Interview with Deon Heyns, Managing Director, Barloworld Equipment Zambia on the importance of involving local communities around mining projects and the company’s overall assessment of working in Zambia.

Deon Heyns

Deon Heins – Barloworld Equipment

“Following early indications of a slowdown in the mining cycle in the final months of 2013, 2014 has confirmed the downward trend on the back of slower growth in China… However, the long-term fundamentals for Zambia remain good and we remain positive on the country’s future outlook.”

“The Barloworld Equipment theme on community development initiatives in Zambia in 2014 is “Let’s grow together”

Barloworld has been the official Caterpillar dealer in Sub-Saharan Africa since 1927. Can you tell us more about your evolution in the Zambian mining industry since you entered the market in 1994?

The company was originally named Mazembe Tractor Company, and was operating out of Kitwe supplying services to the then Zambia Consolidated Copper Mines Limited. In 1994 Barloworld Zambia was incorporated as the official distributor for Caterpillar equipment in Zambia. The head office was moved to Lusaka in 2000 and the name changed to Barloworld Equipment Zambia in 2002. Barloworld has been operating in Zambia for 20 years now, and is extending it’s reach in the Copperbelt having invested US$12 million to build a new modern facility in Kitwe that will be inaugurated on August 27th 2014. In 2014, Barloworld Equipment also renewed its ISO certification in Lusaka and will be rolling out its ISO systems to the new facilities in Kitwe. On the safety side, we still maintain a zero lost time injury frequency rate, which means we have had no serious injuries this year. Recently, Barloworld Equipment also had great successes in the country, such as the award of a R1.1 billion contract with First Quantum Minerals Ltd.

Revenue at Barloworld Equipment increased by 11% in the six months to March 2013. How has the company been performing in Zambia and what are your expectations for 2014?

Following early indications of a slowdown in the mining cycle in the final months of 2013, 2014 has confirmed the downward trend on the back of slower growth in China, consequent declines in commodity prices, and the slowdown of the global economic performance. In terms of prices, copper has decreased from about $8,500/MT in 2012 to just under $7,000/MT in 2014 and the worldwide global capital shortage affecting the industry has spread to the country.However, the long-term fundamentals for Zambia remain good and we remain positive on the country’s future outlook.

Could you elaborate on Barloworld Equipment contract with First Quantum Minerals, how has this project been performing?

On the First Quantum Minerals Ltd Sentinel copper deposit, Barloworld Equipment is supplying three Caterpillar 7495 rope shovels and seven CAT MD6640 drill rigs. The assembly of two of the shovels has been completed and the other is still in progress though on schedule. Of the seven drills rigs, four were completed and three are currently being delivered and completed. Barloworld Equipment has also deployed a team of 40 technicians and, at the end of the project, some of the technicians will be retained to support the equipment on site. At Sentinel, Barloworld Equipment will also be establishing a facility from where we will do limited parts supply and technical support for the mining machinery.

Which of your mining equipment is most popular with the local mining industry and how selective is the mining market in Zambia when it comes to earthmoving equipment?

There are no specific “most” popular mining equipment as it depends on the type of mining operation and the extent to which companies upgrade or replace fleets. On the large mining equipment side, we supply hydraulic excavators, rope shovels, off-highway trucks and rotary drills. There is also the support equipment that we provide such as graders, dozers, articulated trucks and front-end loaders. The current infrastructure spending by the Government in the country is contributing to increasing our overall sales. The rental part of the business has also seen an uptake, where we rent smaller equipment such as graders, excavators, articulated trucks, backhoes and paving equipment. Customers who rent from us have the option to buy and normally they acquire the equipment after a certain period.

What is the importance of involving local communities around your project areas in Zambia?

To create long-term value for all stakeholders, one has to create value for everyone including employees, customers, principles, suppliers and most importantly the surrounding communities. It is absolutely critical for Barloworld Equipment to be involved with the surrounding communities in which we operate. The Barloworld Equipment theme on community development initiatives in Zambia in 2014 is “Let’s grow together”. We have selected two orphanage homes in Kitwe and Lusaka and are supporting them by providing financing, upgrading the facilities, providing blankets amongst others and imparting skills to grow vegetables and our commitment is such that we encourage our employees to spend time at the orphanages even during work hours.

What is your overall assessment of working in Zambia?

Zambia is a good place to work in with good prospects for future development. Barloworld Equipment is investing US$12 million on its new facility in Kitwe, a parts warehouse, modern workshops and product specific training facilities. Having been present in the country for 20 years we intend to stay. We are also investing substantially on the local workforce. Of our local employees, only 5% are expatriates and this figure will decrease to 3% over the next six years. In 2013, Barloworld Equipment promoted locals rather than expatriates into the more senior positions and, as we speak, we haveemployees training in the USA on our larger machine products. Seeing how the machines are constructed will provide them with a unique insight and added value when they return to provide professional on site support to our clients.

Barloworld Equipment – In Numbers

Year entered the country: 1994

Employees: 300

Facilities in Zambia: 6 (Lusaka, Chingola, Mufulira, Solwezi, Lumwana and Kitwe)

Key contact: Deon Heyns, Managing Director – Email: dheyns@barloworld-equipment.com

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