Acquisition due diligence on a base metals refinery

Large metal tank, with grey sky

Acquisition due diligence on a base metals refinery

Kumi was appointed as the responsible supply chain consultant for two global minerals and metals companies who had agreed to jointly acquire a strategically important base metals refinery. Prior to the acquisition, Kumi was commissioned to deliver an assessment of responsible sourcing management systems and supply chain risks as a part of the broader due diligence efforts being undertaken by the companies.

Kumi advised on supply chain risks and best practice responsible sourcing

As part of the acquisition due diligence, the companies wanted to understand:

  • The scope of the supply chain that forms a part of the acquisition in an industry where long-term contracts with suppliers would already be established and be a part of the sale.
  • Supply chain risks and impacts that the new owners may have to address post acquisition, having particular regard to the evolving responsible sourcing compliance requirements relevant to the refinery’s operations.
  • What would be required to support the refinery to meet OECD good practice expectations to manage, mitigate and eliminate these risks, once the change of ownership occurred.

Benchmarking of supplier due diligence process pre-acquisition

Delivered remotely due to the COVID-19 pandemic, Kumi’s responsible supply chain consulting team undertook the following activities:

  • A desktop review of the site’s existing policies, procedures and management systems in place for supplier due diligence.
  • Remote interviews with relevant staff members to understand the structure of the supply chain and commercial relationships, and the existing responsible sourcing management systems in place to support supplier due diligence and operational compliance.
  • Benchmarking the design and implementation of responsible sourcing policies, procedures and operational practices, including supplier due diligence and capacity building, against the recommendations of the OECD Responsible Business Conduct Guidance.
Person wearing an orange jacket holding a clipboard and pen
Andrew Britton and Fiona Hutmacher wearing hardhats with lights on site

The outputs of this work were a supplier due diligence report that delivered the findings and set out recommendations for necessary actions to address risks or improve performance in the event of the acquisition proceeding.