Purposing the Mining LPRM to Develop Supporting Industries in Pursuing NCA
Porter identifies “related and supporting industries” as a factor to investment-driven NCA; Behre Dolbear groups “connectedness of local supply networks to global value chains,” within a counties “economic system” and a most important factor in attracting mining FDI.
Brazil has a “relatively developed industrial base, with a number of well-established firms” which have the “capacity to procure a relatively large number of goods and services to the mining sector.” Recently a study showed that “in the region of Southeast Para, Vale procured 75% of its inputs from Brazilian sources” which is “22% from the region, 48% from providers outside the region but from Brazil and 4% from the State.” This is very “significant compared to other developing economies.”
The LPRM “offers a value proposition for companies looking to inform local government investment in programs that support capacity-building for suppliers.”30 Currently in Brazil, there is “no monitoring mechanism in place” to “objectively assess to what extent certain policies have worked.”
In Australia, “State Agreements, developed for particular large extractive projects, between the State Government and the "developer". State Agreements set out the rights and obligations of both parties throughout the life of a significant development project. These may include, among others, “obligations for the miner to include a requirement to submit detailed development proposals including how they intend to source goods and services from local suppliers and employ local workforce.”
Geipel J, Nickerson E, Kietly J, Regenstrief T, 2017, Mining Local Procurement Reporting Mechanism, German Federal Ministry for Economic Cooperation and Development & Engineers Without Borders Canada.
Korinek J, 2014, Local Content Policies in Minerals-exporting countries, Case Studies, Working Party of the Trade Committee, TAD/TC/WP(2016)3/PART2/FINAL.
Porter M, The Competitive Advantage of Nations, Harvard Business Review, March-April 1990, pp. 74-91.
Behre Dolbear, 2014, Ranking of Countries for Mining Investment: Where Not to Invest.