The ASI has welcomed the new procurement program announced by Rio Tinto on 11 May aimed at making it easier for local businesses to compete for contracts with the resource giant in Western Australia.

The new program is said to include a dedicated team to better link the company’s procurement opportunities and spending with WA suppliers as well as a series of local procurement workshops in the Pilbara and Perth and a web portal to enable WA businesses to lodge their interest in future work.

ASI National Manager – Industry Development and Government Relations, Ian Cairns said with the design of the program looking to cover off building better intelligence on local industry capability as well as guidance for the local supply chain on bidding for work, that it would facilitate closer local working relationships.

“The Institute supports the spirit of this initiative and stands ready to work with Rio Tinto’s new team as required to help reach out to the local industrial sector as steel-intensive new project opportunities emerge,” he said.

“We hope that will provide better traction for value-adding steel businesses in the State besides merely services that would normally have to be sourced locally like cleaning and earthmoving.”

Mr Cairns said that Rio Tinto’s new program clearly recognised the flow-on social and economic benefits of engaging meaningfully with local supply chains.

“Purchasing locally provides significant savings for a project’s whole-of-life costing, like lower inventory to manage, reduced lead times and improved after-sales support,” he said.

“Continuity of work within the local industry helps ensure that the existing high skills base is available for ongoing maintenance and onsite inspection costs can be significantly reduced where the personnel involved are resident in the region.

“And locally fabricated steelwork can take advantage of road, rail or local sea transportation, maximising flexibility and economy in meeting delivery schedules and ensuring that project schedules are met, particularly important for resource projects commonly undertaken at remote locations.

“Well done Rio Tinto. We would encourage others in the mining sector to show similar commitment to Australian companies and follow Rio’s example.”