Integrated Annual Review 2012 Annual Financial Report 2012 Mineral Resources and Mineral Reserves Regional overview  
 

7.2.3 Shared value: Local suppliers

Dump truck at Agnew, Australia
Dump truck at Agnew, Australia

In 2012, we spent a total of US$3.45 billion on suppliers from our host countries – or 92.3% of our total procurement spend.

It is our policy to use national and/or local suppliers, where possible. This not only helps strengthen our own local supply chains at a strategic and operational level, but also enhances our social licence to operate. In certain cases, national and/or local supply pools do not necessarily have the depth or breadth to support our needs. As a result, we actively work with current and potential suppliers within our host countries and communities to improve their business, management and production standards.

Examples of our local supplier strategy in practice include the following:

Ghana: We use local companies for stripping and hauling, employee transportation, on-site catering, fuel and grinding. We continue to play a leading role in the efforts of the Chamber of Mines to increase the proportion of procurement spend going to Ghanaian suppliers – and promote local value-adding activities.

Peru: We use local companies for the provision of heavy equipment, light transport and general services – in line with local legal requirements. We have supported the development of local suppliers since the construction of Cerro Corona – including their compliance with ISO 14001 and OHSAS 18001-equivalent standards. This has helped establish a commercially sustainable local supply pool of companies that now service a range of nearby mining operators.

South Africa: During 2012 a total of 50.5% of our procurement budget amounting to R4.1 billion (US$500 million) was spent with Broad-Based Black Economic Empowerment (BBBEE) South African suppliers (2011: 46%). We enhanced our ability to drive the transformation of our supply chain through the launch of a new Supplier Portal (which provides enhanced transparency around supplier shareholdings and BBBEE credentials) as well as a Community Capability Database (which will help us drive more localised procurement).

Figure 7.13: National/local supplier
contributions by region (US$m –
pre-unbundling)
  Figure 7.14: Local supplier spend as a
proportion of total procurement spend
by region 2012 (pre-unbundling)