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Sector Case Study: Mining
Box 5.6 Newmont Ghana’s Local Procurement Policy The Newmont Ghana mining company ran the successful Ahafo linkages program from 2007 to 2010. This program trained 53 local suppliers in the area immediately surrounding the Ahafo mine, contributing to US$14 million in local procurement. Newmont has more recently rolled out a local procurement policy in Ghana, which outlines areas of support and preferences to be given to various categories of companies (based on geographic location and level of Ghanaian ownership). Under the local content policy, Newmont aims to increase local expenditure each year, with a higher share going to Ghanaian firms with highest local value added. Among the areas of support provided are: • Increase Newmont’s awareness of goods manufactured in Ghana through: –– A formal process of supplier registration –– Identifying products currently being purchased by other mining companies • Broaden access to opportunities for potential suppliers: –– Supplier open days –– Greater use of open tendering, including for all major longer-term service contracts for mining operations as existing agreements expire –– Advertise available work and goods requirements via the Internet –– Publish local spending profile data on a quarterly basis • Apply preferences in assessing tenders in the following order (all else being equal): “local-local” companies; Ghanaian owned; Ghanaian participation; Ghana registered; international • Build capacity of local companies through the development of collaborative partnerships between industry, nongovernmental organizations, and existing foreign and Ghanaregistered companies • Apply the policy across operational and capital spending • Effectively communicate policy and achievements, including through supplier open days, the West African Mining and Power Conference, and online reporting on local spending Source: Newmont Ghana 2010.
will be a one-stop shop to support local suppliers with information dissemination, technical support, and training focused on providing information on upcoming opportunities, financing options, prequalification processes, HSE requirements, and procurement and tendering principles. It will also host external specialists to assess local businesses in terms of quality, HSE performance, managerial capabilities, and to provide training and mentoring support in terms of tender preparation and business improvement. The establishment of supplier databases and vendor registration systems also support access to supply chain opportunities in the mining industry. Supplier databases can be publicly or privately managed and are used to prequalify Making Foreign Direct Investment Work for Sub-Saharan Africa • http://dx.doi.org/10.1596/978-1-4648-0126-6