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Local Economic Impacts //

Why It Matters

Operating in local communities, the mining industry has an opportunity – and a responsibility – to support local economic development.

Management Approach

We are committed to providing economic value in the form of local job creation, business for suppliers, taxes and royalties that support public finances and essential services, and other contributions. We also work to create opportunities for local economic growth and capacity-building through our Community Investment Program.

Local Procurement

We rely on a comprehensive network of contractors and suppliers to service our operations, as well as exploration and development sites. We use best efforts to buy goods and services from nearby sources whenever possible, not only for competitive pricing but to ensure local communities benefit from our economic activity. In Mexico, much of our supplies and equipment can be acquired locally or nationally, and we only turn to international suppliers to obtain certain heavy equipment and mineral processing chemicals.

Our Supply Chain
The largest categories of suppliers or partners are:

  • Underground mine development
  • Security
  • Metals sales
  • Transportation and trucking
  • Fuel supply
  • Equipment and parts
  • Food services
  • Telecommunications
  • Consultants

All purchase decisions must be made in compliance with our policy on Contracting Goods and Services and Working with Third Parties, which includes criteria such as location, availability and quality of product, service quality and experience, and cost, and specifies that priority will be given to local suppliers who fulfill these requirements. We expect suppliers to follow Endeavour’s safety and health, environmental and labour standards, and we are working more closely with our supply chain to ensure these policies are adhered to and become the norm.

Supporting Local Miners

At Guanaceví and El Compas, we support and engage with local artisanal miners, who mine their concessions on a small scale or hand-sort material from surface dumps and unload small truckloads of ore at our plant for testing and purchase. Per the terms of our operating permits, each year we accept mill feed from small-scale local miners. Our plant managers supervise the delivery, weighing and sampling of the material, and arrange for payment.

2018 Performance

  • Generated total economic value of $150.5 million, same as the previous year, and distributed $142.6 million to stakeholders, up from $140.4 million in 2017. The increase is due mostly to the work involved in bringing Guanaceví into profitability (e.g., developing new mining areas) as well as incorporating El Compas into our operating expenses, even though the mine is not yet producing at full capacity.
  • Spent $181.1 million to procure goods and services. We have expanded our classification of what we cover in this spending to include contractors working at our sites (e.g., for mine development) and those performing consulting services like lab tests and environmental studies. Roughly 97% of our total procurement came from national or local suppliers within Mexico, comparable to prior years.
  • Supported 11 officially-recognized artisanal miners in Guanaceví, who contributed 6% of the total material processed in 2018, a year-over-year increase to 18,663 tonnes in 2018 from 14,649 tonnes in 2017.
  • Contributed 32,514,473 MXP (US$1,692,410) to the Mining Fund in Mexico. The federal government created the fund in 2014 to collect a special tax from operating mines in the country, with the purpose of using the money to improve the quality of life in areas impacted by mining extraction and support local communities through social infrastructure projects. Endeavour, along with other mining companies in Mexico, pays this tax.

In Guanaceví, for instance, money from the Mining Fund has helped pave roads within and outside the town, expand school facilities and bring electricity to rural districts. In Guanajuato, Endeavour participates as a member of the governance committee to ensure these funds are allocated to projects that truly respond to the most urgent needs of the communities.

Economic Impact

1 We use the Global Reporting Initiative definition of economic value.
2 Payments to governments: as a Canadian company, we are compliant with the Extractive Sector Transparency Measures Act, which requires Canadian companies to disclose any payments to governments.

2019 Priorities

  • Identify the key elements and actions to establish an integrated supply management system

Luis Castro