Zimbabwe's mining boss supports local sourcing

2 December 2010

2 December 2010 | Nick Martindale

The president of Zimbabwe’s Chamber of Mines, Victor Gapare, has called on its members to buy products and services from local companies.

In an interview with SM, Gapare said such a policy could develop the country’s economy and lead to lower prices for both buyers and suppliers.

“Encouraging local procurement is important for economic growth and the creation of jobs and employment,” he said. “But it makes commercial sense to source locally because this reduces the lead time required when sourcing goods.

“A miner will not have to keep three or six months‚ stock in his stores if he knows the local supplier can supply within a shorter time period, therefore reducing working capital tied up in stores and spares.

“As local suppliers improve their efficiencies and quality, costs are bound to come down,” he said.

The Chamber of Mines estimates that expenditure on local procurement will increase from US$150 million (£97 million) in 2009 to US$300 million (£193 million) in 2010, as the local economy begins to grow.

“We are also encouraging mining companies to work with local suppliers and help them achieve the quality and cost competitiveness required,” said Gapare. “This used to happen in the days before the collapse of the local supply industry so it is not a new issue.”

Otis Rumumba, purchasing manager at Hwange Colliery Company, said that around 90 per cent of his company’s products and services were already sourced locally. “The other 10 per cent consists of specialised mining machinery and spares with no local distributors,” he said. “We also import when the landed price of imports is cheaper, especially when the difference is significant.”

Local suppliers could also perform better than more established companies, which tended to be more rigid and have less understanding of customer requirements, he added.

Nyasha Chizu, CIPS Zimbabwe branch chair, said a long-term solution would be to encourage equipment manufacturers from overseas to invest in facilities within Zimbabwe.

“If the technology is imported and local products from mining are used in these plants, prices for equipment will inevitably reduce,” he said.

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