Mining companies across South Africa invest significant resources in enterprise and supplier development (ESD), yet supplier failure rates remain persistently high. Many small, medium and micro enterprises (SMMEs) enter mining value chains with ambition, technical skill and drive, only to struggle once contracts are secured and operational pressures intensify. This is often framed as a capacity issue at SMME level. In reality, it is more frequently a failure of programme design.

The broader context for supplier development in South Africa is sobering. Up to 70% of SMMEs fail within their first two years, highlighting the fragility many businesses face even before engaging with complex corporate value chains. Despite yearly ESD investment estimated at R20-billion to R30-billion, research points to limited emphasis on long-term sustainability outcomes – reinforcing the need for programmes that build readiness, not just spend.

Too many ESD initiatives are structured primarily to meet compliance requirements rather than to prepare suppliers for the realities of operating in a mining environment. Funding is introduced before businesses are operationally ready. Skills development is generic rather than contextual. And market access is often treated as an outcome rather than a capability. The result is suppliers that may win work, but lack the depth and resilience to sustain it.

“Market access in mining is often misunderstood,” says development finance solutions provider Phakamani Impact Capital CEO Nick van Rensburg. “Our role is not to place SMMEs into contracts, but to reduce the barriers that prevent capable businesses from competing effectively and sustainably.”

This distinction matters. Mining suppliers must navigate complex procurement processes, stringent compliance requirements, tight margins, safety standards and delivery pressures that leave little room for error. Without the right systems, governance and operational structure in place, access to opportunity can quickly become a point of failure rather than growth.

What SMMEs actually need is readiness.

In practice, readiness means operating at mining standard – with appropriate systems, financial controls, compliance discipline and operational depth to perform consistently under pressure. Yet many ESD interventions underestimate the gap between entrepreneurial capability and mining-level execution, exposing SMMEs to risks they are ill-equipped to manage.

The experience of mining transport provider Mamoja Trading & Projects founder Annah Manugu illustrates what happens when ESD support is designed around operational readiness rather than output metrics. Operating in the transport and logistics sector – one of mining’s most demanding value chains – Manugu has built a business specialising in the movement of platinum concentrate, chrome, ore and coal across the North West and Limpopo mining belts.

In November last year, Mamoja secured a R150-million contract with Sibanye-Stillwater at its Marikana operation to move ore, a milestone that reflects both scale and operational trust. Importantly, the contract was not awarded through preferential placement. Manugu applied competitively, and the business was assessed on its ability to deliver at mining standard.

“The entire year, the Phakamani programme was preparing me for this contract,” Manugu explains.

Through Sibanye-Stillwater’s Women in Mining ESD programme, designed and managed by Phakamani Impact Capital, support was deliberately sequenced. Business coaching focused on developing a credible, execution-ready business plan, with securing and delivering on a large mining contract identified as a strategic objective. Practical attention was given to compliance, operational restructuring and governance, ensuring the business could function efficiently without constant founder involvement.

With the contract now secured, Phakamani Impact Capital is in the process of securing funding for the specialised equipment required to deliver at scale, introduced at a point where the business could absorb growth rather than be destabilised by it.

The case highlights a common but often overlooked risk in ESD: Access without readiness can accelerate failure. SMMEs are frequently expected to perform at mining standard without having been built to mining standard.

For mining companies, the implications are material. Supplier failure creates operational disruption, reputational risk and additional cost, undermining both production continuity and transformation objectives. By contrast, ESD programmes that prioritise capability, sequencing and real-world readiness are more likely to produce suppliers that endure.

As mining faces increasing environmental, social and governance scrutiny, localisation pressure and the need for reliable suppliers, the question is no longer whether to invest in ESD, but how. The future of supplier development lies not in expanding spend, but in designing programmes that reflect operational reality – and equip SMMEs to compete, perform and grow on their own merit.

IMPACTFUL FACTS

As a solutions partner to the mining industry since 2015, Phakamani Impact Capital’s impact has been extensive, disbursing over R1-billion to small businesses, supporting 1 423 SMMEs, helping sustain 24 000 jobs and achieving a loan recovery rate of 93%.