Third-party relations

Goods and services

In 2010, Codelco had transactions with 2,243 goods suppliers, 1,292 service suppliers and 357 suppliers who provided both services and goods. The contracts accounted for US$ 18.157 billion, amount that includes long-term electricity supply contracts (US$ 12.303 billion) and fuel supply contracts (US$ 1.807 billion).

In 2010, the consumption of goods and services was up 14% from 2009. This rise was primarily due to new projects starting operations, more activity at several existing operations and a price increase in several key goods and services.

 

 

 

Suppliers

Supplier development is a key initiative for Codelco. Through this initiative it aims to ensure a competitive offer of goods and services for the growing requirements of the Company’s current and future activities. At the same time, new technologies, innovative solutions and management capacity are incorporated into its business processes. Some of the main activities in supplier development were as follows:

• Shanghai Expo 2010
  At the international exhibition, Codelco held its traditional annual meeting with almost a hundred Asian companies in addition to an important number of factory visits. The initiative was particularly successful in products, such as refractory bricks, chemicals and balls. The Codelco office in the city of Shanghai had a decisive role in these results.
• 4th International Forum for Mining Suppliers
  The event, organised by Corfo, focused on attracting international companies to participate in the supply market to the mining industry. As in previous events, Codelco presented its goods and services requirements for operations and different structural and division projects.
• Trade Unions
  In 2010, Codelco had regular meetings with the different trade unions in order to address issues of common interest.
• Mining Industry Meetings Codelco participated in several seminars, such as those organised by Aquiles, Sicep, Agrupación del Transporte and Abastemín, an organisation dependent on the Mining Council (Consejo Minero). At these meeting, Supplier Management presented the requirements associated with the Company’s operations and investment activities.
• Development of World-Class Suppliers Programme
  In the framework of a collaboration agreement between Codelco and BHPBilliton in this programme, the Company developed a series of internal and external activities to structure its Cluster Project portfolio. These initiatives aim to develop local market suppliers through collaborative work with Codelco user areas and that are focused on finding creative proposals to address various operational challenges. In 2010, five new development solutions where incorporated into Codelco’s Cluster Project portfolio.

 

Contractor management and supervision

Labour relations within contractor companies that provide services or do work for Codelco are the exclusive responsibility of each company.

Nevertheless, and in order to monitor that contractor companies comply with labour regulations, Codelco exercises its right to information, retention and payment regarding labour and social benefit insurance obligations provided by law.

Furthermore, Codelco undertakes all the necessary measures to effectively protect the life and health of all personnel who work at its operations, whether employees or contractors.

The Company also defines and implements on site programmes to supervise the various contracts entered into by divisions and Head Office to ensure labour and social benefits insurance obligations are complied. In 2010, there was a high level of compliance with all obligations by contractor companies.

As for social responsibility, in 2010 Codelco awarded 2,000 scholarships for excellence to the children of contractors and subcontractors, to help finance their higher education.

Every year, Codelco also promotes social training schemes that benefit, for example, contractors, subcontractors and their families; this scheme is funded with the Sence surplus.