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.
products were supplied, representing US$70M+ in national Kyrgyz purchases.
of Öksüt’s goods and services were purchased nationally.
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.
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.
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.