We recognise that our operations can be a significant driver for positive socio-economic development on several levels:
- Secure employment and skill development
- The economic value arising through local supply chains, job creation and developing manufacturing capacity
- Community investment, through partnership with local organisations to address local needs and build sustainable local economies
- The economic value added to a country through profit share, royalties and taxes
Fundamental to this success is the establishment of broad socio-economic partnership with our stakeholders, good governance, ethical conduct and transparency
We are committed to open and full disclosure of our economic contributions in all countries in which we do business.
In 2022, Centamin’s direct economic contributions totalled US$848 million, which included: US$398 million in operating costs; US$66 million in employee wages and benefits; US$275 million in capital expenditure; US$62 million in profit share, royalties, taxes and other payments to government; and US$0.60 million in community investments. Of the total economic value distributed, 98% was attributed to Sukari in Egypt, with the remaining 2% to exploration and development activities in Côte d’Ivoire and Burkina Faso.
Under the terms of the Sukari Concession Agreement (Egyptian law 222 of 1994) all profit share payments are made to the Egyptian Mineral Resource Authority (“EMRA”), a department of the Ministry of Petroleum and Mineral Resources. Since 1 July 2020, the profit share mechanism has been made to EMRA on a 50:50 basis and will remain at this level for the remainder of the tenure.
From exploration to mine operation, Centamin procures a diverse range of goods and services that contribute to the economic and social prosperity of our host countries through industrialisation, infrastructure and innovation.
Approximately 97% of our group-level cash operating costs is at Sukari, where the main types of procurement by value are fuel and oil, contractors, general consumables and reagents. Of the approximately 900 active suppliers in 2022, the majority by number (57%) and by value (67%) are located in Egypt, followed by Europe and Australia.
The principal goods and services we source internationally include: reagents (cyanide, flotation reagents); other consumables (forged grinding media and accessories); Original Equipment Manufacturer (“OEM”) plant and spares (power generation, other fixed and mobile equipment); communications hardware and software.
Global supply chains have faced continued disruption in 2022 due to the COVID pandemic and war in Ukraine, which highlight the importance of a diverse and collaborative supply chain to buffer the operation against shocks. To mitigate the potential impact on international supplies, we maintain increased levels of capital inventory for consumables and critical spares to accommodate delays in lead times; and seek long-term agreement with suppliers to provide stock security and priority availability where feasible. Local procurement is also an important mitigating factor.
In sourcing goods and services, preference is given to local businesses, provided they meet the minimum safety, quality, ethical and cost requirements. In 2022, the total number of Egyptian suppliers increased to 604 from 508 suppliers in 2021.
Under the Sukari Concession Agreement, the Company applies rigorous procedures to maximise the opportunity for local sourcing. International procurement is only sought when local suppliers are unable to meet requirements for quality and performance, or the international price is less than 10% of that offered by local suppliers
Centamin’s Code of Conduct affirms our commitment to uphold high moral and ethical principles and specifies the basic norms of behaviour for employees and others conducting business on our behalf.
We expect our suppliers to apply standards to the same level as our own, or higher, in a manner that is appropriate and proportional to the nature and scale of their activities, the goods they supply and the services they perform. We are committed to using only those suppliers that adhere to the same fundamental principles relating to legal compliance, fairness, honesty and anti-corruption.
As a condition of doing business with Centamin, our suppliers are required to comply with applicable laws and meet the commitments and obligations under our Group policy framework, including:
These requirements are stated in our standard terms and conditions of contract for suppliers of goods and services, to which is appended our Supplier Code of Conduct.
We have assurance processes in place to verify that our suppliers meet our standards. We reserve the right to undertake due diligence to verify compliance to our Supplier Code of Conduct. If a reasonable risk of non-compliance is identified, we may suspend transacting business or terminate business relationships with a supplier.
At Sukari, we maintain a Conflicts of Interest Policy that covers avoidance and management of conflicts of interests that may arise between our employees and business activities. Our employees are required to annually review and declare any potential or perceived conflicts; it being their responsibility to act in the best interest of the Company
To obtain and maintain a robust licence to operate during all phases of the mine cycle, we must build relationships based on trust and mutual respect with communities, governments, NGOs and other local, national and global stakeholders.
The strength of these relationships is underpinned by:
- Engagement – proactively engage stakeholders based on inclusion, transparency and integrity
- Risk and impact management – integrate stakeholder considerations into managing risks to develop long-term, positive cumulative impacts
- Mutual value creation – collaborate to catalyse socio economic development so communities can prosper during operations and after mining activities cease.
We engage with communities to identify social, economic and environmental priorities and to define mutually desired outcomes and opportunities as aligned with our purpose.
Through community investment we aim to provide a framework that addresses challenges and catalyses long-term socio-economic development in our host communities. To do so, we must strengthen the institutions that support local economies, and build the skills and capabilities that diversify economic activity. Where possible, we seek to leverage other development resources and sources of funding available through partnership with other bodies.
We start community investment at early-stage exploration, from where the level of investment is scaled-up over time commensurate with the stage of asset development. Overall, we target levels of investment equivalent to 1% of our underlying earnings. The total community investment expenditure in 2022 was US$0.60 million, representing 0.8% of underlying earning, compared to 0.4% in 2021.
We recognise the need to undertake certain investment initiatives on a larger, regional scale, to achieve measurable social change and establish diversified and resilient regional economies. We also appreciate the need to develop and implement these initiatives in collaboration with other regional stakeholders. Under this strategy we will target women to benefit from at least 50% of our investment funding.
At Sukari, a Community Consultation Committee composed of cross-functional leaders, support the governance of our community investment programme to ensure the most effective opportunities are prioritised and implemented. Under the direction of the Committee, investment in 2022 prioritised the following sectors:
- Vocational education and training programmes that enable the community to benefit from economic opportunities associated with the presence of the mine
- Advancement and inclusion of women in economic activities
- Community health infrastructure and services to minimise dependence on the regional centre of Hurgada, four hours to the north of Marsa Alam
To maximise the impact of our community investment, we aim to be consistent with and supportive of other local development initiatives and plans – and leverage other development resources and funding. In 2022, we investigated agricultural livelihood programmes in the Doropo project area for vegetable market gardening and cashew farming. We aim to advance these pilot projects with local development partners in 2023.