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Local procurement

Linking our demand for goods and services with local economies is essential to create private sector growth and jobs in the regions where we operate. We recognise that the gap between the capacities of businesses in local communities and our procurement requirements is often significant. Therefore, we have various initiatives underway to develop local suppliers and increase our local procurement.

Employees in discussion near the drill rig at Los Bronces copper mine, ChileEmployees in discussion near the drill rig at Los Bronces copper mine, Chile

Supplier development programmes

To promote opportunities for local businesses, we support programmes that increase the competitiveness of both current and potential suppliers. An example of a supplier development programme is one supported by our Brazilian Iron Ore business in partnership with local government and a local trade association.

This initiative provides a training and qualification programme for local businesses, particularly small and medium-sized enterprises (SMEs), with the objective of promoting economic development by supplying us with products and services.

We have also initiated supplier development programmes in Chile. Financing of these initiatives is provided equally by our copper operations, Chile’s Economic Development Agency and participating companies. The initiatives benchmark performance, train suppliers in different areas of business management, support improvements in coordination and registration of suppliers and design, and implement continuous improvement systems for suppliers.

We have initiated a project to investigate ways to support and encourage local procurement in a streamlined way. The project aims to put in place consistent local procurement strategies, processes and scoring mechanisms so as to ensure we achieve common preferential procurement goals that benefit our stakeholders at national, regional and local levels. A multi-disciplinary team, spanning across our operations, was formed in 2009 to focus and collaborate on local procurement. Throughout 2010 we will be learning from and building on best practice with regard to preferential local procurement in our major countries of operation, such as Brazil, Chile, South Africa, Peru and Australia.

For more information on local procurement in your area, please contact us.

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