Supply chain

Overview

The success of our operations depends on the ability of their suppliers to deliver what they need, when they need it, and to our standards.

For our part, we can exert a considerable positive influence by ensuring that suppliers meet stringent requirements, not just the quality of the goods and services they provide, but also their safety and employment practices and their commitment to sustainable development.

Our payments to suppliers constitute a strong benefit to the economy, generating employment and creating wealth in other sectors.

The way we buy

In 2006, we published our commercial business practices policy, The way we buy. This policy reflects how our corporate philosophy meets the operating demands of our business units, while ensuring that we conduct our procurement in a manner that is holistic, transparent and sustainable.

To pre-qualify as a supplier, business partners generally must be able to demonstrate strong organisational commitments to:

• corporate governance 
• improved health and safety 
• human rights and labour practices 
• socio-economic welfare of local/indigenous communities 
• natural resource conservation and management 
• carbon and greenhouse gas emission reduction 
• energy and fuel efficiency 
• waste minimisation

By collaborating with our partners to obtain sustainable development objectives for each our business units, we seek to build the confidence of our partner communities in our reputation, and extend our licence to operate.
 
To learn more about Sustainable Supply, or to register to become one of our suppliers, please visit our Procurement website.

Our results

Across the world we spent US$16.3 billion on goods and services in 2007.  Rio Tinto had about 40,000 suppliers and Alcan had about 22,000, excluding suppliers for the engineered products and packaging divisions, It is anticipated that Rio Tinto and Alcan have some suppliers in common.

In 2006, our demand for materials, facilities and services was equivalent to US$11 billion, or 43 per cent of our Group's sales revenue. Twenty two per cent of these materials, facilities and services were procured locally.

Due to the diversity of our operations, volumes of the materials that we used are not relevant at a Group level.