BCL mine, the copper/ nickel miner, presented a rule book to its league of suppliers with the aim of rooting out some rogue associates and at the same time slashing out on costs.
The new terms of the rule book were presented to southern region suppliers’ indaba in Gaborone during the week and are aimed at helping the company emerging out of the effects of the global economic downturn to stand on its feet.
Speaking at the suppliers meet last week, Divisional Manager-Asset Management, Keenlord Dube, announced the introduction of the post completion audit and suppliers evaluation, which he said is meant to enable BCL to appraise supplier performance and inform future business relationships.
Dube said that BCL will intensify evaluation of its suppliers even after they have delivered on their contractual obligations.
“We want to reduce uncertainty and risk in the supply chain. We want credible and reliable suppliers who will complement our efforts to run an efficient operation, which is characterized by performance maximization and cost minimization,” he said.
He added that predictable demand and less demand variability are key to BCL’s operations, further challenging suppliers to evolve with BCL and identify core competencies and define value propositions which would also positively impact on BCL’s operations.
Dube also said that through the 2006 procurement policy, BCL has taken a deliberate decision to support local suppliers and support Selibe Phikwe’s diversification efforts.
The Selebi-Phikwe diversification plan is aimed at making the mining town economically independent even after the life-span of the mine. Established in 1974 when the mine started BCL mine has been on death bed and surviving on financial drips from its shareholders until its current Chief Executive Officer, Montwedi Mphathi, took over in 2003.
At the time the mine had been on numerous occasions been put on death row, but, of late he commissioned an exploration whose outcome indicated that the lifespan of the mine will go beyond 2020. However, the most worrying thing is the future of the 8000 people whose lives are directly linked to the mine and 30,000 extraÔÇöeither living in areas surrounding Phikwe or factories within the township. According to a study commissioned by the Ministry of Finance it was found that if the diversification plan does not work the lives of 30,000 people were at risk and there was a likelihood
of some unrest in the area.
He, however, warned that BCL would not compromise on its demands for quality and efficient and reliable delivery. In 2008, BCL procured more goods from Botswana as compared to its South African suppliers.
Suppliers were also warned that they stand at risk of being deregistered if they breached the company’s ethical standards. Dube warned that suppliers, who give untrue and dishonest information during the tendering and registration process, fail to honor contractual obligations, fail to deliver on time and generally display sub-standard performance, stand at risk of being de-registered from BCL’s supplier database.
BCL’s tough stand comes in the wake of the recent global economic recession, which has challenged the mine to review its operations, increase efficiency and reduce costs so as to improve its financial viability.