Prime Focus Magazine Journalist Rosalia David (RD) sits down with Dundee Precious Metals Tsumeb (DPMT) Vice-President and Managing Director Zebra Kasete to discuss the smelter’s future plans under his leadership. The all-encompassing interview also touches many other aspects including local skills development, production targets and also how the company plans to be a competitive corporate citizen. The following is a full transcript of the interview with Kasete.
RD: As a professional you have a very strong footprint in the mining industry from your days at Rossing Uranium and at Murowa Diamonds in Zimbabwe what would you say are your immediate challenges going forward after joining Dundee Precious Metals?
ZK: Dundee Precious Metals has invested a substantial amount of money in its operations and we are coming to the end of nearly four years of construction where some process interference was experienced. It is important to bring the operation to a steady state, provide leadership and direction in order to remove any lingering uncertainty in the smelter’s potential.
We have made a commitment to the market in terms of business performance and financial delivery for the year and we have to deliver on those commitments.
In our new management operating model the smelter will be run on the basis of just-in-time manufacturing sites, thus there is a need to incorporate this new way of operating into the daily routine of our teams.
Worker health and safety is the biggest challenge within in the industry. Globally, there is an expectation that resource companies play their part in their host country by creating a positive legacy in the community.
We will therefore support major initiatives like Harambee Prosperity Plan, New Equitable Empowerment Framework and Mining Charter.
Managing expectations on all levels is the biggest challenge for new leaders. I must understand the commitment made by the Company and manage those expectations effectively whilst delivering on them.
Despite all of the exciting challenges, I am happy that I ‘am home working for a Company whose values resonates with my own.
RD: What is your assessment of the Namibian business climate bearing in mind the volatility experienced by the South African rand which is pegged to one as to one with the Namibian dollar?
ZK: Namibia’s business climate is doing remarkably well despite a slight drop in the rating. This rating drop has urged the Namibian authorities to continue making the business environment friendly and we noticed in the Harambee Prosperity Plan that there are specific themes highlighted to make the country’s economy investor friendly. DPM applauds the national government for doing so.
Relating to the rand, we have seen that the South African rand was rated low. This means that they have to do more to avoid the current status. This will have serious repercussions on the South African economy and by implication, the Namibian economy. However, it is pleasing to note that the South African authorities have indicated that they are going to do everything in their powers to avoid this.
As a business in Namibia we need to focus on increasing productivity, decreasing costs and operating within our means otherwise we will be uneconomical.
In addition to the above, I want to note, like most resource companies our revenues reported in USD and most of our costs are in Namibian Dollars, therefore a weak NAD/USD reflects favorably in our financial results.
RD: How many tonnes of copper concentrates did Dundee treat in the 2015/2016 financial year?
ZK: In 2015 we smelted 196kt of concentrate, whereas, in 2016 our guidance is for throughput of 215kt to 250kt.
RD: How do you as an international company make sure that certain proceeds of profitability are also cultivated into the corporate social responsibility?
ZK: Any international company operating in a local community needs to be appreciative towards their host community.
Corporate social responsibility is crucial to Dundee Precious Metals Tsumeb. As a foreign company we believe in investing part of our proceeds into the community in which we operate.
With the administrative assistance from the Namibian Chamber of Commerce and Industry’s local branch, the Tsumeb Community Trust has provided grants to over 80 small Namibian owned businesses that have in turn employed and trained a significant number of Namibians who might be otherwise unemployed.
Dundee has contributed approximately N$15 million to a public-private partnership with the National Housing Enterprise to build 67 houses for ownership by our employees, with more houses in the pipeline. This is also in line with the Harambee Prosperity Plan theme for mining companies to continue providing houses to the communities. As part of the Chamber of Mines Namibia we are happy and committed to work together with the government to progress this specific theme.
