MINING DIVISION HIGHLIGHTS 2023
- Working with 1,594 companies and a 12% increase in Local suppliers
- $657 million supply chain purchase in Coquimbo and Antofagasta
- 15 days invoice payment terms for around 90% of SMEs
- increase of 13% female employment by suppliers
- 50% local employment by suppliers
At Antofagasta Minerals, we have a close relationship with a wide range of suppliers. We interact with local suppliers from our communities, global suppliers, banks (in relation to our asset development strategy), investors, and many others.
Prior to signing contracts, we conduct due diligence in areas such as company ownership, involvement of politically exposed persons, antitrust issues, commercial behaviour, legal cases, conflicts of interest, compliance models, and procedures for the prevention of slavery, child labour and human trafficking.
All contracts include clauses relating to ethics, bribery, asset laundering, and compliance with Chilean Law No. 20,393 on the criminal liabilities of legal entities, and with the UK’s Bribery Act and Modern Slavery Act. Continuing with the process initiated in 2022, we carried out an audit to verify compliance with minimum and general standards on the part of contractor companies.
Suppliers for a Better Future Programme’s Progress
In 2023, we implemented our own Suppliers for a Better Future programme(*). Launched in December 2022, the initiative seeks to align supplier best practices with our main purpose and standards in 2025. This is a collaborative project with a focus on the development of people, communities, sustainability, competitiveness, innovation and clear Key Performance Indicators (KPI).
Our Programme’s Priorities
- Promote local employability and hiring of women, enhancing diversity and inclusion (D&I), and respect for human and labour rights. 2023 Results 14% Spent on local suppliers 13% female employment by suppliers 50% local employment by suppliers
- Reduce carbon footprint in the supply chain and promote circular economy solutions.
- Strengthen the competitiveness culture, productivity and integrity in our suppliers’ processes.
- Promote innovation among our suppliers as a lever to contribute to the challenges of the programme.
The programme, through the regional suppliers’ skills-building initiative, has given them tools to increase their competitiveness and capacity for growth and to incorporate themselves into the industry effectively and efficiently. This is particularly the case for local small and medium-sized companies (SMEs) in the Antofagasta and Coquimbo regions.
We also continued working with a world-leading consultancy company to assess our suppliers’ value chains in terms of sustainability. In partnership with the Universidad Católica del Norte (UCN), this programme aims to strengthen the capabilities of local SMEs to apply sustainability criteria and strengthen their competitiveness. In December, UCN gave training to over 50 suppliers on sustainability and associated strategic topics.
2025 Goals
- 18% spent on local suppliers
- 25% female employment by suppliers
- 45% local employment by suppliers
- Scope 3 emissions reduction target setting
We defined targets for 2025 according to the categories of regional suppliers, market development for regional suppliers, and expenditure and regional supplier recruitment.
(*) This programme includes suppliers managed by Procurement, and does not include suppliers of acid and energy among others.
Sustainability Criteria
Since 2022, we have applied sustainability criteria to evaluate bids for contracts worth over $10 million. Higher scores are awarded to companies with clear carbon emission reduction strategies and targets, robust governance, local recruitment, and diversity and inclusion.
We launched the new sustainability criteria application guide for Mining Group tenders, consolidating the application guidelines on energy efficiency, internal carbon price and sustainability performance evaluation.
Additionally, as climate-related risks and opportunities have impacted our supply chain, and with the increasing severity of sea swells which have delayed the delivery of some critical resources, Antofagasta has decided to strengthen its resilience by increasing its storage capacity and revising some of its supply chain strategies, particularly for diesel and Sulphuric acid.
In 2023, we carried out a risk screening of more than 2,500 suppliers (almost 70%) based on the type of industry and geographical location of each. We invited those suppliers with a “high” or “very high” sustainability risk to complete a 360° evaluation on categories such as water, biodiversity, local pollution, materials, chemical products and waste, safety, energy consumption, GHG emissions, diversity and inclusion, and corruption.
As part of our strategy and before sharing any compliance goals with our suppliers, we approached entrepreneurial organisations in both the Coquimbo and Antofagasta regions, such as the Antofagasta Industrial Association (Asociación de Industriales de Antofagasta) and the Supplier Qualification System (Sistema de Calificación de Proveedores), to evaluate the feasibility of our programmes, particularly at the regional level.
Working with our suppliers to achieve our Decarbonisation Target
Consistent with our Climate Change Strategy, at Antofagasta Minerals we have been developing specific strategies to support our larger suppliers in tackling GHG emissions reductions, in line with the ICMM Guidance For Accounting And Reporting Scope 3 Emissions, published in September 2023.
Our approach to addressing Scope 3 emissions is to engage with our suppliers by:
- raising awareness of their role in successfully addressing this challenge.
- assessing their maturity in managing GHG emissions.
- mobilising them to act by measuring their carbon footprint and by disclosing and defining reduction strategies and targets.
- developing short-, medium- and long-term collaborative initiatives to reduce emissions.
- collecting GHG emissions data from key suppliers at least annually to constantly improve and refine the accuracy of our calculations.
As part of our Scope 3 emissions management strategy, we joined the copper sector’s first Scope 3 emissions measurement working group, jointly with Alta Ley Corporation. The aim is to provide guidance to fill copper-specific gaps, building on the ICMM Scope 3 Guidance, and enabling harmonised reporting of GHG emissions within the industry. In addition, this working group will promote the ability of suppliers to measure and disclose their own emissions.
In line with the ICMM Scope 3 Emissions Target Setting Guidance published in December 2023 and the ICA Roadmap, Copper – The Pathway to Net Zero, we set a Scope 3 emissions reduction target of 10% by 2030. This definition covers both quantitative targets and engagement targets for suppliers.
Local Employment
Local employment is very important for Antofagasta and the result of the major productive value chain associated with our operations in both the Coquimbo and Antofagasta regions. We prioritise local suppliers and trust in their capacities to address new industry requirements and due to the role they play in our contribution to generate local social and economic value.
At Antofagasta, we believe developing the skills and competencies of members of the communities in which we work is a core obligation of ours. Los Pelambres has been working for over seven years on a local employment strategy to fulfil community expectations in terms of demand for work.
Regional suppliers of goods and services are strategic partners in achieving the success of our business, representing a key link in our value chain. These companies tend to hire local labour and have the potential to provide greater competitiveness to our operations due to the comparative advantage that they achieve because of their knowledge, capacity, and geographical proximity.
In 2023, we consolidated the employability strategy for the Antofagasta region. The strategy aims to strengthen links with the territories by generating job opportunities with two strategic focuses: employability training, and the generation of working opportunities for the communities in the area of influence of our northern operations.
Therefore, in terms of employability training, a programme has been developed that includes courses in trades such as maintenance, machinery operation, warehouse management and driving. In terms of job opportunities, a Community Apprentice Programme for Concentrator Plant Operators was developed and 11 residents of the town of Sierra Gorda participated.
Read more about our Responsible supply in our Sustainability Report 2023