Outokumpu’s supply chain in media next week – acting firmly based on allegations in Guatemala

Outokumpu has been informed of several allegations towards its nickel sub-supplier Solway in Guatemala. We have stopped placing new orders originating from Solway and assess the situation on-site together with an outside sustainability expert.

In late 2021 Outokumpu was contacted by journalists from Uppdrag Granskning, an investigative television program produced by the Swedish national broadcaster, SVT. The journalists are part of a global taskforce investigating nickel mining in Guatemala aiming at releasing a story March 6th online and March 9th on Swedish television.

The journalists have shown particular interest in one of our sub-suppliers, Solway Group, and its Fenix mine in Guatemala, as well as their nickel ore supplier Mayaniquel.

Allegations taken very seriously – placing new orders from Guatemala stopped

SVT claims to have evidence that Solway has covered up cases of pollution in Lake Izabal. There are also allegations that Solway’s supplier, Mayaniquel, has a history of being involved in corruption and bribery in Guatemala as well as spreading disinformation concerning the local population and mapping journalists investigating the companies.

During the past year, Solway has purchased nickel ore from Mayaniquel and supplied Outokumpu with ferronickel produced from this ore without informing us.

“The allegations against the mining operations in Guatemala are very serious and something we have not been aware of. We are acting firmly and decisively on the new information and have initiated our own assessment together with an external partner specialized in sustainability matters. Until further notice, we have stopped placing new orders originating from Solway until we have carried out an independent assessment,” says Marc-Simon Schaar, SVP, Global Raw Materials Procurement & M&A, Outokumpu.

Members of our raw materials procurement team are currently in Guatemala to finalize the assessment together with the independent partner.

In Outokumpu’s production, over 90% of the material is recycled to minimize the need for primary raw materials. In our production, 75% of nickel comes from recycled steel, and the rest of the need comes from various suppliers throughout the world. In 2021, less than 3% of our nickel purchases originated from Solway’s mine in Guatemala. Solway’s Guatemalan nickel production has been a part of Outokumpu’s supply chain since 2015.

Our commitment to environmental and social sustainability is non-negotiable

Outokumpu significantly improved its sustainable sourcing practices in 2021. Various measures were taken in the sourcing of sustainable raw materials including strengthening company’s commitments, increasing policy review and resources, assessing human rights risks, and engaging external advisors.

Outokumpu has a zero-tolerance policy to all forms of corruption, and we expect all our business partners to comply strictly with this policy and all applicable laws and regulations.

Fact sheet on Outokumpu’s efforts in sustainable supply chain
More about Outokumpu’s approach on human rights in accordance with the UNGP Reporting Framework

 

Outokumpu’s Group Communications is handling the matter towards media. Should you have any questions, please turn to Päivi Allenius, VP – Communications, paivi.allenius@outokumpu.com (tel. +358 40 753 7374)