Our presence brings many benefits for communities, such as employment, opportunities for local suppliers and investment in local infrastructure. At the same time, our operations can cause problems such as increased noise, dust and traffic, so it is essential that we work closely with local people to minimise disruption and ensure they benefit from our business.
In many places, the local community only exists because of our operations. Our social investment is therefore not simply philanthropy – our business depends on the development of communities where our employees and their families can thrive. We have a long history of close involvement with local communities and, while this relationship will evolve, we will probably retain a stronger social commitment than many other major resource companies.
In Kazakhstan, engagement about operational activities that may affect a community generally takes place through the local authority. However, we increasingly consult directly with local communities. For example, in 2009 we met local families at Bozshakol and agreed to provide access to a graveyard found within the project boundary. Should the project expand, we will relocate the graves to a safe location in close consultation with both the community and authorities.
Committed to responsibility
Fostering enterprise development
Our Copper Division has invested over $7 million in Kazakhstan’s first tyre-recycling facility, bringing operational, economic, employment and environmental benefits.
Tyres for mining vehicles such as dump trucks and loaders are costly and in short supply in Kazakhstan. To overcome these problems, our Zhezkazgan operations will send their used tyres to the new MysShina plant for the worn-out tread to be renewed, and we will buy back the re-treaded tyres for 40% less than the cost of a new tyre. Because the plant is close to our mines, this approach will also reduce transport costs. As the lack of recycling facilities meant used tyres were previously sent to landfill, re-treading the tyres also reduces our environmental impact.
The plant has created 100 new jobs for local people, many of whom were unemployed. Each year it will re-tread about 2,000 tyres, using technology developed by German company Schelkmann, which supplied the equipment and trained our employees. The new recruits received around six weeks of classroom training before passing an exam. Initial trials confirm that our investment will provide a significant return.
Economic impacts
Kazakhmys is one of the largest employers and taxpayers in Kazakhstan, and our Kazakh revenue represents 2.5% of the country’s gross domestic product. The vast majority of our 61,629 people are Kazakhstan citizens, whose income taxes and spending also contribute to the national economy.
We are committed to helping further develop the Kazakh economy and in 2009, along with the Government, founded Made in KZ, a programme to support small and medium-sized companies in the country. We are dedicated to purchasing products, equipment and services from these companies wherever they are available at the right quality and price.
In September 2009, we held a conference for local companies in Karaganda, and invited them to tender for contracts to supply Kazakhmys. We also announced plans to finance projects aiming to increase local companies’ capacity to supply us. Following the conference, 122 companies expressed an interest. We are already working with 67 of these and have signed contracts totalling $134 million for products ranging from construction materials to tools and uniforms. In October, we took part in a similar, Government-run conference in Pavlodar, and renewed contracts with nine suppliers in the region as a result.
Our Copper Division has established a dedicated working group for local enterprise development. In December 2009, we also established a local procurement working group comprising procurement specialists from all areas of the Copper Division. The working group visited suppliers in Karaganda, Pavlodar and East Kazakhstan to assess their products and production processes and raise awareness of our commitment to local purchasing. The Copper and Power Divisions spent $867 million on goods and services from Kazakhstan suppliers in 2009 – around 44% of total spending on goods and services.
The Copper Division has centralised purchasing to ensure greater quality control. In 2010, we will introduce standard, higher-quality personal protective equipment across all copper facilities. This will be produced for us by a local contractor, using materials we purchase overseas.
Committed to responsibility
Respecting cultural heritage
There are several important archeological sites located within the boundary of our Bozshakol copper project in northern Kazakhstan, which we are taking great care to protect. In 2009, we selected expert archaeologists to carry out detailed surveys, document the artefacts found, establish whether they could be safely removed, and carry out the excavations. The Margulan Archaeology and Ethnography Institute in Almaty supervised all work.
Detailed surveys confirmed the presence of 25 separate archeological sites, 15 of which were previously undiscovered. These span a timeframe from 350,000 years ago through to the late medieval period, providing a comprehensive picture of cultural development in north-eastern Kazakhstan. There are six Stone Age sites, a Bronze Age settlement, five Iron Age burial mounds, medieval burial sites, primitive mines and ceremonial monuments.
The sites, along with artefacts found there such as knives, tools, copper ore and bronze bullion, prove that ancient peoples in the area were highly developed in their use of metals and other materials. These artefacts have been carefully excavated, and we plan to open a museum at the site to house them.
Community and infrastructure development
Our Copper Division invests heavily in the construction and maintenance of social facilities such as schools and hospitals, and the development of roads and infrastructure near our operations. We concentrate our efforts on projects closely related to our operations, ensuring our investment benefits the business as well as communities and strengthens our ties with local people.
In 2009, the copper business invested just under $88 million in education, healthcare, sports and culture, infrastructure and the environment, and sponsorship and charitable donations. This includes capital expenditure and ongoing support for facilities, and is by far the largest programme of its kind in Kazakhstan.
