Cobus Loots, CEO of London- and Johannesburg-listed mid-tier gold miner Pan African Resources, says it is building a R40m, 15ha blueberry farm in Barberton, Mpumalanga, where his flagship mine is situated, because conditions in the local community are "so desperate" that it can no longer be business as usual for the company.
Barberton Mines has consistently exceeded the socioeconomic development commitments required to fulfil its mining rights obligations and maintain its social licence to operate, he says.
It has built schools and clinics and contributed significantly to the economic development of the town.
"But we felt that compliance is no longer enough," he says. "We needed to do more, we needed to go beyond compliance."
The biggest need is for jobs.
Unemployment in Barberton is "dire", he says. "It's desperate." Particularly among the youth.
He cites statistics which put youth unemployment around the country at 60%.
"The Barberton situation is probably even worse."
We have surplus
— Cobus Loots, CEO of Pan African Resources
land and water and
access to the right
agricultural skills
and expertise
The Barberton gold mine is by far the biggest employer in town, with 2,400 permanent employees on the payroll. But he concedes it's a drop in the ocean of need.
"We're acutely aware that a mine cannot employ everyone in its surrounding communities."
The only answer was to create a parallel economy that would provide additional employment and create sustainable economic opportunities for the town long after the mine reached the end of its life.
And so they looked at their available resources.
"We said we have surplus land and water, we have the right climate, we have access to the right agricultural skills and expertise."
They consulted farming specialists to identify a high-yield export crop that was in high demand and would thrive under local conditions.
Blueberries was the answer.
Apart from the weather conditions being so conducive, an added advantage is that "with blueberries you have early ripening, so you can be first to market and get a better price".
But front of mind were the litany of projects that had been embarked on optimistically and had bombed.
"There are so many failed projects in agriculture and elsewhere. Strawberry farms fail, bakeries fail, road projects fail."
They acknowledged with brutal honesty that in spite of funding and wonderful plans, long-term success was by no means a foregone conclusion, even for a world-class gold miner.
"We had to say how can we do this differently in a way that makes it sustainable and economical? Miners mustn't try and become farmers. Just as farmers would make terrible miners, miners are not great farmers.
"Like anything in life, it's about the people. You can do what you want to but you have to have the right people."
They've partnered with Primocane Capital, which has a record of running
successful blueberry farming operations in the Western Cape.
"We're leaving it up to the professionals," Loots says. "We have enough issues with mining. We're focused on mining, but we've put together the right team to run with this."
Pan African Resources has invested R40m in the first 15ha phase (roughly the size of 15 rugby fields), which has already created 80 jobs and will create 400 seasonal berry-picking jobs from June to October, rising to 1,000 in the expected second phase.
They will make an additional 50ha available for the second and third phases of the blueberry farm, which is expected to provide 800 more employment opportunities in surrounding communities for people who have no prospects and no sources of income apart from social security grants.
The first harvest of between 80,000t and 100,000t of blueberries is expected to be ready for export to Europe, the Middle East and the Far East by mid-2022, "but we're already seeing a difference in communities around the farm", says Loots.
"The continued prosperity of the farming project is likely to further revitalise the community through improved opportunities for local retailers and other businesses, as well as possibly leading to other growth opportunities in the area, such as packaging and
logistics facilities," he says.
"This demonstrates what can be done when you have people with the right focus and the right resources."
The number of permanent
employees on the Barberton Mines
payroll
— 2,400
He says the export market for blueberries is "massive" and growing, especially in China, as consumers learn about the nutritional value of blueberries.
"There is certainly greater demand than we can meet."
The company's blueberry farming venture is not about charity, he says.
"This is a commercial venture and our shareholders expect a return.
"We have to do this on a commercial basis. That will make it sustainable and the economic opportunities it creates will multiply. The only way for this to be sustainable is to make it attractive from an economic investment perspective."
All the initial capital has come from Pan African Resources itself but funding for future phases can't be taken for granted.
"Capital is a scarce resource and we'll have to figure out how we fund the next phase. Once we've demonstrated the economic viability of the venture it will be a lot easier for us to raise finances."
Nor is their farming venture only about complying with environmental, social and corporate governance targets increasingly expected by investors.
"The whole world is on an ESG [environmental, social and corporate governance] drive, but we want to go beyond mere
compliance."
As well as being critically important from a sustainability point of view, meeting and exceeding ESG targets makes excellent commercial sense, he says.
They have an option to acquire gold-bearing dumps near Krugersdorp and Soweto from the failed Mintails mining company and are awaiting the outcome of a feasibility study to tell them if it makes economic sense, given the significant environmental liability they'd be inheriting.
He and his team believe they could extract 1-million ounces of gold from the dumps and in the process clear vast areas for economic development. By positioning this as a rehabilitation project he says they'll be able to tap into green funds in Europe to
finance the operation, leaving them and their investors with clean profit.
"We need to find commercial solutions for the issues that face South Africa. Hopefully we can do this with the Mintails dumps on the West Rand."
And with blueberries in Barberton.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.