Through employing and procuring products and services from host community members, a gold mine can have a significant impact. Benefits are realized through skills development and lowered poverty levels. Effective local content strategies that are focused on hiring and sourcing locally provide resource-rich countries and regions a tremendous opportunity to achieve sustained growth and economic diversification. These policies also help build positive, long-term relationships and can provide business benefits through cost reductions and efficiency improvements. On the other hand, negative impacts can include rising local prices and growing income gaps between mine workers and nonmining populations. The right to an adequate standard of living is a salient human rights risk associated with our business activities.
Our commitment to provide local economic development opportunities is stated in our Sustainability and Stakeholder Engagement Policy. Guiding our approach is our Local Procurement and Employment Standard, which sets the minimum requirements to proactively plan, manage and monitor our performance throughout the mine lifecycle to ensure our operations create direct and indirect jobs and business opportunities.
We categorize businesses, contractors and employees based on attributes that designate them as either “local-local” (associated with the direct site impacted area); “local” (local to the area or region); or “national” (associated with the host country).
Using data from baseline studies and in consultation with stakeholders, all sites are required to develop plans that promote local employability and skills development; diversity of workforce; small business development for locals; and sustainable business opportunities. These plans define and prioritize objectives and are reviewed annually on their effectiveness and opportunities for improvement.
To align expectations and commitments, as well as community investment strategies, sites are required to regularly engage with local stakeholders regarding available job and procurement opportunities and the recruiting and procurement procedures we follow.
All suppliers – ranging from local specialized craftsmen to multinational conglomerates – must agree to meet our quality, terms, delivery, service and competitive pricing requirements, as well as conduct business in an ethical, environmentally sensitive and socially acceptable manner and undergo screening. In regions where there may not be enough qualified local suppliers, we work with governments and NGOs – as well as our current suppliers – to support and implement programs that help local businesses improve their capacity to be considered as suppliers to our projects and operations.
In consultation with host communities, we establish local employment and procurement targets and, where needed, offer training programs to develop the skills needed for employment at the mine and as suppliers to the mine.
Local Employment and Skills Development
Aligning local and indigenous employment with our broader global inclusion and diversity strategy was a significant area of focus for us in 2015.
(as a percentage of total employees)
In 2015, we formalized our process and gathered baseline data based on our performance during the year to inform the targets we set for 2016.
|Region||Sites||2015 Local employment performance|
|At the end of 2015, local community members represented 42 percent and 46 percent of the total workforce (inclusive of contractors) at Ahafo and Akyem, respectively. The longer-term employment commitment at our Akyem operation is 50 percent within 10 years of commencing operations.|
|Asia Pacific (APAC)||
|Employment targets are part of our Aboriginal Employment Strategy in Australia. At the end of 2015, aboriginal employment at Boddington, KCGM and Tanami totaled 74, 28 and 89 individuals, respectively. Overall aboriginal employment across the business increased 4 percent compared to 2014.|
|Batu Hijau||At our Batu Hijau operation in Indonesia, employment was 42 percent local-local, 29 percent local and 29 percent from other parts of the country in 2015.|
|North America||All sites||We strive to track Native American employment, but this is difficult, as U.S. law does not require employees to disclose ethnicity. In 2015, we attended community meetings to promote employment opportunities and held meetings on how to apply for jobs at our Long Canyon project. We also promoted available jobs with the Native American Bands in our area of operation.|
|South America||Yanacocha||Residents from Cajamarca represented 62 percent of Yanacocha's workforce in 2015, up from 61 percent in 2014. About 94 percent of our managerial employees are Peruvian nationals.|
Activities in 2015 to fulfill our local employment goals and commitments include:
- In Ghana, our apprenticeship program offers skilled mechanical and electrical specialist training. Graduates of the program are offered employment in a variety of roles including process operators, specialized trades and maintenance. Out of a total of 520 graduates since the program began in 2005, Newmont currently employs 500.
- At the Akyem operation in Ghana, we introduced a learnership program to create opportunities for local community members to gain experience in mine processing and operations. In 2015, 20 local community members enrolled in the six-month program.
- At our Tanami operation in Australia, the Yapa crew conducts various work – including flora and fauna control management, housekeeping and village maintenance. The crew comprises local Warlpiri people who work on a permanent-casual basis, which gives them the flexibility to participate in the workforce and also be available for cultural commitments.
- Both Boddington and Tanami have programs to engage indigenous job seekers and increase employment. Tanami’s Indigenous Training and Familiarization Program (ITFP) trains participants over three months, and those who successfully complete the program are offered a full-time position. Participants in Boddington’s 12-week Gnaala Work Ready program combine certification training with practical work experience at the mine. Upon completion of the program, participants may apply for full-time traineeship in our mining or processing operations. Both of these programs continued throughout 2015 with successful employment outcomes.
