Local content, supply chains, and shared infrastructure

Abstract

Local content policies in the context of extractive industries have attracted increased interest in recent years. Most countries with a significant extractive industry have included local content requirements either in their legislation or exploitation contracts. Such efforts may be constrained by low capacity of potential suppliers, low skills, and a number of other factors constituting the general business environment. A number of extractive industry companies have introduced supplier development programmes that attempt to reduce the constraints and skill gaps. Government policies on local content vary, with some prescribing quantitative targets for local content, while others focus on improving skills and raising the capacity of domestic industry. Infrastructure built for extractive industries can often be used by local populations and other economic activities. Difficulties in finding suitable financing arrangements have, however, limited the number of successful greenfield multi-client/multi-user extractive industry-related infrastructure projects.

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