Local procurement

Kinross aims to support sustainable local businesses. In the long term, we know that subsidizing local businesses will not contribute to their long-term viability and success. Our local business program is intended to help suppliers develop the capacity to effectively compete and win business from Kinross while meeting the Company’s standards for due diligence, quality, health, environment and safety. Our aim is to purchase a large percentage of goods and services within the local communities, regions and countries where we operate, with the target of procuring 75 - 80% of our goods and services within the host country.

To facilitate local procurement, each site identifies the specific types of suppliers that are the focus of the local business program, depending on the context of each site, project and region. In some cases, in addition to “local” geographies (i.e., geographic area), the program may extend to regional and national geographies. Sites identify suppliers that are eligible for the local business program, identify goods and services that are preferentially purchased locally (i.e., a “buy local first” list), and develop procedures to review all solicitation requests to determine whether they fit within the scope of the local business program.

Each local procurement program is managed by the supply chain representative responsible for implementation and is administered by a cross-functional committee comprised of representatives from community relations, human resources, operations and maintenance, health and safety, communications, legal, regional leads for local business programs, and other Kinross stakeholders.

To advance our local procurement program, in 2013 we initiated the development of a pre-qualification program which aimed to put standards in place for smaller and local and regional suppliers to Kinross. The program will help our site supply chain team evaluate suppliers based on their record of safety, workplace standards, capability, (i.e., worker qualifications/certifications), as well as their history with Kinross. The pre-qualification program is being piloted in 2014.

2013 PROCUREMENT 1
 Local 2Total In-Country 3Imported
Brazil 10% 87% 13%
Chile 35% 98% 2%
Ghana 1% 70% 30%
Mauritania n/a 4 46% 54%
Russia 22% 61% 39%
United States 69% 96% 4%
Kinross 22% 74% 26%
  1. Procurement includes total spending on goods and services including capital expenditures.
  2. “Local” is defined as the applicable “local” administrative unit (this varies by site but generally corresponds to municipality, county, or district) associated with the mine’s area of influence.
  3. “In-country” spending includes payments to commercial enterprises if the commercial enterprise is registered in the country for tax purposes.
  4. In Mauritania Kinross' local procurement program encompasses all suppliers domiciled in the country.