Refined copper producer Palabora Copper, a subsidiary of Palabora Mining Company (PMC), achieved Level 4 broad-based black economic-empowerment (BBBEE) status earlier this month following an audit conducted by BBBEEE verification agency Edge Verification Solutions last month for 2013.

Before being awarded the Level 4 rating, PMC was rated as an exempted microenterprise following the divestment of diversified miners Rio Tinto and Anglo American before the transfer of its assets to Palabora Copper.

The current scorecard will be valid to October 2015.

The Level 4 has a BEE recognition of 100% and will enable PMC’s customers to claim back 100% of their spend.

Announcing the latest rating, PMC corporate affairs GM Keith Mathole, said the achievement was part of the company’s continuing efforts to ensure that the business benefited not only the shareholders but also PMC’s employees, the local communities and South Africa as a whole.

“Transforming a business with a yearly turnover of about R12-billion is a formidable but achievable task, thanks to the leadership of the organisation who embrace the importance of change in our entire value chain,” explains Mathole.

“This achievement is significant, as the Level 4 rating we had for the 2012 financial year only verified the ‘ownership’ element, as a result of the BBBEE transaction moving assets from PMC to Palabora Copper.

This time, we are making tangible progress in all the seven BBBEE elements, which include ownership, management, employment equity, skills development, preferential procurement, enterprise development and corporate social investment, and we just missed out on a Level 3 rating by 0.47 points.”

Mathole is, however, cautious that the amended BBBEE Act, which is set to become effective in May next year, will counteract the recent achievement.

“If we are to remain at Level 4, we have to be very vigorous in driving our transformation, as the new Act is very stringent and has fewer elements – reduced from seven to five,” he says.

To maintain and improve this level of transformation going forward, PMC aims to exclude BEE Level 7 and 8 companies from any future business.

In addition to these new amendments, Mathole adds that Palabora Copper must try to meet the requirements to comply with the Mineral and Petroleum Resources Development Act and the Mining Charter, as well as social and labour plans, as they are important regulations.

He explains that the Mining Charter, for example, requires that a company such as Palabora Copper increase its local community spend through procurement with the mainly previously disadvantaged people of Ba-Phalaborwa municipality. This will not only increase the company’s economic participation, but also alleviate poverty through job creation and, most importantly, improve the rapport and cohesion between this business and the community.