China Minmetals Corporation: creating a sound development environment through a systematic involvement in community development

Company profile
China Minmetals Corporation, founded in 1950, is a large multinational metals and mining group. This 60-year-old group is primarily engaged in exploration, mining, smelting, processing and trading for metals and minerals, and is also engaged in finance, real estate, and mining and metallurgic technology, with its business scope covering 34 countries and regions in the world. In 2007, China Minmetals and Jiangxi Copper Corporation jointly acquired 100% stake of Canadian Northern Peru Copper Company (NPC). The El GALENO copper-gold project in the northern part of Peru belongs to LUMINA Copper Company, a subsidiary of NPC.
Challenge
An enterprise should establish a good partnership with the community, actively integrate itself into the local community, and participate in the construction of community. This is what an enterprise, especially a multinational enterprise, must do when it has roots in the host country. LUMINA’s project lies in the northern part of Peru, about 600 km from the capital Lima. As the project location is featured with high poverty and lower HDI, the company is faced with a major challenge on how to promote the development of local community, how to create a favorable community environment for the normal operation and development of the project, and how to achieve the harmony and win-win outcome with the local community.
Solution
LUMINA viewed sustainable and common development as its goal and continues communicating with the community. It has set up a special organization and made a systematic plan for community development to gradually promote the development of the community in the project location.
Establishing a robust management organization for community relations
LUMINA has given priority to community work in the process of project development, and set up a special community working group headed by the vice president of the company. The working group set up a department of community relations. Under the leadership of the working group, the company has set up an office in the community which is directly affected by the project, to deal with the work related to the company and community. The company has also assigned a liaison for each community office to pay regular visit to the community. Such a robust management organization has provided the company with a strong support for the development of community work.
Establishing a sound communication mechanism
Relying on robust community management organization, LUMINA has established a sound community communication mechanism to understand and respond to the expectations and demands of the community, normalize the communication with the residents in the community, and build up a community relations featuring with equality and mutual trust. Its communication mechanism included weekly visit, monthly meeting for coordinating community relations, irregular community meeting, and community complaint system.
Identify the key elements of community engagement and development
LIMINA fully respected the local customs and habits. It identified the key elements of community engagement and development. In connection with its actual operation, the company has conducted field investigation and dialogues to identify the clauses that had the closest relations with its business and played an irreplaceable role in the development of community, and regarded them as the key elements of community engagement and development.
Signing up and implementing community agreement
From the perspective of sustainable development and for the purpose of harmonious development with the local communities, LUMINA has signed up community agreements with Encañada and Sorochuco communities, both of which have suffered the biggest impact of the project. The agreement covered such issues as the environment, agriculture, community business, education, community services, health care, land, labor and the like, aiming to help communities achieve sustainable development on the premise that the company fulfilled its social responsibility within the scope of the project and ensured smooth implementation of its project.
Achievements
Through good top-level design in community engagement and development, LUMINA has formed a network for community work with the local governments, community residents, and various mining companies, and laid a solid foundation for the development of GALENO project. In the meanwhile, the company has basically built an image of a responsible international mining company.
Economic returns
Good community relations and stable investment environment are the best guarantee to economic returns. Since it started business, LUMINA has never encountered incident of violence against EL GALENO mining project. In contrast, other projects around it have suffered the loss of billions of dollars each year because of violent demonstrations and blocking roads.
Environmental effects
In 2013, LUMINA started land reclamation in the drilling platform area, restoring an area of 22,064 square meters and planting 1,200 trees. The environmental inspector, the local community representative, made regular check over the water quality in the surrounding areas and found no excessive pollution incidents. The company has effectively protected the local environment and ensured the normal life of local residents. Up to now, LUMINA has never got punished by the local Ministry of Environment for environmental pollution.
Social Benefits
In 2013, LUMINA fulfilled the community agreement, giving great support in the construction of education, health, infrastructure and other community work, and completing nearly 93% of tasks in the agreement. The company has boosted the local economic development. In this respect, the company established business relations with 64 local enterprises and provided guidance and training for small community businesses, by which 80% of them doubled their income. By the end of 2012, the total annual income of small community businesses increased from USD 2.8 million in 2008 to USD 9.545 million. In terms of job creation, the company created 60 jobs for residents in the surrounding communities, and provided them with the corresponding social security and skill training. In the development of education, LUMINA Company has proactively participated in the construction, maintenance and repair of local school buildings and playgrounds, and helped schools improve their teaching environment and quality. In 2013, the company invested USD 210676.51 in community education. In terms of medical care, the company employed two doctors for the clinic at the project site, which has facilitated medical treatment of local residents, and greatly improved the level of local health. Only from January to April 2014, the doctors visited the local communities 86 times. In 2013, LUMINA Company held free medical consultation in six villages, and helped 3,100 patients. As for the development of infrastructures, the company made investigation and provided technical and financial support to build power lines. In 2013, the company invested USD 75951.52 in the communication services, which has benefited 6,605 people.
Prospect
LUMINA Company’s practice in the northern part of Peru miniatures what China Minmetals does in its fulfillment of social responsibility. In the meanwhile, it has made a useful attempt for Chinese enterprises to explore the model of developing overseas mineral resource.