- In Indonesia, we signed an agreement with the local government to develop a training program that prepares local community members for working at the Batu Hijau operation when positions become available.
- For the second year in a row, Yanacocha’s internship program continued to build an entry-level talent pipeline for professional roles. At the end of 2015, 93 percent of the interns were Cajamarquinos.
- At our Merian project in Suriname, we follow a local recruitment process that ensures those from within Pamaka communities and/or of Pamaka ancestry receive preferential consideration for the range of skilled, semi-skilled and unskilled positions. The process primarily focuses on local hiring for the longer-term positions that are expected to transition to the operations stage. By the end of 2015, Merian’s workforce reached more than 2,600 as construction on the project reached peak activity. Of the total operations workforce (non-construction) of approximately 730, more than 200 employees are of Pamakan ancestry, of which 38 percent are women. More than 660 employees are Surinamese nationals.
On average, we pay employees classified as hourly and non-exempt (in the U.S.) wages that are significantly higher than the minimum wage in their respective countries, particularly at our operations located in rural and developing economies.
|Country||Female Average Salary||Male Average Salary||MW Value/Year (US$)||Ratio of Average Newmont Salaries for Females to Local Minimum Wage||Ratio of Average Newmont Salaries for Males to Local Minimum Wage|
Local Procurement and Capacity Building
In 2015, we further strengthened our approach and commitment to local procurement. Through ongoing engagement with stakeholders, we gathered baseline data based on our performance during the year to inform the targets we set for 2016.
Globally, we set a total local spend goal of $500 million, which we exceeded by around $68 million.
|Region||Local procurement spend||Local spend
as % of total spend
as % of total spend
|(in millions US$)|
|Asia Pacific (APAC)||$140.8||12%||$765.3||15%|
|* “Local” includes spends categorized as both “local” and “local-local.” For reporting on local procurement spend, our “Significant Locations of Operation” are different than those defined in the report scope, and instead reflect the regional structure and management of our supply chain organization.|
Among the numerous local supplier capacity building initiatives we engaged in at our sites during 2015:
- Our Ahafo operation held a workshop for around 130 local-local businesses aimed at helping them operate a safe, ethical and responsible business.
- During the year, our Batu Hijau operation refreshed its local business initiative to bring a greater focus on developing local businesses that provide specialized services for the mine.
- Our Yanacocha operation in Peru helped finance two educational courses aimed at building the capacity of local entrepreneurs. In addition, Yanacocha is working to improve the transparency of its contracting process by publishing details such as the suppliers involved in the bidding process and the results of the bidding process.
- At our Merian project in Suriname, we conducted a training workshop for site personnel on local procurement, capacity building and community relations as we prepare for commercial production in late 2016.
Our external local employment and procurement targets for the following year are determined at the end of the year within our business planning process to ensure opportunities align to the needs of the business. Our global external targets for 2016 are as follows:
|Region||Site||2016 Local employment target|
|Africa||Ahafo||24 percent local-local workforce (including contractors)|
|Akyem||35 percent local-local workforce (including contractors)|
|Boddington||Increase aboriginal workforce by 8 individuals (including contractors)|
|KCGM||Increase aboriginal workforce by 3 percent|
|Tanami||Increase aboriginal workforce by 10 individuals (including contractors)|
|Batu Hijau||45 percent local-local|
|North America||All||No local employment target has been set for North America as the workforce is largely from the local area. We will continue to promote employment opportunities to Native American communities while also evaluating methods to more accurately track Native American employment.|
|South America||Yanacocha||62 percent local employees|
|Region||Site||2016 Local procurement target|
|$16 million – the decline in the local procurement target compared to 2015 actuals reflects an expected reduction in the aggregate spend for 2016.|
|$72 million – the decline in the local procurement target compared to 2015 actuals reflects the in-sourcing initiative underway at Boddington, which is expected to result in significantly less spend on local contractors, but an increase in local employment.|
|Batu Hijau||$36 million – the target assumes normalization of operations and continued ability to export.|
|North America||All||$220 million – local procurement for the Cripple Creek & Victor mine is not included in the 2016 target as work to fully integrate CC&V into Newmont processes continues into 2016.|
|South America||Yanacocha||$85 million – the decline in the local procurement target compared to 2015 actuals reflects an expected reduction in the aggregate spend for 2016.|
We will continue to build upon our local content programs by working closely with local community leaders, NGOs and local chambers of commerce to help develop capabilities of local suppliers and identify opportunities to increase local procurement.
With the Merian project in Suriname expected to reach commercial production in late 2016, we will be focusing on establishing employment policies and processes to maximize local employment and national candidates at all levels and giving preference to the most impacted demographic (Pamakan). Areas of focus include:
- A formal training program tailored to needs of the business and the capabilities of the local workforce with a focus on developing local employees into skilled roles;
- The establishment of formal targets and benchmarks for local employment and procurement shortly after entering the commercial production phase.