Two ‘mavericks’ shaking the junior mining game

Undeniable fact: It takes more than qualifications to turn one into a successful entrepreneur in the mining sector!

This is what Saziso Balang and Diketso Pitso, co-directors of Coga Mining Resources are willing to share, after resuscitating a junior mining enterprise they had shelved almost ten years ago. Coga literally translates into waking up in Barolong Setswana dialect.

Balang is an out and out Information Technology specialist. Some would feel that his rare skills would be better utilised in software development than in an essentially blue collar industry.  In mining, literally, at some point, inevitably, one has to get their hands dirty. But he insists he is destined to be in mining.

“Those who think that mining and information development do not converge might be living in a different millennium.  For those not in the know, there is information technology involved in every mining process from pit to port these days,” he maintains.

Diketso Pitso too comes from a background which is not directly associated with mining. He says after working for others he now feels “to be more in a career than a job”.

At 34, both might be considered relatively young in the business context, but they are fountains of business wisdom in their own right, after the learning curve they had experienced. They have been there done that.

The two partners, then in their mid-twenties, started the business in 2006 overconfident, until they met basic obstacles they had overlooked in their youthful zeal to succeed.

With the benefit of hindsight, Pitso confesses with candour: “We could have done things better. We are young and wet behind the ears in business matters. We got ahead of ourselves, looking at turnover and ignored steps to be followed to get attain it.”

Nonetheless, it must be admitted that they were not wholly culpable for their own failure. “We had thought that we could access government sponsored financial facilities targeted at youth like Usobomvu Fund. Unfortunately, mining was not one business sector that was catered for.”

Down but certainly not out, the two reverted back to their day jobs, but their will to invest in mining never faltered.

After an almost ten years of refining their business plan and gaining administrative experience in their respective fields, the two resumed their project in March 2015, soon after registration.

“This is nothing like a nine-to-five job where you sit behind a laptop the whole day. It’s all about getting your hands dirty, going to the mining site all the time and being hands-on with everything.

“Being in this business, I can say we are dealing with what I call Economics three which is practical and not theoretical like the one offered at institutions of higher learning. We are solving real problems and we love it,” relates Balang.

Both partners share the interest of playing in the sand and extracting raw materials. It has become their sixth sense!

Balang dispels the misconception that mining has a lot of “easy” money deep buried in it. Instead, a lot of energy, passion and substantial resources have to be poured into it. Money comes only after you have done a lot of work.”

The popular perception is that conditions in the mining sector might not favour the formation of new businesses, on the account of the global commodities price slump. However, both Pitso and Balang, contend that the situation requires smarter way of doing business. “Coega Mining Resources has instituted means to use its available resources efficiently and achieve high returns on investment,” they state.

Domestically, the mining sector’s contribution to Gross Domestic Product (GDP) has shrunk conspicuously since 1994, according to information from the South African Chamber of Mines. Although may be the case, Balang sees mining continuously being key to South Africa’s economic development in years to come and Coega Mining Resoruces playing a critical function.

“We want to contribute to the mining sector GDP and generate sustainable jobs in the process,” he says.

Coga Mining Resources’ administrative offices are in Roodepoort, with mining in Kenneth Kaunda District, North West. Its specialty is “total mining solutions”. One of the common minerals which the company produces is manganese, a mineral similar to iron, which is found in animal feed, fertiliser, tiles, windows and batteries.

In a common narrative Transform SA Online has heard countless times, the company would greatly do with  some capital injection. To this end, discussions are ongoing with the possible sponsors that have been identified, says Balang. “We know we have to be patient as the process can be very tedious, with a lot of processes to be followed.”

One can emphathise with ….as a start-up is building a profile in a market in which government departments and  big companies are fixated with their preferred suppliers and are not willing to try different sources.

“Government, which we expect to support small businesses, still relies on private and foreign companies,” worries Balang.

If sustaining operations is complicated, setting the foundation is not any easy, he adds.

“It seems odds are stacked against those who want to go into the junior mining space”

Specifically, to start operating a prospective investor has to bear a laborious process, emphasises Balang. “Firstly, for one to be granted a mining licence is arduous. Secondly, financiers or government are reluctant to disburse funds to junior minors to kick start operations or exploration. Thirdly, there is lack or limited access to geological information. Lastly, the Department of Mineral Resources cold-shoulders small miners when they seek an audience. ”

The industry is always skeptical about the credibility of newly established junior minors. Coga Mining Resources takes this as a chance to prove that it is in the sector for the long haul. More advantaged are companies with management that have industry track record, for instance someone who has served as a manager at a certain mine. “We are in advanced discussions with industry veterans we can forge associations with. On the flipside, we are not desperate to rush into partnerships that will end up compromising our business objectives,” says Balang, adding that, despite everything, the company still aims to be renowned for dedication and passion.

The lamentable culture of “slipping an envelope under the table” has not spared the mining sector where profit margins are thin and businesses want to stay in the red. (For the uninitiated, slipping an envelope under the table is a polite expression for paying bribes).

Without assuming a moral high ground, Balang explains that Coga Mining Resources believes in the ethos of doing business ethically and still sustaining itself.

Pitso and Balang envision Coga Mining Resources creating a legacy, becoming a powerhouse in junior mining, with interests in other sectors.

“We might not have a crystal ball to tell the future but in the next 3 years we would like to grow our interest in the North West, particularly in manganese mining.”

Aware of the erratic nature of mining, Coga Mining Resources is identifying new growth avenues to spread its investment portfolio. “Mining is a stepping stone into other areas. We would like to expand our scope by branching into sectors such as media and agriculture,” says Balang. The company has already invested in other areas.

Responding to Transform SA Online’s question on what youth should do to improve their lot through self-employment, Pitso is very forthright: “A young person should take the initiative to lead the growth of the economy. Otherwise they will end up being ordinary.

“Personally I don’t want being a common man. I’d rather be a common man who aspires to for greatness.

“People should learn that it is not a crime to be ambitious, to think big beyond your present circumstances.”

Almost echoing what other established entrepreneurs have told this publication, Balang accentuates: “Get as much information as you can. Look for mentors; of course, some people will shut the door in your face, but someone will be willing to listen. Have a clear course of action in your mind.”

He cautions against that the pursuit of quick riches is the undoing of many a black owned busineses. “Easy come. Easy go.   The most important thing is to build relationships, constantly work on them.”

As of now, the company does not have full time employees, opting to engage consultants when need arises. Adding more capital equipment is another objective. New equipment result will translate into efficiency.

Balang says Coga Mining Resources believes in a healthy dose of work and recreation. As a recess from a hectic schedule, the company organises braais and swimming.

The country is passing through a precarious phase where the gap between the rich and poor is yawning alarmingly. In this kind of environment it is thoughtless for companies not to be involved in some way to address the causes or manage the consequences of this phenomenon, argues Pitso.

“These days, people put self-interest beyond everything else. For us, we want to help disadvantaged members of the society, where we can. We are looking at empowering through education.”

Information compiled by Zinhle Motsepa

Edited and adapted for Transform SA Online by Transform SA Online Editor