The mission of the Procurement Department is to fulfill the requirements for goods and services of the productive processes, projects and investments of Codelco.

This involves developing purchasing and contract procedures, as well as establishing collaboration relationships with the suppliers on the basis of ethical principles. One of the major aims is to effectively contribute to the competitive capacity of the Corporation.

Purchase of goods and services

The purchases of goods and services required by Codelco are mostly performed independently by the productive divisions and the Corporate Headquarters. However, there are goods that, because of their high value and because they are used by more than one division, are purchased at the corporate level, thus harmonizing corporate requirements and making possible a joint negotation procedure.

Codelco`s purchasing bureaus have access to goods and services of the whole world, and they focus their interest on those companies capable of competitively supplying them as required by its productive processes and investment projects.

Codelco offers its suppliers a professional treatment, as well as trading relationships based on the highest ethical standards that ensure equity and transparency in the transactions, issues of the highest relevance to the Corporation.

Suppliers

Codelco defines as "Suppliers" those companies supplying it with either goods or services. Codelco expects its suppliers to embrace a philosophy that supports competitivity, innovation and a commitment to the succes of their customers.

Purchase and contract procedures

Codelco carries out its purchases and contracting within conditions of competitivity among bidders, for which it calls public or private bids. The decision for either modality is a function of the degree of competition in the market, scope of the supply or services, budgeted value and deadlines associated to the requirement, variables that will also determine the associated formalities.

Formalization of purchases and contracts

Codelco formalizes its purchases and contracts through the underwriting of purchase orders and contracts, respectively. Their content is in accordance with the conditions agreed upon by both parties in each case.

Requirements for suppliers

Just as Codelco offers its suppliers sound guarantees regarding both payment for the purchased goods and services and compliance of its obligations, it demands from them full compliance of the contract commitments, particularly as to commercial conditions, specifications and delivery terms.

Technologies associated to our functions

One of the competitive strategies of Codelco is the permanent incorporation of informatic and communication technologies. The following are some of the technologies supporting the functions of this unit:

a) This WEB site

b) SAP: Internal management software that includes a powerful logistic module making possible the fast, efficient and timely processing of the requirements for goods and services.

c) Quadrem: Electronic commercial platform for the mining industry, of which Codelco is a founder. One of the main goals of Qadrem (http://www.quadrem.com/) is to be a channel connecting the SAP system to the information system of each supplier, whatever that is, so that the relevant documentation can electronically flow from one the other. Quadrem also has functions (QUEST) allowing to publish electronic catalogues, to handle streamlined quote management and developing electronic bidding processes.

For information on Quadrem, to contact to telephone (56-2) 550 84 00 option 1 ot to e-mail ventas@quadrem.com.

With these technological resources Codelco expects to achieve full automation of its regular procurement processes and electronic integration with its suppliers, which should result in lower cost and improved quality of its procurement management.

Sale of surplus materials

Codelco also sells obsolete or surplus materials, which it presents in this web site grouped in the following way:

• Sale of Materials by List Price. It describes the materials with its corresponding prices and the Division where they are found, making it possible for buyers to send an offer.
• Auctions. It provides the schedule of auctions to be performed by Codelco and information that facilitates participation in them.
• Sale of Materials by Bidding. It provides information on sales of goods and equipment through a bidding process, allowing to obtain the administrative bases.