Our Environment

Lomeza currently operates in South Africa, in the coal mining industry. Our long-term goal is to extend our operations outside of South Africa and to develop our own mining operations, with a focus on; coal, industrial minerals, iron ore and base metals.

South African Mining

The mining industry in South Africa is highly regulated – including guidelines around the environment, labour, communities and procurement. To address inequalities in the mining and minerals sector, the Mining Charter and MPRDA (Mineral and Petroleum Resources Development Act) were instituted. These set out requirements regarding, for example; gender, race, community and entrepreneur shareholding, employment, procurement, and human resource development for those previously disadvantaged. Lomeza seeks to uplift those falling under this category whilst maintaining employment equity ratios.

South Africa has the largest mineral reserves in the world with a value of between USD $2.5 and $4.7 trillion. The country’s mineral deposits are dominated by platinum – group metals (88% of global reserves), manganese (80%), chrome (72%), vanadium (32%) and gold (30%). Coal is some what smaller at 11% of global reserves. South Africa’s mining industry is the country’s largest employer, with around 460,000 employees and a further 400,000 employed by the suppliers of goods and services to the industry. Development of a strong and sustainable mining industry is critical as it contributes to the economic growth of the country and to the enhancement of the quality of life of all its citizens – this is one of the components of Lomeza’s mission.

According to The South African Minerals and Metals Research Institute (March 2017) the most significant operational challenges and pressures in South African mining are:

Reducing the utilisation of key resources such as energy and water

Improving productivity through more automation

Ensuring that the industry earns licenses to operate from indigenous communities, and

Managing health and safety risks

Reducing environmental impacts of the operations and of waste production

Ensuring safe and secure mine closure processes

South African Coal Mining

South Africa is the sixth largest holder of coal in the world with 31 billion tonnes of recoverable coal reserves, equivalent to 11% of the world’s total coal reserves. South Africa produces in the region of 255 million tonnes of coal and consumes almost three quarters of that domestically.

Around 92% of coal consumed on the African continent is produced in South Africa. The industry is also responsible for supplying the coal-to-liquids (CTL) industry, developed by SASOL, who produces around 35% of the country’s liquid fuel.

Around 77% of South Africa’s energy needs are directly derived from coal, accounting for roughly 43% of all coal consumed in South Africa. However, in the long term, there is some uncertainty around the longevity of coal mining in South Africa, especially given the intention towards cleaner energy production such as nuclear power, wind and solar.

The five largest coal mining companies account for about 85% of all production. They are Anglo American plc, South 32’s South Africa Energy Coal, Sasol Mining, Glencore Xstrata, and Exxaro. Lomeza already has a contract in place with Exxaro and aims to pursue others in this top 5 group.

According to the Chamber of Mines South Africa, the coal sector (excluding Sasol) employs in the region of 87,500 people. This is the third largest group in the mining sector after gold and platinum.

Open-cast mining accounts for roughly half of South African coal mining operations, the other half being underground. Lomeza’s current focus is in the open-cast environment, however, we endeavour to pursue underground in the future.

Give us a call on 012 665 2261/2 or enquire below

Socio-economics of South African strike culture

Trade unions protect the rights of the workers. In democratic South Africa trade unions have the power to guarantee that workers are fairly treated – in terms of wages and benefits, work conditions, retrenchment and lay-offs, and deductions from salaries. Trade unions are responsible for negotiating in this regard on behalf of their members. Negotiations take place every two years and are accompanied by strikes to “persuade” employers to meet the striking miner’s demands. Incidentally, strikes are a given across most industries in the country – South African’s call it “strike season”. Unfortunately, these strikes are often marred by intimidation and violence – making it unsafe for non-striking miners to attend work.

The impact for mining companies, like Lomeza, is that assets lie dormant – negatively impacting return on the investments made to acquire/hire them and, consequently, adversely affecting the company’s potential and possibility of attaining future funding. Lomeza manages the business in this context.

Proliferation of Contract Mining

In South Africa over the last decade or so there has been a significant increase in the number of mining operations employing independent contractors to carry out mining activities. They have chosen this business model as it provides the following advantages:

Economies of scale and scope- access to capital equipment and human resources

Minimised capital exposure- enabling the company to better utilize limited cash (capital)

Reducing management of risks- around workforce availability, occupational health and safety, and environmental incidents

Flexibility to adapt to fluctuating market cycles- without internal retrenchments and underutilised equipment

Reduced effort to manage a workforce

Access to mining experience and expertise- optimized mining, plant, and equipment utilization rates and labour productivity

Equipping of mines that have restricted capital budgets

Maximised efficiencies that result from contractors benchmarking their operations across various mines

Reduced administration and other human resource related costs- such as sick leave and training

Lomeza’s offering fulfils many of these advantages that mining companies seek.

Competition in Contract Mining

Contract mining is highly competitive- there are many companies of all sizes offering this service. Constant outstanding delivery and trust are essential to continued contracts.

The most experienced competitors are predominantly not compliant regarding black ownership; however, they have the advantage of capital resources, reputable experience and scale.

As a young organisation, Lomeza does not have extensive access to machinery and capital that these larger contract mining companies, who have been in operation for many years, have. Lomeza is building towards this.

Support for Entrepreneurs From Large Mining Operations

Large mining operations continue to drive employment of black entrepreneurs in the contract mining space. The Mining Charter requires 70% procurement of mining goods and 80% procurement of services from black empowered entities. This gives Lomeza, and other companies with similar profiles, an advantage. We believe that our focus on excellence and adding value will turn that opportunity into something more enduring.

Contact Us

Send us a message and we will get back to you shortly.

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012 665 2261/2

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info@lomeza.co.za or simon@lomeza.co.za

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No. 2 TimeSquare
11 Pieter Street
Centurion, Gauteng

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Postnet Suite 859
Private Bag X1007
Lyttelton, 0140

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www.lomeza.co.za