Ten years ago, Samuel Molefi listened to the nagging voice of independence in his head and resigned from his stable job in the mining industry. He knew the time had come to focus full-time on his dream of starting a contract mining company. Fast forward to 2019 and Samuel is the co-owner with his wife, Christina, of Modi Mining, and the winner of the 2019 Entrepreneur of the Year Competition sponsored by Sanlam and Business Partners.
“Modi” means “root” in Setswana and Samuel explains that he chose the name because roots grow under the ground – where most mining takes place. “The higher a tree grows, the deeper the roots grow – what people see above the ground requires a lot of growth and hard work below the surface,” he says. Samuel’s own roots are also firmly established within the mining sector. He studied a National Diploma in Metal Mining at the University of Johannesburg and started his career on the gold mines of Goldfields.
Modi Mining provides companies with contract mining services, such as underground mining, open cast mining services, civil services, environmental solutions, and also manufactures and supplies mining consumables. Today the business has three offices – in Rustenburg, Middelburg and Klerksdorp – and 503 full-time employees.
“We’ve come a very long way since our humble beginnings in 2007, when I first registered the company. Shortly thereafter, the financial crash of 2008 occurred and commodity prices crashed. This placed a lot of pressure on the bigger mining companies and many of them closed their less profitable operations. Ironically, this created a business opportunity for me, as I could offer to go in as a service provider and deliver what they needed - efficiently and cost-effectively,” says Samuel.
In 2009, Samuel resigned from his job as a project manager in Mali (West Africa) to focus solely on Modi Mining. “It was really tough at first – success genuinely doesn’t come overnight. I spent the entire 2010 without any income and it was only in November 2011 when we were awarded our first job by a Platinum mine in Rustenburg,” he says.
Since then, Modi Mining has grown at an average of 30 percent per annum, a remarkable feat in an industry that has been otherwise beset with difficulties. However, this doesn’t mean there haven’t been challenges along the way. “There is considerable gatekeeping in the mining industry, so breaking into new markets is very tricky. For this reason, we have focussed on keeping our existing clients happy and we have experienced good growth here as a result.”
The other initial challenge was raising capital for a capital-intensive open cast mining project. “Our first big project required us to raise R80 million in capital upfront. We had to source this capital from multiple funders, which meant that we had many demands to meet and many parties to keep happy. Fortunately, we have developed a good track record since then and we can now approach a single funder for each project,” he says.
According to Samuel, Modi Mining is committed to putting their clients first and delivering to their needs. “This is the only way that business can work, as it makes the client sustainable, which makes you sustainable as well,” he says.
Safety is a major area of concern within the mining industry and, for this reason, it is an issue where Modi Mining takes no short cuts. “We have certain standards and procedures in the mining industry and adherence to these is key. They are well explained to our employees and we expect total compliance. If you do things safely and properly the first time, there will be no consequences or mistakes that have to be fixed,” he says.
Interacting with local communities comes naturally to Samuel, as the 44-year-old mining entrepreneur speaks a staggering seven of South Africa’s local languages. “Wherever we provide services, there are communities surrounding these mines and we don’t want to be seen as the only one benefitting from the local resources. We offer enterprise development services to small businesses and subcontract work to local businesses wherever we can. In terms of procurement, I’d estimate that between 90 and 100 percent of our consumables come from local suppliers,” he says. Modi Mining is also a prominent supporter of Black Umbrellas, a enterprise incubation initiative that has created over 10 000 jobs in South Africa to date.
The Entrepreneur of the Year Competition sponsored by Sanlam and Business Partners impressed Samuel in terms of its diligence and thorough procedures. “Our documents and financial statements were audited and the judges visited our head office to meet us and come and inspect the facilities. This gave me assurance that the results could be trusted and it was a huge confidence boost when we were announced as winners – we knew we were on the right track,” he says.
“I’d like to thank Sanlam and Business Partners for sponsoring this competition. We met some amazing local entrepreneurs through the competition and it’s great for so many local SMEs to be unearthed and recognised in this way,” he concludes.