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(The Project Alchemy – Lefa La Rona Trust Case Study is featured on page 49 – 52)
This benchmarking study was produced by Tshikululu Social Investments, South Africa’s leading social investment fund manager and advisor, for Richards Bay Minerals (“RBM”). The aim of the study is to present examples of best practice in areas which can be used to strengthen the governance and the social development intent of the current RBM trusts.
The mining industry remains an important sector of South Africa’s economy from the perspectives of its financial contribution and its role as a significant employer. However, there are on-going challenges with the transformation of the sector and the delivery of tangible benefits to the mining communities. Some of these issues have led to tension in the communities as well as community unrest, affecting the mining companies’ social license to operate.
Community trusts are often used as a preferred vehicle by the mining companies for their B-BBEE transactions. This trend was further cemented by the introduction of the revised Mining Charter in 2018, which explicitly spells out requirements for a 5% equity equivalent benefit for communities. Unfortunately, achieving meaningful benefit to mine workers and surrounding communities through the use of community trusts has not been successful in many instances. Despite the challenges, there does not seem to be better alternative governance structures, and there is no consensus on what the optimal vehicles for achieving intended empowerment might be.
METHODOLOGY
This report sets out the key findings from research and interviews conducted between August 2021 and February 2022. Tshikululu employed both primary and secondary data collection methods, namely desktop research, literature and policy review, and key informant interviews. 13 key informant interviews were conducted, with either trustees or management of 11 community trusts or groups of trusts.
BEST PRACTICES
The key findings are distilled into best practices that provide insights into the key characteristics shared by well-managed trusts from the perspectives of governance, operation, and strategy to achieve longterm sustainable impact for the communities they serve. It is important to recognise the wide range of community trusts in the research and beyond that differ in their structure, context, culture, and circumstances. What works for one community trust may not work for another community trust.
