Driving into Phalaborwa at about 8am, the first thing that struck me was the haze in the air. And this was not a heat haze, it was dust from the mines. Phalaborwa is another one of Limpopo’s towns that today owes its existence to the copper and phosphate mines that surround the town.
The second thing that struck me while I explored the town before my first meeting was the sense of order that’s rare in Limpopo. It’s clean, architectural eyesores are few (not that there’s any great architecture) and even the informal trading in the town centre was obviously managed. Was this evidence of a mining company influencing a municipality?
Phalaborwa lays claim to being the tourism capital of Limpopo and its tourism info office, funded and staffed by the Palabora Foundation, is the most efficient — by far — that I’ve come across in Limpopo. Mark Glanvill and Rosa-Leigh Kruger are real assets to the town.
Phalaborwa’s Marula Festival in February each year is one of the highlights of Limpopo’s events calendar. Another attraction is the fact that one of Kruger National Park’s gates in only 800 metres from town. And with the opening of the Giriyondo border post, you can now drive through to Mozambique.
The region’s challenges are considerable. Ba-Phalaborwa municipality has a population of 156,000 and 18% are unemployed. Only 41% of the 15-65 age group are economically active.
In the Phalaborwa district (population 111,650), 33% are under the age of 15; 66% under the age of 34; 40% have no income and 20% earn less than R500 a month. Some 23.5% are HIV-positive.
My visit starts with Malesela Letsoalo, director of the Palabora Foundation (founded in 1986). Until 2001, Rio Tinto’s Palabora Mining Company (PMC) contributed 3% of its after tax profit to the Foundation. But then, someone at Rio Tinto was very clever and had the foresight to plan ahead. With lean years looming while the company moved from open pit to underground mining, the Foundation received a lump sum grant of R176 million so that it’s work could continue using the interest earned, supplemented by other donors (European Union, Oxfam, Foskor, Sasol Nitro and others).
Of course, given that PMC made a profit of R1.4 billion last year, it’s obvious to ask if they got off lightly. Not really. The Palabora Foundation would have gone unfunded for a few years if the 3% formula had been retained. It meant they could plan ahead and attract a broader donor/participant base. And that’s not the last donation PMC will make. Discussions on the mine’s ultimate closure have already started and that will also carry a significant lump sum payment to the community.
Now that’s all good and well, but what’s the money doing? So many foundations thrive on doing “good work” but the results are hardly lasting. The Palabora Foundation focuses on education, combatting the impact of HIV/Aids and entrepreneurship.
Educational results can only be regarded as spectacular. The grade 12 pass rate is over 90% with over 75% gaining university exemption — far higher than the Limpopo average. The focus is on mathematics, science and technology. A special programme selects students with high-achieving potential, offering extra tuition which leads to bursaries, usually to study engineering.
Programmes start with early learning and extend to school learners, teachers and governing bodies for about 50 schools in the region.
I was singularly impressed by everything the Palabora Foundation is doing — courses in construction, computer-literacy, sewing, arts and crafts. And those attending are not just school-leavers or others needing to improve their skills. Mine employees close to retirement are also encouraged to attend so they have skills to occupy them productively when they leave the mines.
Later that afternoon back at Bollanoto Tourism Centre, I met with tourism’s Mark Glanvill, Chris Kruger (Palabora Foundation and chair of the Trade & Tourism Council) and Matee Seduma (head of the municipality’s local economic development). If the Foundation has been the catalyst, Seduma is rising to the challenge, and that’s why this former schoolteacher left the profession. There’s a vibrant and informed dialogue about driving tourism but, Seduma notes, when he asked Limpopo Tourism for their business plan, he was told there isn’t one (except in someone’s head).
Rio Tinto has changed my attitude to mining companies. As a Capetonian, appreciating how God-given assets and nurtured agricultural environments have created one of the world’s great destinations and SA’s best city, mines are an anathema. They rape and despoil the land and the benefits they offer are temporary. Or are they? What Rio Tinto is doing suggests not. It has shifted the focus of the whole region. The Ba-Phalaborwa municipality has set its sights firmly on a tourism and wildlife focus, and the importance of entrepenurship.
Something else unique to a mining company has permeated the town. Mines are safety conscious and cleanliness is part of the safety ethic. Phalaborwa reflects this (unlike some other Limpopo towns where mines play a lesser role in their communities). Mines also practice strict financial controls – and that’s probably why the Palabora Foundation really does give more bang for the buck in a province renowned for corruption and lax financial management.
And there’s a lesson for the ANC Youth League’s Julius Malema — the private sector always gets more bang for the buck than the government ever can. And yes, there is sometimes an attractive face to capitalism.
2 responses to “Mining can add value”
[…] can’t find a life-guard to be on duty. In Phalaborwa, Rio Tinto established the Palabora Foundation with initial funding of R176 million. It does excellent work and has made a big difference to the […]
[…] can get a deal out of Anglo American similar to the one Phalaborwa received from Rio Rinto. (See Mining can add value.) I hope so because I am getting the feeling that most mining companies don’t contribute as […]