Lehlohonolo Molloyi has been appointed CEO of MEMSA at a time when the organisation is focusing on revisiting its marketing strategy and value proposition to the industry with a strong emphasis on sustainability, member recruitment and retention.

He comes with 30 years of experience in the mining industry. Molloyi started his career as a Metallurgist at Anglo American, moving on to Anglo Gold and later Goldfields. He has also worked extensively in the R&D, marketing, and operational executive spaces within the industry across processing plants, open-cast, and underground mining operations. In addition, his entrepreneurial spirit saw him starting and running his own business in the mining metallurgical consulting space. Molloyi spoke candidly with African Mining about MEMSA’s role in the industry and its vision for the future with its drive to add value to the mining industry – particularly in the R&D and innovation space. He also shared his perspective on African trade and investment – although MEMSA members are based in South Africa, they are able to supply to the continent of Africa and the world.

Formally established in 2016, MEMSA has functioned as an industry cluster organisation and a voice for the South African mining equipment manufacturing industry, serving as a point of liaison for the government and private sector. It is based at the Mandela Mining Precinct hosted by the CSIR, where the association is able to collaborate with industry partners such as the Department of Trade, Industry and Competition (dtic), the Department of Science and Innovation (DSI), the Department of Mineral Resources and Energy (DMRE) and the Minerals Council South Africa.

Molloyi has taken on the first full time CEO role at MEMSA and has been given the mandate to grow MEMSA with the assistance of funding for a two-year period from the DSI.

MEMSA is revisiting both its Marketing and PR strategies in a drive to make the association more visible and relevant. Some of the funding that has been available will be used to this end, keeping the two functions strategically separate to maintain an unbiased trajectory in ultimately defining MEMSA’s value proposition and relevance to the industry at large. “We are confident that at the end of the journey, we will have a strategy that resonates with the industry, and a strong visibility so that when somebody thinks mining products and local, the first entity that comes to mind is MEMSA.”

 Import displacement and tariffs

Molloyi’s first port of call has been to interact extensively with the current local OEM MEMSA members to understand the challenges they currently face in the industry in order to better service them. He highlights their plight when it comes to South African import displacement, and tariffs charged on the import of components such as engines, axels, and transmissions for manufacture, versus a foreign OEM that brings in a complete machine which lands in a workshop duty-free. Not to mention the additional legislation local OEMs are required to comply with, from BBBEE to SARS requirements.

This makes for a playing field that is not level, says Molloyi, and puts South Africa’s OEMs at a disadvantage, especially when considering these foreign competitors also have the benefit of strong government funding as well as better interest rates offered by overseas financial institutions. This is an area that will be a focus for MEMSA in the future, through collaboration, to see how these playing fields can be evened out, with assistance from the dtic and DMRE.

 BBBEE

Molloyi shares that MEMSA is waiting in earnest for legislative/policy changes that might come as the DMRE has indicated that it will not be appealing the recent court ruling with regards to the Mining Charter, local content, and BEE levels. MEMSA has, historically, been guided by the Mining Charter, dtic and DSI in terms of member recruitment.

Members are required to be 26% locally owned, with a minimum level 4 BBBEE status, with a percentage of local manufacturing ability at 60%. “This is not to say that non-compliant companies in search of membership are turned away,” explains Molloyi. He points out that it is MEMSA’s strategy to collaborate with organisations such as the dtic to assist potential new non-qualifying members with solutions such as Employee Stock Ownership Plans (ESOPs), SED & Enterprise and Supplier Development, BEE partnership, to assist them in reaching the minimum BBBEE levels required. MEMSA is embarking on this kind of strategic collaboration with other associations where there is synergy, confident that these partnerships will enable collaboration that could go a long way to assist local manufacturers in best serving their clients.

Access to funding for R&D

“Part of MEMSA’s mandate is to grow the mining supply chain for South African manufacturing companies, but then also to look at the whole issue of research development and innovation, working very closely with Mining Precinct and the CSIR,” says Molloyi. He points out that although many of the MEMSA members are investing in internal R&D, they face a very real challenge in accessing funding and grants timeously, with some innovations left in limbo.

MEMSA is tackling this challenge with the local government departments involved, and one of the obstacles cited has been the obvious Covid-19 hold-ups. MEMSA is therefore looking at ways of assisting members to fast-track the development of mining innovations through a committee known as the South African Mining Extraction Research Development and Innovation Committee (SAMERDI). This committee has representation from the Mandela Precinct, MEMSA, DSI, the Minerals Council South Africa, DMRE and the CSIR, to name but a few.

Standardisation and coding are key

It is Molloyi’s opinion that one of the key principles that will add value to local suppliers is standardisation of equipment and the terminology thereof. This will assist in tenders and save mines money in the procurement process. There are far too many definitions out there and going forward streamlining this will be beneficial.

African Trade – localisation is key

Molloyi shared that many of the MEMSA members are doing business cross-border, and some African countries have tighter policies than others to adhere to. Ghana, Democratic Republic of the Congo (DRC) and Zambia are of particular interest at the moment. Molloyi stresses that many of the African countries are looking to partner with South African OEMs to assist in building localisation long term, in a partnership that will result in empowering their locals to grow economies.

“So, it’s those relationships that we’re trying to build for our members, especially in the stable countries like Ghana and Zambia, and we are doing that through the assistance of the dtic,” says Molloyi. The dtic has foreign economic representatives based in all these countries and we engage with them to identify potential business opportunities for our members. Embassies are also, of course, core in these relationships.

He sees, however, much room for improvement and growth when it comes to doing business cross-border in Africa going forward. Molloyi emphasises, “Making sure that we understand the challenges and the risks, prior to introducing our members to any of those spaces is paramount.” To this end, he is in the process of looking at partnering with a financial institution, which already has relationships with both local and African companies wanting to partner with South African OEMs. This will assist in mitigating risk for members looking to deal with these entities, and according to Molloyi, this will open up the market considerably and fast track cross-border agreements.

Molloyi mentions that when it comes to international trade, some MEMSA members are already exporting to India, Russia, Peru, and Australia – and this despite Covid-19 constraints.

MEMSA and their members are most certainly a force to be reckoned with going forward, and African Mining will be talking to some of these OEMs in the near future to home in on the solutions they can offer to the African mining industry. MEMSA has already taken on four new members since Molloyi has joined, and he plans to grow this substantially in a very short space of time, as MEMSA adds value to the industry as a whole.

 “Part of MEMSA’s mandate is to grow the mining supply chain for South African companies, but then also to look at the whole issue of research development and innovation, working very closely with the Mandela Mining Precinct and the CSIR.”