AAMEG Africa Awards 2020: Workforce and Industry Development Nominee – Base Resources

DEVELOPING KENYA’S MINING WORKFORCE

Company Description

Base Resources is an Australian based, African focused, mineral sands producer and developer.

Base Resources was founded and listed on the ASX in October 2008. The Company listed on the UK’s AIM in 2013. The Company operates the Kwale Operation in Kwale County, Kenya, and is developing the Toliara Project in Toliara, Madagascar.

Base Resources produces a suite of mineral sands products namely ilmenite, rutile and zircon. Base Resources is recognised as a leader in the African resources industry with a track record of excellence in safety, community engagement and environmental stewardship.

Initiative Description

Base Resources Kwale Operation is located 10 kilometres inland from the Kenyan coast and 50 kilometres south of Mombasa, the principal port facility for East Africa. Prior to the development of Kwale Operations there were no large-scale mining operations in Kenya.

The Company acquired the project in 2010 and started construction on the Kwale Operation in 2011. Mining operations commenced in October 2013 with the first shipment leaving the Company’s dedicated Likoni Port facility in February 2014.

The initial investment to construct Kwale Operation, and all the associated infrastructure, was US$350m. Two subsequent upgrades to increase mining and processing rates and to access a new ore body resulted in an additional investment of over US$37m.

Base Resources has adopted world-class, sustainable business practices at Kwale seeking to maximise the positive outcomes of its operations for its employees, its host community, the environment and the Kenyan Government. This has included prioritising local employment, workforce development and an annual investment in community and environment programs of US$3.4m.

Base Resources strives to build lasting and beneficial relationships with its communities. We work together in a way that allows broad participation of local people and demonstrates our long-term commitment to deliver real, tangible and sustainable benefits to the wider community and host nation.

Local Content

Base Resources is committed to prioritising employment for local community members. The Company utilises an employment system that is specifically designed to maximise employment opportunities and project benefits for local communities by giving preference to those residing in the immediate environs of the mine.

Through a ‘fencing system’, established in consultation with governments and local communities, progressively lower priority is given to those living further away from the mine. This system has proved highly effective and, of the 1,140 people employed by Base Resources, 70% are drawn from the local Kwale County. A further 28% are Kenyan nationals. The Company is on track for a targeted 99% Kenyan national workforce by late 2020.

Base Resources has a commitment to source services and supplies from local businesses. Our procurement process identifies any local supplier who can meet the stated requirement. If a local supplier cannot be found then a national supplier is sought, and given preference, before international suppliers are considered. In reviewing national suppliers, we also consider their use of local (to the mine site) content including their local employees. This focus on local suppliers and employees helps to keep cashflow within the local economy. In the 2020 financial year Kwale Operations sourced ~65% of its services and supplies from Kenyan providers.

Ultimately there are finite employment opportunities at Kwale Operations so Base Resources has established extensive community programs to ensure the benefits of the mine can be shared as widely as possible for as long as possible.

These programs were established following guidance from community committees comprised of representatives from the Company, local communities and governments. There are over 140 community programs surrounding Kwale Operations and the Company’s Likoni Port facility, including:

• Livelihood Programs – aiming to ensure that the positive economic impact of our operations are felt far beyond our employees. Base Resources supports numerous agricultural based livelihood programs, like the Kwale Cotton Project, that are intended to be the engine room for sustainable community development, outlasting the life of the mine. Over 3,000 smallholder farmers are participating in these programs to encourage sustainable and viable farming
• Community Infrastructure – Base Resources has supported the construction of more than seven school buildings, upgrades to four hospital and dispensary buildings (including a blood bank for the County) and constructed eight bore holes and water tanks in key areas
• Education – Base Resources has provided more than 2,500 scholarships to secondary and tertiary students since commencing operations – Health – Base Resources has trained and funded over 240 Community Health volunteers to provide community education on hygiene, sanitation, maternal and child health across 46 villages in the area.

Industry and Workforce Capability Development

When Base Resources started construction on the Kwale Operation there was no large-scale mining sector in Kenya. The Company commenced an intensive and ongoing training program to build the required workforce which has been so successful in developing Kenyan national capability that the number of expatriate workers at the operation has more than halved from 42 in 2015 to 17 in 2020.

