Many mining operations are located in rural areas, where the population is predominantly dependent on social grants due to widespread poverty and unemployment. Alongside pockets of poverty, these areas also have high service delivery backlogs in water and sanitation. In some cases, private sector collaborates with government or its agencies to address these challenges. An example of such collaboration is the Municipal Capacity Development Programme (MCDP), a partnership between the DBSA and Anglo American, which focused on building stronger communities that work together in the mining operations and/or labour sending areas. This partnership is governed by a memorandum of agreement signed with Anglo American South Africa (AASA) in 2011 and another with the Investment Climate Facility (ICF) in 2014.
Objectives of the programme
The MCDP aims to build the requisite capabilities and enhancing the ability of municipalities in Anglo American’s mining operations and labour sending areas to provide basic services. In addition to that, the programme also focused on improving the investment climate for these municipalities to attract new business opportunities that would improve the local economies.
The programme focused on training and hands-on skills transfer; supporting municipalities to develop systems, processes and plans; promoting stable municipal management systems; increasing the investment climate and encouraging municipalities to efficiently manage social and economic matters. The initiatives were in the municipalities of Rustenburg, Greater Tubatse, Moses Kotane, Mogalakwena, Thabazimbi, Tsatsabane and Emalahleni. The programme was funded by AASA’s business units, namely Kumba Iron Ore, Thermal Coal and Anglo Platinum.
Over R120 million was invested in the programme that ran over a three-year period. In addition, the ICF pledged R25 million to support initiatives in the platinum producing towns during the same period.
Development outputs and impact
Key to the programme, was the water and electricity loss management initiatives that were implemented in four of the supported municipalities.
The DBSA was able to reduce the electricity and water losses during 2016 as follows:
- Ga-Segonyana’s electricity loss was reduced by 19%
- Rustenburg realised an 11% reduction in electricity loss
- Moses Kotane achieved a 31% reduction in water loss
- Thabazimbi achieved a 22% reduction in electricity loss.
During 2017, the programme managed further reductions in the four municipalities to achieve the following outputs:
- an average of 11.6% improvement in revenue collection
- an average 11.7% improvement in water and electricity losses.
- Over the three years of the programme,
- 2 506 water meters were replaced
- 407 electricity meters were replaced
- 26 infrastructure master plans were completed
- 500 municipal officials were trained in areas such as water and electricity meter replacements, pothole repairs, meter physical verification, operations and maintenance, budgeting and planning as well as call centre management
- 205 employment opportunities were created, with 58 SMMEs benefitting from the programme.
Feedback from beneficiaries
The Anglo American MCDP Model has been supported and commended by government key stakeholders. The governance structures, monitoring committees at various levels and close working relationships established with targeted programme beneficiaries, indicated that the model can be replicated to other mining towns and other private partners to achieve meaningful development impact.
- Greater Tubatse local municipality reported that the revenue enhancement intervention has contributed to 75% recoveries
- In Mogalakwena local municipality the MCDP initiative benefited the municipality through the reinforcement of forward planning, improved stakeholder relations, enhanced revenue and refocused the strategic intent of the municipality from the projects that were implemented
- The Mayor of Tsantsabane local municipality expressed his appreciation to the DBSA and Kumba Kolomela Mine for the initiative as this will take the municipality to another level
- Ga-Segonyana local municipality acknowledged that data cleansing and training of officials has helped the municipality to address billing issues.