Benefiting communitites: bringing local suppliers into the supply chain

Anglo American explains how a formal local procurement strategy helped it build trust with a community concerned about the impacts of mining

Sponsor’s feature

• Anglo American

“It’s one thing to be passionate about sustainability. It’s another to actually do something about it. Selma actually stood up and made it happen.”

Linda Wedderburn, Supply Chain Sustainable Development, Anglo American

In late 2010, Anglo American started to seek final approvals for the Quellaveco project, a potential copper mine near the city of Moquegua in southern Peru.

Despite the economic benefits the project would bring to the area, gaining a social license to operate would be difficult. The troubled history of mining in Peru meant that there were low levels of trust and fears about the impacts on local communities.
The project team knew that the best way to allay these concerns was to ensure that a broad cross-section of the community would benefit from Quellaveco’s development.

Early in 2011, Selma Fernandes began working with the Quellaveco project team to build a local procurement strategy for the project. This was ground-breaking work: although Anglo American often procures from local businesses, this was the first time that the company had drawn up a formal local procurement strategy.

Selma temporarily moved from her hometown of Sao Paulo to Lima for seven months to support the Quellaveco project team. Together with the local team, Selma was responsible for designing the strategy, spending time in Moquegua to understand the circumstances of the communities and where local suppliers could add value to the supply chain.

The resulting strategy has been approved by the Quellaveco steering committee.

Local businesses are more supportive of the project, as they can see that Anglo American is genuinely committed to supporting them.

“Selma’s dedication is remarkable. She made personal sacrifices to collaborate, listen, involve other people, and then put the structure in place,” says Linda.

Selma’s work at Quellaveco has convinced many other operations of the value of local procurement strategies. She has run procurement workshops for several business units, and the Michiquillay project has asked for her support in this area.

The template and local procurement tools Selma helped to develop are now being used globally throughout Anglo American.

In August 2012, after some 14 months of negotiations, Anglo American reached an agreement with the local community and Moquegua’s regional government on a way forward for developing Quellaveco.

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