Where, then, do the other components of this economic contribution go? For the last three years Rio Tinto has been looking at this closely, asking the operations directly through a bottom-up annual survey, in the context of its Community and Socio-Economic Review. From this, it emerges that the largest proportion of labour payments are made to people at the local level of the operations, and virtually all within the national boundaries of the mines.

Although federal governments collect most of the taxes and royalty payments, local and regional governments still receive around one third of the total take. Our survey can only capture where the tax payments are made, and not the internal redistribution of revenues that takes place within governments, depending on degrees of decentralization or fiscal organization. For this reason, the ultimate effect of these tax payments at the local level is likely to have been well underestimated here.

Understanding the geographical "footprint" of a company's suppliers is not easy. To start with, tracking down every single purchase by the Group is virtually impossible, as many suppliers are themselves purchasers of materials and goods from elsewhere; this study uses the mailbox addresses on the vendor's invoices as proxy. Sixty per cent of Rio Tinto's supplies appear to come from within the region of operation, and more than 20 per cent from the local level itself, with very little being imported from abroad.

Looking more closely, however, as Rio Tinto's investments are heavily biased towards developed countries (Australia, North America and Europe account for over 75 per cent of total), we might take it that the geographical pattern of purchases is reflecting sophisticated supply chains in advanced economies rather than one typical of the sector - but, as we shall see, this may not always be the case.

[Image] Direct community contributions by Rio Tinto in 2003 :: Total 2003: US$70m - Total 2002: US$50m / Overall economic impact and its geographical pattern 2003
[Text] ...the greatest direct contribution to advancing local economic development is through maximising the overall economic impact from mining.
[Image] RPM - contributations to the economy.