Centerra recognizes the vital and unique role that local content plays in socio-economic development for our project-impacted communities. Local content refers to both local hiring and procuring goods and services from local suppliers. Local content strategies provide opportunities for employment and enhance local economic activity, improve quality of life, including health and wellbeing, and provide the opportunity for the communities to fully and actively participate in the benefits of the mining project.
Local Hiring
98.5%
At Kumtor, 98.5% of our workforce are Kyrgyz nationals, with the most significant hiring done in the Issyk-Kul region, defined as our area of impact.
We make it a priority to hire locally and allocate resources to developing local skills and capabilities.
In 2017, Mount Milligan began developing an Indigenous Employment and Training Plan to design recruitment and retention initiatives tailored to the needs of area Indigenous groups. That year, we collaborated with both Indigenous groups and community colleagues to develop workplace readiness training programs for Mount Milligan.
In 2018, Mount Milligan developed a customized Pre-Employment Training and Education Readiness (PETER) program in partnership with McLeod Lake Indian Band, Nak’azdli Whut’en, and the College of New Caledonia. The program ran successfully in 2018 and 2019.
Mount Milligan also entered into a partnership with the two area school districts to develop a mining education and training program for grade 12 students. In October 2019, the pilot of this program launched with six students.
Similarly, Kumtor supports vocational training programs for people in nearby communities. In partnership with Technical Vocational School #27 and Technical School #91, Kumtor awards up to 12 scholarships annually for individuals to pursue culinary or auto mechanic studies, supplementing their education with practical experience gained on site.
six
In 2019, six PETER graduates were offered 12-month work terms at Mount Milligan.
Local Procurement
By purchasing locally, we increase the amount of money that stays within the communities, regions and countries where we operate, while supporting the development of local businesses both during our operations and beyond the life of our project.
Local procurement benefits communities, but in many cases it is also cost competitive and decreases our lead times while increasing the resiliency of our supply chain.
In 2019:
11,000+
products were supplied, representing US$70M+ in national Kyrgyz purchases.
92%
of Öksüt’s goods and services were purchased nationally.
21%
of our spend in British Columbia was local.
Our strategy is to buy local when feasible, then regionally and subsequently at a national level. Our community relations and supply chain teams provide communities with information about local procurement opportunities at different stages of the project. Remaining transparent and setting realistic expectations with local stakeholders is paramount in developing and maintaining a local supply chain.
In addition to purchasing goods and services locally, contracting opportunities are provided to Indigenous groups in British Columbia. This includes hiring companies owned by local First Nation Bands or Indigenous entrepreneurs as well as companies that have joint ventures in place with Indigenous groups. Services procured this way for Mount Milligan and Kemess include catering, transport, road work, security, exploration drilling, water transfer, and concentrate handling and hauling.
As part of our ongoing efforts to support Indigenous businesses, in 2019 we developed a Local Supplier Directory, which is built on inputs provided by local communities and Indigenous groups. The directory includes information on companies owned by local and Indigenous entrepreneurs and by First Nation Bands. Our supply team uses the directory as a quick reference tool when identifying potential local suppliers for a product or service.
To minimize supplier dependence on the mining project, we have encouraged local suppliers to take proactive steps to broaden their customer base.
Supplier Expectations
We will only work with sole proprietors, partnerships or companies that comply with all legal requirements, including having a valid business licence.
All suppliers, whether local or international, are expected to comply with Centerra’s Supplier Code of Conduct while doing business with us.
Goal
Develop a framework for assessing ESG supplier performance and achieving timely remediation of ESG non-conformances.
Removing Barriers to Entry
To ensure that our local suppliers meet our quality, health and safety requirements, at Kumtor we partner with local organizations in capacity building initiatives. In select situations, we provide financial resources as well as coordinating training and development with industry associations, vocational schools, financial institutions and development agencies.
To support suppliers in completing the tender process, in 2019 we provided a supplier awareness session at Kumtor. We shared key information on completing the application process and gave an overview of our expectations of suppliers, including adherence to all legal requirements.
Understanding the barriers to entry that small and medium-sized enterprises face, we have taken measures to help promote market accessibility, including:
- Introducing SMEs to development and finance partners
- Providing flexible payments, including advance payments, when appropriate
- Willingness to accept legitimate increased costs
- Unbundling of service or goods contracts into smaller pieces that are more suitable in size for low-capacity suppliers
Such flexible procurement processes, though, are intended to be short-term solutions only and are implemented to help businesses develop on-the-ground skills and capacity. We communicate the temporary nature of these processes as we encourage local businesses to become more competitive.
2019 Spending on Local Suppliers by Region
| USD | Total Spend | Local Procurement Spend | Local Spend % | National Spend (excl. local) | International Spend | National Spend as % of Total Spend |
|---|---|---|---|---|---|---|
Canada |
$300,565,896 | $62,377,108 | 21% | $225,665,006 | $12,523,782 | 75% |
Kyrgyz Republic |
$285,090,753 | $15,256,016 | 5% | $55,504,641 | $214,330,096 | 25% |
Turkey |
$51,881,678 | $7,969,629 | 15% | $39,750,509 | $4,161,539 | 92% |