Local Procurement

To ensure that local communities benefit from our presence, we are committed to sourcing goods and services from local and national Eritrean suppliers wherever possible and practical. This is constrained, in some cases, by lack of availability, and at times, non-competitive pricing.

These factors notwithstanding, the emphasis on local procurement and the requirement to tender contracts in Eritrea first (before seeking international suppliers) is a Nevsun protocol that is reinforced by the BMSC Social Responsibility Policy.

During 2016, we spent a total of $175 million on fuel, heavy mobile equipment, construction materials, transportation and shipping, and other operating materials, goods and services from local and international vendors (compared with $283 million in 2015). Of these expenditures, approximately $78 million, or 45%, was provided to local vendors (2015 – $95 million, or 34%). The spending decreases are generally due to a lower average per-litre fuel cost realized in 2016. Local vendors include all government and private businesses that provide supplies and services to the Bisha Mine. Certain suppliers such as the Eritrean Petroleum Corporation only receive an administrative fee for facilitating external fuel delivery.

ERITREAN SUPPLY LINES Total 2016 2015 2014 2013 2012 2011
Payments to local payroll, parastatal entities and local suppliers $472,553 $78,150 $95,490 $112,224 $63,226 $61,143 $62,320
Non-Eritrean supply of goods and services $863,071 $97,259 $187,106 $161,095 $135,047 $156,496 $126,166
Total operating and administration $1,335,722 $175,409 $282,596 $273,319 $198,273 $217,639 $188,486
Percentage of Local Procurement 35% 45% 34% 41% 32% 28% 33%