Orion Minerals, 2023 Africa Award Winner – Emerging ESG Leader for an Explorer/Developer
By AAMEG | 8 August 2023
A former Emerging ESG Leader 2020 AAMEG Africa Award Winner, Orion Minerals (Orion) is a globally diversified metal explorer and developer.
Orion Minerals is on track to become a new generation base metals producer through the development of its flagship Prieska Copper-Zinc Project (Prieska Project); and its near term Okiep Copper Project, both located in South Africa’s Northern Cape Province.
Orion operations will be based on a modern, 4IR driven, safe, energy efficient mining approach that targets a net zero carbon footprint within 10 years of commissioning.
In 2022, Orion investigated ways to fast-track production at the Prieska Project to take advantage of soaring base metals prices.
The Early Production Plan envisions bringing production from the planned open upper ‘105 Level’ resources while dewatering of the main shaft gets underway. It also considers remnant pillar mining to bring early cash into the business.
This incremental mine development approach and shorter lead time attracted investors. Orion has since secured funding from the South Africa’s IDC (AUD21m) and Canada’s Triple Flag (initial USD10m).
In early 2023, Clover Alloys became a cornerstone equity investor in Orion and a strategic partner by joining existing shareholders to raise equity investment funding worth up to A$73 million.
Between 2020-2022, expectations from the host community – in an impoverished area without many employment opportunities nor an established mining supply nor skills base – were vocalised and the Company adapted to manage these during a period of limited operational activity and limited funding.
In April 2021, as South Africa built up to Local Elections, political and business interest groups purporting to be from the host area fermented community disturbances and disruptions, which at times turned violent.
The claimed objective was to address the perceived exclusion, or under-representation, of host communities from employment and business opportunities expected to come from existing and planned projects in the area.
South Africa’s Mineral and Petroleum Resources Development Act and Mining Charter specifically address transformation, and the redress of historical imbalances, in terms of employment of Historically Disadvantaged South Africans (HDSAs) and procurement from black enterprises.
Over and above these regulatory requirements, Orion’s early adoption of ESG practices, its inclusion of regional and local governmental engagement, and its direct interaction with communities meant it was able to formulate a framework that can be applied across its operations to create a sustainable mining ecosystem for host communities and serve as a model for other junior mining companies.
INITIATIVE: COMMUNITY PARTICIPATION FRAMEWORK, STAKEHOLDER ENGAGEMENT IN SOUTH AFRICA
For their nomination, Orion Minerals highlighted the political landscape in which they operate. They demonstrated their consultative journey to creating the Community Participation Framework (CPF), the first of its type among junior mining companies operating in South Africa. Their hope is that the CPF is a model for community engagement and participation that can go a long way to stabilising relationships with those who live close to, and often depend, on mining operations.
ROCKY POLITICAL AND SOCIAL LANDSCAPE LED TO CONSULTATION
- Following the community disturbances, with the support of the Regional Department of Mineral Resources and Energy (DMRE) and the office of the Premier of the Northern Cape, Orion initiated a two day independently facilitated workshop in October 2021.
- The workshop participants comprised 35+ participants from host community stakeholder groups including Orion’s own Stakeholder Engagement Forum (SEF), local business chambers and the Siyathemba Local Municipality.
- The workshop resulted in a commitment by all the participants to work towards aspirational targets of 50 per cent host community employment, 30 per cent host community procurement and 40 per cent contracting opportunities at the Prieska Project.
ESTABLISHMENT OF A TASK TEAM & CLOSE OUT REPORT
- At the meeting, areas of collaboration were identified which would benefit all and strengthen working relationships in Siyathemba.
- Under the guidance of the independent social facilitator, a task team was established comprising representatives of the community, business chambers and Orion management.
- The Task Team was responsible for developing an implementation and monitoring plan to promote host community employment and procurement in the Siyathemba Local Municipality, which includes the towns of Prieska, Niekerkshoop and Marydale, and the neighbouring town of Vanwyksvlei, which is located in the Kareeberg Local Municipality.
- The Task Team met regularly during 2022, including one meeting held at the Prieska Mine site, which included an underground visit.
- The work of the Task Team culminated in the publication and circulation to all stakeholders in April 2023 of a close out report that established the “Community Participation Framework” through which the employment and procurement aspirational targets will be achieved by Prieska Project.
- Orion anticipates that the framework will create the opportunity for local small enterprises to grow as standalone businesses or via joint ventures with larger established suppliers.
MINING FAMILIARISATION INITIATIVE FOR HOST COMMUNITY
- After consulting with communities and municipal authorities in 2019, Orion began preparing the community for the development of a mine at Prieska.
- The Company initiated an introductory mining familiarisation short course within the host community towns, raising public awareness of the mining industry and the opportunities it creates.
- Orion offered the course free-of charge to interested and engaged residents, on their new CV database, in the towns of Prieska, Marydale, Niekerkshoop and Vanwyksvlei who had completed their Grade 12 (school leaving) and had an interest in mining.
- Training was facilitated by an accredited local service provider and participants earned credits towards industry-recognised mining-related qualifications.
- The initiative was exceptionally well received and was the first step in educating the host community to equip them to participate in future mining-related opportunities – not just at Orion but at other mining operations in the region.
GENERATING MINING JOB-READY LOCAL CANDIDATES
- Community members who completed the introductory course were invited for Occupational and Operator Assessments to determine suitability for future artisan and operator roles.
- 110 participants from the host communities have so far been assessed using the Dover Test is used to test candidates’ natural ability to operate certain machinery, which helped Orion select candidates who could be considered for further development and possible employment at the mining operations.
- While it is estimated that less than 1,000 people will be employed during the operational phase of the Prieska Project, the empirical multiplier effect suggests the potential creation of an estimated 2,500 associated jobs. More employment is likely through the creation of opportunities for local entrepreneurs, the development of mine support services and the stimulation of related synergic industries but this alone is not enough to tackle the socio-economic challenges faced by the region.
CREATION OF SUPPLIER PORTAL & REGULATION STANDARDS
- Orion established an online Supplier Portal to allow businesses interested in doing business with the Company to register. This portal also allows Orion to manage specific expressions of interest and identify host community enterprises with the potential to be developed to participate in the future mine supply chain.
- Orion set out to establish a clear procurement policy and accompanying procedures.
- All parties interested in working with the Company must commit to the following non-negotiable “Golden Rules” of procurement engagement: 1) all procurement decisions are based on the principle of value for money; 2) suppliers must be procurement-ready and able to deliver on the mine’s requirements; 3) Orion Minerals’ code of conduct must be observed; 4) suppliers must comply with all statutory requirements and standard of ethics expected of all the mine’s employees and suppliers.
- Orion to regularly provide updates to host community businesses on procurement opportunities that could arise in the next three to five years.
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