Sustainability website / Economic contribution / Policy and approach

Xstrata’s operations generate a range of direct and indirect economic benefits to employees, contractors, suppliers, governments, shareholders and communities. Our Sustainable Development Policy includes our commitment to contribute to the social and economic development of sustainable communities associated with our operations. Xstrata’s Sustainable Development Standard 12: Social and Community Engagement sets out the Group requirement that community strategies and social involvement plans focus on enhancing the socio-economic capacity, prosperity and sustainable development of the communities in which we operate in a manner that avoids dependency on the Xstrata site or operation after closure.

Our major socio-economic contributions are through:

• Wages and benefits to employees and contractors
• Royalties and taxes paid to local, regional and national government
• Procurement of goods and services, giving preference to local companies where possible
• Distributions to providers of capital, including returns to shareholders and debt providers
• Training and skills development opportunities for employees and communities
• Support for community educational initiatives and health programmes
• Corporate social involvement programmes to support communities associated with our operations
• Providing employment opportunities, in particular for local people
• Improving or contributing to local infrastructure and services
• Promoting local enterprise development.

As set out in our Sustainable Development Policy, we work to minimise the adverse impacts of our operations on the communities in which we operate and to avoid sole dependence on our operations. We complete social baseline studies and risk assessments to identify and evaluate the risks and impacts of site and project activities on local communities at each stage of the operation’s life cycle and in advance of any major modification to our operations. Potential negative socio-economic impacts on communities and surrounding regions from mining activities include:

• Social impacts from an influx of people into a region, either due to the use of external contractors or due to improved economic prospects from the presence of the operation attracting migration to the region, including increased traffic or reduced access to local services
• Local price inflation impacting land or housing costs, basic goods and services due to higher wages, increased economic activity and/or influx of people
• Higher crime rates or social problems, e.g. substance abuse
• Environmental impacts that affect local economies, e.g. agriculture or livestock breeding
• Cultural marginalisation of the indigenous or local communities and/or loss of cultural heritage or practices
• Health and environmental issues including infectious diseases, emissions, noise and dust
• Resettlement of communities can result in negative impacts on livelihoods, access to resources or social capacity if not managed correctly
• Impacts relating to the closure of the operation, particularly if the community becomes dependent on its presence.

(SD Standard 12: Social and Community Engagement)

¹Data taken from audited financial statements where possible.