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Local Content Policies in the Mining Sector: Scaling up local procurement

This paper focuses on local procurement policies designed to boost the number of goods and services purchased by mining operations from local stakeholders.

It unpacks various objectives that a local procurement policy can help respond to. It also details various types of policy instruments that can be used in the design of local procurement policies and underlines the strengths and weaknesses of each type of measure.

In a large number of resource-rich countries, large investment inflows and revenue generation driven by exports mean that the mining sector is an important driver of growth. But in developing countries, the mining sector generally does not have a good track record when it comes to leveraging its potential for industrial development and economic transformation.

Yet the potential is significant: if harnessed well, mining can unlock industrial activities through more value addition; create business opportunities for the domestic private sector from local procurement, in particular close to mine sites; generate indirect jobs along the supply chain; and provide wider opportunities for the economy, notably through the use of infrastructure and mining-related capabilities for other economic sectors.