Mining & Trade News

Economically engaging local content in employment saves money for the mining company. It also gives the government an advantage in tax revenues locally. In procurement of goods and services, there is further indirect benefits of local content, through benefits accrued to the non-resource sector firms providing goods and services.

Communities can receive compensation and substantial flows of revenue when a large mine is established, which can act as an important catalyst for change and growth. These monetary flows can transform the economic and social basis of communities.

In another development, the communities are also empowered to have a sense of belonging as a social change. There is also sprouting of infrastructure in terms of buildings, mining towns begin to sprout because the local population migrate to have opportunities as a result they need housing, food and essential services.

Another important source of economic benefits to communities, particularly where mining is the main activity, is the input services provided to mining operations. Companies are increasingly required to assist local business development, to outsource services, and to give preference to local businesses. On the other hand, since the company may also depend on the community for employees and services, a well-organized community can potentially make numerous demands on the company

A number of companies can adopt preferential and deliberate procurement policies towards local suppliers and distributors. Many of these can be enforced through provisions in national policies and legislation concerning foreign direct investment through, for example, joint ventures, partnerships, and outsourcing as a way of localizing multiplier effects. There is also improved supplier capacity and eligibility that increases goods and service availability.

 In conclusion, supporting local businesses provides an important means of benefiting communities and building human and financial resources. Preferential procurement policies towards local suppliers and distributors should be incorporated into mining agreements and company policy. Local procurement should be accompanied by skills development, training.

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