We have also awarded bursaries to Namibian students to study engineering, pure science, environmental studies, drafting, humanities and commerce. Since DPM acquired the smelter in 2010, it has spent just over 5 million Namibian dollars on bursaries.
We also work to ensure that Namibian owned businesses supply our day to day operational needs wherever possible. DPM progresses through a preferential procurement policy, which ensures more locally owned businesses have the opportunity to participate in our tendering and procurement process. All of this has been done, to ensure the proceeds of profitability are cultivated into local corporate social responsibility.
RD: What are some of the key projects that your company is involved in Tsumeb and in the country to pay back to the community that you are operating in?
ZK: Community investment is one of our core values; this portrays the smelters commitment where social responsibility is concerned.
Since 2010, about N$12 million has been invested in the community through the Tsumeb Community Trust. The Trust has provided the community at large with a source of funding, to address needs such as education, arts and culture, social services and small and medium enterprises (SME’s). The Trust is entirely governed by prominent local and national leaders who bring vast experience and expertise to the management of the Trust Fund and ensure, the administrative aspects of each project adheres to proper governance practices.
Below some highlights of the Company’s economic impact beyond the smelter gates:
About 500 permanent employees - 98% Namibian nationals.
• Additionally, about 350 contract employees currently employed (over 1,400 at peak of project work)
• 76% of manager & above levels held by Namibian nationals
• 80% of discretionary spending on goods & services awarded to Namibian suppliers in 2015
• Preferential procurement strategy to support development of local businesses.
• N$12 million invested in community since 2010 through independent Community Trust – focus areas = education, social services, small-medium sized enterprises (SMEs)
• Over 80 SMEs funded, providing employment throughout community
• NAD15 million spent to build employee-owned affordable housing in partnership with NHE – 67 houses built-to-date and an additional 50 to be built in 2016- 2017.
• Spend over N$5 million on bursaries to Namibian students.
RD: Do you think Dundee is now in a better position and operating in a much more profitable environment as compared to the inception days?
ZK: Substantial investment has been made in the business to expand DPMT’s capacity, improve environmental standards and optimize operations. With the added converter capacity we expect to generate significantly higher levels of EBITDA this year and are working towards securing additional feed that would support expanding throughput to up to 370kt/a.
Also, the completion of the copper converters, is expected to debottleneck production, reduce inventories and improve annual EBITDA.
We are also busy optimizing existing infrastructure and processes and reducing secondary material to normalized levels.
RD: The company at some point went through a frenzy of bad publicity because of purported issues surrounding emission of arsenic dust, How have you dealt with the situation and where do you see yourself as a corporate citizen in the next few years?
ZK: I want to give you some status upon acquisition of the smelter:
• The smelter was built in 1960-62 and commissioned in 1963.
• It was designed to treat complex ores from the Tsumeb Mine containing high levels of copper, lead, zinc, arsenic and cadmium.
• The environmental and health challenges during ‘80s and ‘90s; Pb, As and SO₂ emissions were above international standards for years.
• New furnace (Ausmelt) was built and commissioned in 1996 to treat Lead.
• Namibia’s copper mines closed in 2008.
• The ausmelt was re-commissioned 2008 for Copper treatment.
• DPM purchased the Smelter from Weatherly Mining in March 2010.
• Production capacity increased from 147,000t concentrated in 2010 to a current capacity of 240, 000 TPA.
When DPM bought the smelter in 2010, there was a lot to be done to bring the facility up to world class standards and to reduce some of the negative publicity derived from the challenges the operation encountered prior to our ownership. I am pleased to say that DPM completed most of the key projects to improve the infrastructures at the operation, and we have received positive coverage for the past three years.
In addition to the above, we have an active engagement with all our stakeholders. We also have an active advisory council at national and local levels and host, regular “town-hall” meetings to update the media and community on smelter progress and plans.
One of our objectives is to encourage 80% of relevant target publics to engage with DPMT as the only authoritative source of information pertaining to any possible issues at hand.