MALOMA COLLIERY: TRANSFORMATION AND IMPACT REDEFINED
….. DEVELOPING A WORLD-CLASS MINE ON SWAZI SOIL!
In its editorial by Dr Sanoussi Bilal, Great Insights, a magazine of the European Centre for Development Policy Management (ECDPM), covering a wide range of topics related to economic development in Africa and the developing world, makes an important point on mining and development. This is contained in the publication’s July/August 2017 Issue.
Bilal posts that the extractive sector can play a pivotal role in the industrialization and economic transformation of resource-rich countries, stimulating more inclusive and sustainable growth. He says this requires looking beyond the perimeter fences of the mines, and considering broader dimensions such as governance frameworks, genuine linkages with economic activity in the rest of the economy through innovation, skills development and education, entrepreneurship, infrastructures, and territorial development approaches.
This is exactly what prevails at Maloma Colliery Limited (MCL) in Eswatini, since the company’s leadership has laid down a clear vision aimed at comprehensive economic transformation and positive impact at community level, for purposes of adequately responding to the socio- economic needs of the country and to help Eswatini achieve her development objectives.
Founded in 1992, the colliery is located 25 kilometres west from the village of Nsoko in the southern part of the Kingdom of Eswatini, 8 kilometres to the south-east of Maloma settlement, and about 15 kilometres south-west of Sithobela. The history of the company’s shareholding includes Tibiyo TakaNgwane and the Eswatini government partnering with several commercial shareholders over the years at a 50% majority shareholding: Carbonex in 1991, Koch Industries in 1996, Xstrata Alloys in 2001 and Chancellor House Holdings in 2010.
Then came in bigwig serial entrepreneur Michello Shakantu’s Mine-X company when it was announced in December 2020 that, for the first time in 28 years, Maloma Colliery would be 100 percent Eswatini owned. As one would imagine, it was hard to believe that a black African and Swazi could venture into an unchartered business territory. As the new Executive Chairman, Shakantu has used his exceptionally creative ways of bringing up new business ideas and inculcation of a high work ethic based on an outstanding vision, to steer the company into relatively new dimensions. The man with an erudite demeanour is now on the driving seat of a company on its way to becoming a First-world colliery on Swazi soil.
Mine-X owns 50 percent of Maloma Colliery, 25 percent is held in trust by Tibiyo Takangwane and the remaining 25 percent is held by the Eswatini government through the Ministry of Natural Resources and Energy.
Miners on their way home from work at Maloma Colliery Limited.
Part of the new ablution centre that has been built for staff to freshen up and relax after work.
Now, where are we and where to from here? To understand the nature of the ‘new-look’ Maloma and its sophisticated operations, one would need an exhaustive grasp of anthracite coal because the mine produces anthracite coal products primarily consumed by the steel and metallurgical industries in neighbouring South Africa. This is quality coal with the highest carbon content, the fewest impurities, and the highest energy density of all types of coal and is the highest ranking of coals. Explaining the four major types of coal: anthracite, bituminous, subbituminous and lignite, the United States Geological Survey (USGS) describes anthracite as the highest rank of coal. “It is a hard, brittle, and black lustrous coal, often referred to as hard coal, containing a high percentage of fixed carbon and a low percentage of volatile matter,” it says.
Eswatini is therefore excessively endowed with a rare breed of coal. This is the most expensive coal and accounts for about 1% of global coal reserves; it is mined in only a few countries around the world. For the uninitiated, Eswatini is the number one producer of anthracite coal on the African continent!
“When we arrived in June 2021 we had a vision and the plan was to develop a mining company worth E1 billion (approx. $64.7 million) through increasing revenue by 40 to 50 percent. The aim is to build a sustainable business entity with powerful impact in the community. This is in line with His Majesty King Mswati III” s Vision of transforming Eswatini into a first-world country, as reflected in his speech when he opened parliament this year. Once again, His Majesty reaffirmed his commitment to economic growth – challenging the nation to aim for higher investment targets,” says Shakantu. As he narrates this, one could be easily melted into his passion for the business. He continues: “Production has drastically improved from 15 000 tonnes to 45 000 tonnes a month in the past year.” Without doubt, this expansion rate epitomizes the passion for the economic transformation and development of the country.
To underscore the colliery’s deeper commitment to its renewal and transformation plan, as well as its obsession with expansion, the new top-notch ablution centre worth E11 million (approx. $700 000) and mining machinery amounting to over E20 million (approx. $1.29 million) purchased within a year of the new leadership’s arrival would best explain this commitment. The Executive Chairman says it was important for them to prioritize the general welfare of staff, hence the building of the ablution centre which is used by the employees for purposes of freshening up. An industry expert who spoke on condition of anonymity said it was highly likely that infrastructural, human and technical investments will be more pronounced now because the company was owned by locals who, unlike foreigners, had interest in the development of Eswatini. “Before their arrival, Maloma had deteriorated to shocking levels, but you can now sense the direction to which it is headed,” she said.
Another outstanding contribution to the economy has been creation of employment opportunities for Emaswati, considering that since the new leadership’s entry in June 2021, an additional 142 people have been employed by the mine. These are the same people who go on to provide for families and to buy from vendors who sell items like fruits and vegetables by the company gate. Essentially, this means the existence of Maloma has a multiplier effect to the local economy – the hiring of one individual means a source of livelihood for his or her family as much as it does to the family of the vendor.
The new mining scoop that has been purchased after the arrival of the new leadership at Maloma Colliery.
For instance, 24 year old Nosipho Ginindza of Ndunayithini, around Maloma, explains how proceeds from her aunt’s fruits and vegetables business were used to pay for her school fees all the way to Form 5. “I am now working here as a vendor myself because I want to pay for my college tuition. Without Maloma, I am not sure as to what would have become of me. Since the arrival of the new management, the company has hired more staff and this means more people coming to buy my items,” she says. Other people who benefit are bus owners in the community who are sub-contracted by the mine to provide transport services for the staff. Again, these buses have now been added to accommodate the increase in the number of staff members.
Nosipho Ginindza (right) serving miners at her market stall by Maloma mine gate.
Furthermore, the company invests 2.5% of its net profit through its Corporate Social Investment (CSI) programme into the community within which it operates. The three surrounding chiefdoms benefit from this programme which aims to improve areas such as water supply, healthcare, education and infrastructure. The company delivers high impact and sustainable community development programs that will continue beyond the life of the mine.
In a nutshell, the rising giant, Maloma Colliery, is fast becoming a world-class mine, that will be used for benchmarking purposes and as guide for other mining companies who intend to operate mines in Eswatini, in terms of the exceptional standards and commitment to align with the country’s economic transformation goals, as well as improving communities. Given the life span of the mine, the company has been given an exploration license to investigate the presence of coal reserves in the area close to the mine which could potentially extend the mines productive life span four times over, by a minimum of 20 more years. E32 million ($2.133 million) will be invested in carrying out the project. Initial exploration activities, such as mapping, will start over a large area and then target smaller and smaller areas. The aim is to see if mineralisation is at levels large enough to be commercially extracted.
On completion of exploration, MCL will apply for a mining or retention licence to extract the anthracite coal they will have discovered. E40 million ($2.6 million) will be invested towards the expansion of MCL. Communities around the mine will be positively impacted with these developments as this will result in more employment opportunities while subcontractors such as public transport owners and food retailers will enjoy a thriving business ecosystem. The positive spinoffs will also be enjoyed by the country at large as Maloma will attract foreign currency from increased exports.