Facilitating Linkages Between Extractive Companies and Local Businesses

At a Glance
  • To boost local procurement, it is important to address key information gaps. For example, local businesses may lack detailed knowledge of tenders and upcoming opportunities, even as extractive companies may not know the capacity of local businesses.

  • Supplier portals offer an effective means of connecting buyers and sellers.

  • A careful analysis of companies’ qualification processes and requirements can help address barriers and identify ways to incentivize local purchasing.

Case Studies

Key Resources

Topic Briefing

Facilitating connections between buyers and sellers is often the first step toward unlocking local supply opportunities. To do this, it is necessary to address information gaps that exist between local businesses and (often multinational) extractive companies. For example, local suppliers may lack knowledge of tenders and upcoming opportunities at the same time that extractive companies lack knowledge of existing local businesses.  

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Supplier portals, most often online, help connect buyers to sellers. Examples include the ICN Gateway in Australia, ProjectConnect in Western Australia, and the Africa Partner Pool in Ghana. In addition, events such as trade shows and industry conferences can provide opportunities for local businesses and extractive companies to connect.

Extractive companies’ qualification processes sometimes impose requirements that are beyond the capability of local suppliers. A careful analysis of such requirements can help to address these barriers, as well as to identify ways to incentivize local purchasing. For example, in Chile supplier prequalification requirements and certification support were harmonized across the 11 mining companies in the Atacama mining cluster and the Atacama Region Development Corporation in an effort to reduce the cost of doing business for both buyers and suppliers.[1] These methods are discussed further in subsequent subtopics.

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[1] International Petroleum Industry Environmental Conservation Association (IPIECA), Local Content: Case Studies (London: IPIECA, 2016), 10.