BHP Enterprise Development Strategy

BHP designs integrated B-BBEE strategy.


bhp

More than 80% of the world’s high grade manganese resources are in the Northern Cape and the majority of this manganese is mined by BHP Billiton’s Samancor Manganese in which Anglo American has a 40% share.


Mineral Resources Minister Susan Shabangu has said, “The government's industrialisation policy calls for a paradigm shift in mineral development, strategic investment in assets to maximise long-term growth beneficiation projects, enhanced value of exports, increased sources for consumption of local content, and creation of opportunities for sustainable jobs."
Government has great expectations of mining companies to make investments that will result in job creation and contribute to skills development.
Problem Statement:

In 2007, BHP Billiton wanted to be a pioneer in the industry and realised the need for an integrated B-BBEE strategy and plan for Enterprise Development, Social Economic Development and Preferential Procurement.
Edge Solution:

Edge Growth applied two key considerations to the solution:

We developed an effective strategy and delivery model for ESD, PP and SED based on global and local best practice.
Basic Methodology/Outcome:

Strategy
We facilitated a process by which the BHP Manganese management team designed a vision, and selected the strategic objectives most aligned to their corporate objectives. This included defining the strategic vision for BHP’s ESD organisation; defining the type of SMEs they should be investing in (size, industry, capacity) to maximize the impact on their bottom line and the creation of local businesses in the areas surrounding the mines. It also defined the type of assistance that should be provided to these businesses.
Organisational Design

Edge Growth then designed the organization that would implement the strategy; designed the operating structures (processes, systems, and activities), human resource requirements including job specs, the management processes as well as the monitoring, evaluation and reporting structures to ensure the organization was delivering on the strategy.
Thereafter we put into place structures and procedures to select SMEs to invest in and match the selected SMEs to the relevant business development experts that would assist these businesses. This helped in providing them with the types of services and support to help them grow and become viable businesses.
Delivery

Ultimately, in the mining sector, the sort of enterprise development undertaken is highly constrained by the local DME and local economic development priorities and opportunities. BHP’s choice of SME investments therefore included a start-up sand mine within a local rural community, and a livestock farm. The primary question they needed to ask before embarking on these investments were; is this opportunity sustainable, what help should we provide and what will the return on investment be? Edge Growth conducted a thorough due diligence on each of these businesses to answer these questions; which in turn enabled BHP to make these investment decisions. Thereafter, BHP provided management capacity to run the ventures on a sustainable basis.

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