Enterprise and supplier development

Our ESD programme is a critical element of the Social Impact strategy and our vision to power better lives in Africa and beyond. ESD initiatives provide financial and non-financial support to small businesses in areas where we operate, thereby promoting economic transformation and establishing sustainable communities.

Key achievements

Contributed funding of R111.3 million to beneficiaries

Contributed over R900 million in ESD funding since the programme began in 2018

Rolled out a funding readiness programme to improve the quality of funding applications from businesses in Belfast, Delmas, Kriel and Lephalale host communities

Partnership with Women in Mining Business to create platforms for Exxaro and businesswomen in the mining sector to interact, with the aim of advancing the participation of women-owned businesses and sharing information on Exxaro’s supplier transformation objectives and plans, how to access procurement opportunities and ESD support

Pursuing sustainable growth and impact through...

Our commitment

To support socio-economic development and create wealth, employment and sustainable enterprises in our host communities

Monitoring and measuring our performance

KPIs:

• Contribution to Exxaro’s overall B-BBEE performance
• Job creation and retention
• SMME sustainability

Delivering on our strategic objectives

Our ESD initiatives support the objectives of our DEI strategy and Social Impact strategy.

Become a catalyst for economic growth and environmental stewardship

Going beyond compliance

• Exxaro’s ESD initiatives contribute to the group’s B-BBEE score
• Meeting and exceeding minimum standards placed by local, provincial and national government
• Leveraging co-funding from other financing institutions

Stakeholder collaboration and engagement

SMMEs

To provide financial and non-financial support to facilitate business growth and job creation

Host community stakeholder forums

To understand community members’ needs and concerns

National and provincial development finance institutions

To collaborate in contributing to socio‑economic development

SMME support ecosystem

To collaborate in providing skills development programmes and market access to SMMEs

ESD Community of Practice

To contribute to information and best-practice sharing

Future focus

We are focused on streamlining our ESD process and building the capabilities of our small enterprises and suppliers. We plan to implement an end-to-end supplier development framework in 2024 to improve the conversion from prospective to actual suppliers and support first-time contractors to deliver on their contractual obligations. We are also rolling out a tender readiness programme in 2024 to improve the capabilities of small enterprises in our host communities to respond to requests for quotations.
To augment our existing ESD funding, we intend to leverage additional funding through co-funding.

Our approach

Our approach to ESD is informed by our vision of promoting economic transformation. Our ESD initiatives are a key component of our socioeconomic development response and support the SMME development pillar of our Social Impact strategy.

Our ESD programme creates opportunities for black-owned suppliers and black entrepreneurs through financial support in the form of grants and loans and non-financial support through programmes with external service providers and incubator hubs. The programme delivers sustained stakeholder value by:

• Securing our licence to operate while being financially self-sustaining: We do this by bringing to market commercially viable enterprise support solutions as well as supporting high-growth enterprises that will help us realise our strategic growth objectives. We also align programme objectives to meet regulatory and statutory requirements of local, provincial and national government
• Reducing enterprise-wide supply chain risk: We achieve this by diversifying the quantum and quality of the vendors we invest in close to our operations, effectively lowering internal user transaction costs and supply side risk associated with security of supply and delivery lead times
• Supporting economic transformation by growing the number and size of black-owned businesses: We provide market access opportunities for black-owned businesses and invest in non-financial and financial business support programmes

We deliver on our ESD strategy in each SLP area through incubator hubs, which provide three-year programmes for SMMEs.

ESD strategic objectives

Our ultimate goal of economic transformation is supported by the following ESD strategic objectives:

Case study:

Building a self-sustainable ESD programme by investing in emerging businesses

Sustainable socio-economic impact is the principal strategic objective of our ESD programme. Beyond compliance with our legislated B‑BBEE and preferential procurement commitments, we are enabling this programme to become self-sustainable by investing in an innovative and diverse supplier base that will operate beyond the mining value chain.

To achieve our ESD objectives, we have invested almost R900 million in businesses with high growth potential over the past six years. Since 2019, these beneficiaries have generated over R7 billion for the South African economy (mostly from contracts with Exxaro), created 3 314 new jobs and retained 5 963 for at least 12 months.

The outcomes of our investments and the benefits of growing these businesses are evident in the socio-economic impacts of the following beneficiaries:

• Bantubyte, a technology business, hired five new team members, launched new artificial intelligence products, forged partnerships in Silicon Valley and donated laptops to a school project
• PBSA Logistics and Consultants, a transportation and HR/industrial relations consultancy, mentors four black women-owned businesses and was involved in various CSI projects including computer lessons for grades 11 and 12 learners and school uniform donations
• Gradidge-Mahura Investments, a wealth management company, increased its staff complement from 15 in 2018 to 33 in 2023 and widened its offerings to include investments, asset management, employee benefits and financial services

Our performance

Provincial spread of supported QSEs and EMEsy (Total: 14)

The provincial breakdown of beneficiaries highlights the focus on beneficiaries from host communities.

ESD programme beneficiaries

ESD approvals per year

ESD approvals since programme inception have combined grants and loans. Approvals have steadily increased since their drop in 2020, which was caused by a poor pipeline of funding applications related to challenges from COVID-19 and a distressed economy. The ESD programme reached self-sustainability at the end of 2022, meaning the loan fund was able to ensure compliance and support new beneficiaries through loan repayments, instead of annual funding from Exxaro’s budget. The 2023 funding is from loan repayments and will ensure that Exxaro’s overall B-BBEE performance target is achieved.