UBC Theses and Dissertations

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UBC Theses and Dissertations

Developing a local procurement framework for mining companies operating in Mongolian rural communities Bat-Erdene, Zorigtkhuu


There is an increasing pressure for mining industry to guarantee that sustainability considerations are included in business policies. The traditional philanthropic response to economic, social and environmental issues is shifting towards new models that embrace the importance of community engagement on all levels to create value for industry and society. Local procurement, in this regard, has been justified as an effective tool to foster community engagement, thus obtaining social license to operate and create shared value. The research used a case study approach using Erdene Resources Corporation’s Bayan Khundii gold project and asked, “How can mining companies develop their local procurement strategies in Mongolian regions where businesses and services are limited?”. The data is collected through twenty-four semi-structured interviews. The interview participants represent industry representatives, academics, local stakeholders, investors, and consultants with diverse experience and insights into the mining industry. Qualitative interview data was scrutinized using the NVivo 12 data analysis software and collectively reviewed for main themes and patterns. The study findings identified a definition for “local” and challenges, strategies to overcome the obstacles and impacts and benefits related to local procurement initiatives. When defining “local,” any business registered within any administrative division in Mongolia could be considered “local,” provided that employment is created within the local community. The most significant challenge is the lack of awareness of commercial mining projects. The most relevant benefits for local communities and mining companies are creating job opportunities and improving community engagement or maintaining the social license to operate, respectively. In summary, this project defines “local,” addresses the main challenges related to local procurement initiatives, finds potential strategies to overcome the obstacles, and indicates impacts and benefits. These advances shape a local procurement framework for mining companies operating in Mongolian rural communities, eventually helping local businesses grow, develop, and build mining share value.

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Attribution-NonCommercial-NoDerivatives 4.0 International