Local Economic Development projects in mining often fail for one simple reason. Costing happens after the idea, not as part of the idea.

A familiar pattern repeats across operations. A mine identifies a project that appears aligned with the municipal Integrated Development Plan. A school upgrade, a skills centre, a small agricultural initiative. The project sounds right, reads well in the SLP, and satisfies the alignment test. Only then does the costing begin.

That sequence creates risk. Without a costing logic, projects drift into over-spend, under-delivery, or both. What looks affordable on paper can become unsustainable once implementation begins.

There is a simpler way to work.

Start with a reference cost, not a concept. LED projects sit in recognisable categories. Classrooms, libraries, early childhood centres, agri hubs, skills facilities. Each category has a realistic cost range per unit, per learner, per beneficiary, or per square metre. These benchmarks already exist across approved SLPs and implemented projects.

Once the benchmark is set, alignment becomes a filter, not a driver. You test the project against the IDP and ward priorities, rather than inventing a bespoke intervention every time. The question shifts from ‘what can we build’ to ‘what scale is defensible’.

A simple rule of thumb applies. Divide the proposed project cost by the realistic output. If the cost per beneficiary, learner, or job created falls outside the benchmark range, the project needs redesign. Either the scope is inflated or the impact is overstated.

This formula is what separates compliant projects from credible ones. It allows mines to see early whether they are under-investing, over-investing, or misallocating funds relative to impact.

At SLP4Good, we use this approach as a first screen before any stakeholder engagement or concept finalisation. It prevents well-intentioned projects from failing at implementation stage and gives the DMRE a clear, defensible logic when plans are reviewed.

If your LED projects feel expensive but thin on impact, or modest yet difficult to justify, the problem is rarely alignment. It is almost always costing.

There is also a useful sense-check that sits outside the MPRDA but remains widely accepted in corporate practice.

The 1 percent of NPAT test, drawn from the BBBEE Codes, provides a practical back check on LED spend. While not a regulatory requirement for SLPs, it is often used by boards, auditors, and sustainability committees to assess whether social investment is proportionate to profitability.

Applied correctly, the test is simple. Annual LED expenditure should not drift wildly above or below roughly 1 percent of net profit after tax over a reasonable cycle. If a mine is consistently spending far more, the projects are likely over-scoped or poorly designed. If it is spending far less, the projects may be compliant on paper but lack real substance.

Used together with unit-cost benchmarking, the NPAT test acts as a brake and a compass. It prevents emotional over-investment during good years and under-investment during lean ones, while giving decision-makers a familiar financial anchor.

At SLP4Good, we use the NPAT test as a secondary filter. It never replaces IDP alignment or project logic, but it strengthens defensibility when plans are reviewed internally or challenged externally.

For support in benchmarking, project sizing, and fit-for-purpose LED design, contact SLP4Good.