Case Study 03 (Portuguese):
Case Study 03: Supporting Community Sustainability at Paracatu

THE ISSUE: Local communities benefit from mining through increased employment, direct and indirect business opportunities, and taxes generated by the mining operation. Mine employees and their families become an integral part of the community, participating in civic groups and community events. How can mining companies engage with existing government and civic institutions in a way that supports those institutions and contributes to community sustainability?

THE KINROSS WAY

Kinross’ commitment to being a good neighbour is embedded in our Ten Guiding Principles for Corporate Responsibility and realized through our SRPs. Through engaged co-operation, we not only seek to identify and address community concerns about mining impacts, but also strive to enhance the positive long-term economic and social benefits of our presence through thoughtful and strategic community partnerships.

Our Paracatu mine in Brazil offers one example of the ways in which we execute our commitment. Paracatu is a large-scale, open pit operation located adjacent to the city of Paracatu in the state of Minas Gerais. Gold mining has been associated with the Paracatu area since 1722, when placer gold was discovered in the creeks and rivers of the region. Modern mining operations have been ongoing since 1987. Kinross took a 49% ownership position in Paracatu in 2003 and has been the 100% owner and operator since 2004. In 2006, Kinross began an expansion of the mine and its processing facilities, extending their life to 2041.

The mine brings significant benefits to the city of Paracatu. In 2011, the mine had a workforce of about 4,000 employees and contractors, approximately 86% of whom were born or lived in Paracatu. The mine uses the services of approximately 560 local suppliers, and generates approximately $70 million in direct local procurement on an annual basis. The City of Paracatu also receives significant revenues for public financing, both from local rural and property taxes, and from the Financial Compensation for Mineral Exploration royalty payment, approximately 65% of which is returned to Paracatu for use by the municipality. In 2011, total payments to government at the local level amounted to about $9.9 million.

Some of the initiatives that Kinross’ Paracatu team have taken over the years to enhance the benefits to Paracatu include our local supplier pre-qualification program, the annual Partnership Seminar process for selection of community projects for support by the mine, and several education and vocational training programs in partnership with the local schools and universities of Paracatu.

Our Paracatu team was also an active participant in the development of Paracatu’s Sustainability Development Plan 2030, a community-driven initiative by ADESP, the sustainable development agency of Paracatu. The process began in 2009 and involved several rounds of workshops, community discussions, and studies, all designed to form consensus around the key areas of focus for the community in planning for its long-term sustainability. The government, non-governmental organizations, other businesses, and citizens all participated in the process. The result is a planning document that outlines key objectives for the economic, environmental, social, and institutional sustainability of the city.

We have aligned our new social investment strategy with the Paracatu 2030 initiative by focusing our community investments in the four action areas of Paracatu 2030: youth education; training and income generation; environmental education; and culture and heritage. Our strategy establishes indicators for measurable and transparent results and, wherever possible, we promote partnerships and alliances with the business and academic communities as well as other local stakeholders. By working with a broad spectrum of Paracatu society in the identification, management and accountability of projects, Kinross seeks to establish itself as one of several voluntary collaborators in value-creating contributions to social, environmental and cultural projects of public interest and mutual benefit.

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