The Company invests US$0.6 million annually on training and development at Kwale Operations with 65,000 training hours delivered in FY19 alone – 13,000 of these hours were for community members. This reflects the Company’s continued commitment to skills transfer to its Kenyan workforce and the local community.

Base Resources structured training and skills transfer programs provide learning opportunities for all employees consisting of classroom, on-the-job training (including job rotation), targeted coaching/mentoring and where warranted external studies ranging from certificate and diploma qualifications at local institutions to Bachelor’s and Master’s Degree courses with international universities.

Our ‘Front Line’ leadership courses were designed to support our succession plans and fast track selected employees for future leadership roles. These programs have been the key to achieving localisation of expatriate positions and building supervisory capability. In house training is also provided all year round across a number of topics such as safety and job-specific technical training, soft skills (e.g. delegation, time management, record keeping), computer training, first aid and emergency response training.

We also realised the need to create an external talent pool, not just for our operation, but also to build and address skill gaps in the local and greater Kenyan workforce. We developed tailored programs for graduates, interns, apprentices and high school students. 119 students benefited from these programs during the 2019 financial year alone. Our apprentice program required partnerships with local training institutions and the National Industrial Training Authority and the updating of curricula to allow for more intense on the job attachments which would enable a job ready workforce. It is a program we are very proud of and one which is recognised by the government and which others seek to emulate. The Company also enrols trainees in local polytechnics where they sit for national exams.

Due to the small scale of the mining sector in Kenya, many of the skills and expertise gained at Kwale are unique and will be very beneficial to the trainees after their experience with the Company. In 2020, as Base Resources progresses the development of its Toliara Project in Madagascar, a number of Kenyan employees are being seconded and transferred to Madagascar to support the training of the future workforce there. Thanks to Base Resources, Kenya is now effectively exporting mining expertise.

When contractors or trainees finish their time with the Company, they also receive demobilisation training and counselling so that they can compete in the job market with confidence. We will soon also commence demobilisation training for our employees which will include a three-year program focused on preparing them for their ‘life after Base’ – this will include, where possible, national certification of in-house courses which our people can add to their employment offering.

Innovation

The health, safety and wellbeing of Base Resources’ people, contractors, suppliers, visitors and host communities is a key value for the company and a core principle that our culture is built around. We want every employee, contractor and visitor to go home safe at the end of their working shift. Our safety culture demands that work is halted for any unsafe practice, hazards and incidents; that they are reported, and safety fixes implemented.

When Kwale Operations commenced construction, the workforce had little experience in the mining sector and this provided an opportunity for the Company to instil a world-class safety culture. This culture is driven by a robust and evolving safety management system and extensive and ongoing training. Every employee, contractor and visitor receive a safety induction before entering site. Safety training programs are provided, not only for Base Resources staff, but also for contractors. In the last year over 4,800 hours of safety training were delivered at Kwale Operations to employees and contractors.

Communication is critical and the safety culture is reinforced at health and safety meetings, toolbox meetings and shift pre-start meetings where safety messages are delivered, and procedures reinforced. Safety performance is measured by both lead and lag indicators. Inspections, hazard reports and corrective action closures are some of the lead indicators measured; injury frequency rates are some of the lag indicators. By focusing on lead or positive indicators, the frequency of lag indicators diminishes. Application of this safety culture has resulted in another year with no serious injuries occurring and a Company-wide Lost Time Injury Frequency Rate of zero. Base Resources employees and contractors have now worked over 21.9 million man-hours Lost Time Injury free, with the last Lost Time Injury recorded in February 2014. This is a major achievement for any mining company in any jurisdiction.

We also invest in the health and well-being of all our employees. All employees undergo pre and post-employment medical assessment and selected staff, depending on their job, have annual assessments. Employees (and their spouses) also have access to wellness camps which are held twice a year to conduct voluntary medical assessments and attend lectures on selected health topics. The OH&S team conducts health and well-being talks, provides first aid training and carries out health and hygiene inspections, occupational health surveys and monitoring on a monthly basis.

We also sponsor and participate in national first aid competitions – our intention is that everyone will carry safety messages whether they are at work or at home.

Other useful supporting information

Video on skills transfer and training

Video on local content and employment

Video on livelihood programs

Article on the Kwale Cotton Project

Article on gender diversity at Kwale