Social Impact Local
Purchasing

Spending on local goods and services is one of the ways in which we contribute to the sustainability of our host communities. It leads to more local jobs and income, transfers skills and technology, and helps create vital domestic business networks. Importantly to us, local purchasing can also lower costs in the long run and contribute to our social licence to operate.

Hudbay’s approach to local purchasing is guided by five principles: mutual benefit; fairness, competitiveness and transparency; targeted capacity development; informed and integrated decision-making; and collaboration with community representatives and available supporting organizations.

In Peru, we are honouring commitments to give first consideration to local suppliers for services such as equipment rental and catering, as set out in the life of mine community agreements. We also help them register their business and formalize quality standards and procedures so they can qualify for potential business opportunities with other companies, and we work with them on sales and marketing strategies.

In Manitoba, we have longstanding relationships with local transportation and construction contractors. We work closely with these suppliers, often helping them establish systems and processes to fulfill their social and environmental responsibilities.

2015 Performance Highlights

Corporate

• We finalized a corporate Local Procurement and Employment (LP&E) Standard aimed at ensuring that, at each site, we actively identify opportunities for supporting and utilizing local workforce skills and business capacity to provide goods and services, include LP&E when negotiating community agreements, and integrate LP&E into ongoing business processes.

Manitoba

• Payments to suppliers located in our region of northern Manitoba and northeast Saskatchewan totaled $17.7 million in 2015.
• Our Exploration team met with the Opaskwayak Cree Nation (OCN) Nakow Mining and Supply company to discuss possible partnerships in the area of early exploration. This type of partnership has worked for us before, and we presented an overview of geophysical activities, challenges and risks.

Arizona

• In preparation for when our permits are received, we created an online contractor and vendor management system accessible from our corporate website. The system allows contractors, vendors and suppliers to identify themselves and their capabilities so they can be considered for future work.
• We also met with local unions, contractor groups and government representatives to inform them of potential future business opportunities.

Peru

• About 60 of the contractors working at Constancia are from local communities. Most are focused on trucking and hospitality. Total purchases from local enterprises were $25.9 million.
• In 2015, we worked with the CMDs (community development committees) in Uchucarco and Chilloroya to buy 25 trucks that they could rent to local contractors to transport Constancia concentrate to the port of Matarani.