed responsible sourcing standard.

Our approach has delivered a 200% increase in HDP procurement over the last five years, increasing from R3.2 billion in F2018 to R10 billion in F2022. Procurement spend with HDP suppliers makes up 77% of Northam’s discretionary spend¹.

¹ Discretionary spend is total procurement spend less spending on government institutions; sponsorship; payment for utilities (i.e. electricity; water; municipality rates and taxes); academic institutions; payments towards employees’ insurances; medical aid; and any other payments regarded as pass-through payments.