Supply chain

Supply chain

Forging strong links

In our connected world of widespread trade, materials pass through many hands before reaching the end consumer. Managing the impacts of products across their whole life cycles therefore demands that companies work together with their suppliers. A collaborative approach also provides opportunities for innovation, co-operation and economic development.

 

Cape Lambert Port, Pilbara Cape Lambert Port, Pilbara


Peace of mind for our customers

Our customers want to know that our materials have been produced in responsible ways. They seek greater transparency about the minerals and metals we supply, which makes responsible supply chain practices critical to our licence to operate.

A challenge we face is implementing effective control and assurance systems across our global supply chain. One way to achieve this is by seeking suppliers whose values are consistent with ours. This not only helps reduce our footprint, but also provides a solid basis for enhancing the positive impact of our partnership.

In short, our ambition is to migrate from a model of responsible supply chain by default, to a responsible supply chain by design.

Responsible sourcing is about achieving balance

We source from around the world to access the best value, while balancing our responsibility to participate actively in our communities, and act in an environmentally friendly and socially responsible way.

In 2016, we launched our Supplier code of conduct, which we issue to all our suppliers. It outlines what we expect of them – and of their subsidiaries and sub-contractors too – in terms of human rights, labour rights, safety and the environment. We also introduced our Know your supplier procedure, which sets out a process to understand the potential legal, ethical and reputational risks arising from using a supplier.

We are active in chain-of-custody programmes that provide consumers with the assurance that their minerals such as diamonds and gold have been responsibly produced. For instance, we are a founding member of the Responsible Jewellery Council, which is the industry organisation committed to promoting responsible practices throughout the jewellery industry from mine to retail. And we’re a co-founder of the Aluminium Stewardship Initiative, through which a broad range of stakeholders are developing the world’s first Responsible Aluminium Standard. The standard will be used to assess aluminium suppliers’ ethical, environmental and social performance at every stage, from bauxite mining, through primary aluminium production and distribution, to remelting and recycling.

Developing new supply chains

Where possible we buy locally and provide small enterprises with technical support to build local communities’ procurement opportunities. We share tools and knowledge with local suppliers to increase supply chain reliability and encourage good social and environmental practices.

Because we operate in some remote areas, our supply chains are typically non-traditional – often we have to design them from scratch.

That was the situation at our Oyu Tolgoi copper mine in Mongolia. We responded by creating a business development programme to enhance the commercial skills of local companies. Our aim is to make them more sustainable, while also ensuring they’re able to meet the mine’s needs. The cooperation agreement between Rio Tinto and local communities is the first of its kind for Mongolia.

Making our supply chains more sustainable

By the end of its third year, the Mongolian business development programme had delivered tangible results and had already helped to improve the safety, reliability and sustainability of Oyu Tolgoi’s supply chain. Many suppliers have extended their client base beyond Oyu Tolgoi and developed more sustainable business models.

We have more to do but we are increasingly achieving a sustainable value chain by supporting economic growth, working with our suppliers and customers and managing the impacts of our products across their life cycles.