Socio-economic empowerment for historically disadvantaged South Africans is a central objective of the national government. At its South African businesses, Glencore is implementing the spirit and the requirements of the Mining Charter and is leading a pilot compliance exercise with the Department of Mineral Resources.
Glencore's ferroalloys business has developed a Mining Supplier Park project to combat residual social injustice and to promote economic empowerment. The project aims to create sustainable job opportunities and to provide skill development and training. While Glencore's ferroalloys business initiated the project, we are seeking partnerships with other South African mining companies to broaden the impact that the Mining Supplier Park will have. The park site is located outside Steelpoort, near the Lion chrome smelter, within the province of Limpopo, which has a total population of about 3.1 million people and a current unemployment rate of 36.8%.
After four years of studies and planning, the major infrastructure services are complete and construction is now underway on the first phase of the project. The work has been contracted to a joint venture between a leading South African construction company (40%) and a local black-owned company (60%) to ensure that local workers will benefit from the income and the skills training opportunities. Glencore's ferroalloys business and its partners are financing the building of 'mini-factories' to accommodate small existing and emerging local companies. In addition, a large number of established mining suppliers and vendors, representing a wide range of industries, have expressed strong interest in the Mining Supplier Park. Occupants of the industrial park will be able to take advantage of Glencore's nearby training centre and other opportunities for skills development.
In addition to the economic benefits of job creation, all profits from the project will go into a community trust for the use of local communities around the participating mines. Glencore has made an initial investment of ZAR25 million ($3.7 million) to start the development process and has committed an additional ZAR35 million either in direct funding or in loan guarantees for implementing the Mining Supplier Park business plan. Once the first project phase is operational and the commercial and industrial space is fully leased as expected, the park will become profitable and self-sustaining.