Mining is the first stage of a long supply chain that converts mineral resources into products that meet the needs of everyday life.

We focus our supply chain responsibility efforts on activities where we can have the greatest influence: our own operations, contractors working at our sites, local suppliers, and Hudbay products up to the point from which they are shipped (in Manitoba at the plant gate, and in Peru at the port loading facility).

Suppliers are often viewed by stakeholders as an extension of our business. Any unethical, unlawful or irresponsible acts and behaviours by them can exert a high cost on Hudbay’s reputation and ability to sustain and grow the business. Our internal audit process includes supplier due diligence, and to further address these risks, in 2017 we adopted a Supplier Code of Conduct and Ethics, which states the minimum standards of conduct expected by our suppliers. These include:

• Reading, accepting and complying with the Supplier Code of Conduct and all applicable policies;
• Complying with all applicable laws, rules and regulations;
• Conducting business honestly, ethically and in accordance with social codes;
• Complying with anti-corruption laws and informing Hudbay of any conflicts of interest;
• Protecting confidential information;
• Respecting human rights and observing Hudbay’s Human Rights Policy;
• Establishing practices and procedures that protect the health and safety of workers and the environment;
• Accepting Hudbay’s supplier due diligence process; and
• Reporting suspected violations of the Supplier Code of Conduct and applicable compliance policies by any supplier or Hudbay personnel.

Supply Chain Performance

The direct supply chain for our copper concentrate and zinc metal products originates in Hudbay’s own mines in northern Manitoba and Peru.

The indirect supply chain for energy, goods and services used in transforming ore and concentrate into products includes thousands of suppliers, who provide operating and maintenance supplies, energy and fuels, and capital goods:

In Peru, our top 50 suppliers accounted for 84% of our spending, and 95% of our spending was with suppliers based in Peru.

In Manitoba, our supplier base relates to production operations and capital projects. Our top 50 suppliers represented 58% of our spending in 2016, and 90.6% of spending was with suppliers in Canada. These suppliers provided goods and services such as engineering services, electricity, spare parts for equipment, underground haul trucks and other capital equipment.

Hudbay’s top 10 suppliers in 2017, representing 38% of procured value, were (in alphabetical order):

Auramet International LLC	Manitoba Hydro
CN (CAD)	Moly-Cop Adesur S.A.
Corporacion Primax S.A.	Servosa Cargo S.A.C.
Enel Generacion Peru S.A.A.	Stracon GYM S.A.
Ferreyros Sociedad Anonima	Zamine Services Peru S.A.C.

Products

The two main products we produce are copper and zinc. Copper is essential for today’s society. It is a vital component in electronics and electrical transmission. In health care, new applications for copper are being identified due to its ability to kill bacteria. Zinc is vital to the endurance of metals in manufacturing. Both metals are important to the renewable energy industry.

Our copper concentrate and zinc metal are produced at operations in Canada and Peru:

• Hudbay sold 58% of its copper concentrate to traders and smelters that delivered to customers in Asia (including India) and 42% to traders and smelters in the Americas and Europe. From there, several stages of smelting and refining the copper content ultimately result in 99.99% pure copper, the building block for many of life’s essentials.
• We ship cast zinc metal produced at our Flin Flon zinc plant by rail and truck to industrial customers throughout North America (primarily to galvanizers who use it to protect steel from corrosion).

The safety data sheets (SDS) that accompany copper and zinc products provide details of their composition, toxicology, handling, storage and exposure issues. We further meet our product stewardship commitments by collaborating with governments and industry associations, including the International Zinc Association and the European Copper Institute, to guide our compliance with international requirements such as those provided by the International Maritime Organization (IMO).

The IMO specifies hazard classification criteria for bulk cargoes, and the International Convention for the Prevention of Pollution from Ships (MARPOL) imposes restrictions on the disposal of bulk cargo residues classified as “harmful to the marine environment” (HME) under the amended Annex V of the MARPOL convention. Hudbay engaged the European Copper Institute (ECI) to determine the MARPOL classification for Constancia’s copper concentrates. From this study and others, all Hudbay copper concentrates have been determined to not be HME.