Dick DeStefano and the birth of SAMSSA – Stan Sudol (Part B)

Fuller Industrial PhotoSudbury Mining Supply and Service Industry is Enormous

More money is spent within a 500-kilometer radius of Sudbury on underground hard-rock mining supplies than anywhere else in Canada, the United States or Chile. In 2006, Inco alone spent over $400 million on local supplies and services. That figure will only grow with the announcement to bring the Totten Mine into production as well as the Creighton Deep and Copper Cliff Deep projects. Xstrata Nickel is building Nickel Rim South, while FNX Mining will be bringing the Podolsky mine into production in 2008, just to mention a few other initiatives.

One of the main aspects of SAMSSA is the global nature of the organization. During its first year, DeStefano made contacts with 125 embassies focusing on their trade commissioners and government agencies who might have been interested in partnerships or distributorships. By focusing on the global markets, SAMSSA was ensuring that the world mining community understood that the local mining supply and service (MS&S) sector was open for business, as well as lessoning their dependence on the local mineral producers.

“The organization has gone a long way in globally branding Sudbury as one of the best sources of innovative mining supply and service products,” DeStefano said. “The sector compliments the mining industry and continues to emphasize its dedication to increasing efficiency, productivity and lowering costs.”

A 2006 Institute for Northern Ontario Research and Development (INORD) survey conducted for FedNor at Laurentian University indicated that innovation is extremely high among the cluster of MS&S companies in Northeastern Ontario. The study revealed that 83 out of 90 of the firms surveyed indicated they were upgrading products and services, and 72 out of 93 had introduced a new product or service in the preceding three years.

Fuller Industrial is expanding and has recently moved into a new 23,000 square foot building. The company lines pipes with rubber, making them resistant to abrasion and chemical corrosion. Fuller also does pipe and fitting fabrication, engineering, export packaging and painting, exporting their products from their Sudbury operations. The four year old company employs 45 people and their export sales have gone from 10% of their business to over 60%.

They recently secured a contract to supply essential pipe and fittings for the multi-billion dollar Ambatovy nickel laterite project in Madagascar that is being built by Sherritt International. They have purchased special robotic welding equipment for this contract – the first in Ontario – that will allow the company to produce a 100% x-ray quality weld every time.

Fuller Industrial President Jeff Fuller says, “With our highly skilled employees and innovative thinking, our company intends to become the premier fabrication and rubber lining company in the world, as measured by quality, customer satisfaction, profitability and growth.”

Fuller Industrial PhotoOne of the largest supply and service companies in the Sudbury Basin is Atlas Copco Construction and Mining Canada. Sudbury is the site of their Canadian headquarters and they employ about 250 people. The company produces and services underground and surface mining equipment, rock re-enforcement products and rock drilling tools.

Based in Sweden, Atlas Copco is also globally known for their heavy and road construction equipment as well as systems for ground water and oil extraction. From the principal Sudbury location and through a network of regional field service centres across Canada, the local operation is one of 20 plus specialized operating units representing the Atlas Copco Group in North America.

Canadian owned Mining Technologies International Inc. (MTI) operates four manufacturing facilities producing a wide range of advanced mining equipment. Some of the products are hydraulic drill jumbos, LHD loaders, shaft drilling jumbos, computerized drill rigs, mine locomotives as well as custom designed equipment for specific underground requirements. They employ about 200 people at their Sudbury operations.

MTI is the result of several mergers with other companies that are now operating as divisions. Some of these well respected companies such as, Drillex International of Canada, Continuous Mining Systems, LHD Equipment, and John Clark Inc. are very familiar to the mining industry.

“MTI has very strong roots in the Sudbury Basin. One part of our company originally started out as a machine shop in the 1930s,” says MTI’s Marketing Manager Ryan Lipic. “Like many other service companies in the Sudbury Region, MTI has grown to be part of a world-class mining supply and service sector that is exporting their products and knowledge around the world. Sudbury was our starting point, but now the world is our market.”

Due to the productivity improvements in the mining sector, the real employment growth will not be in expanding mining activity but in the supply and service industry. Two years ago a SAMSSA study indicated that about 17,000 people are directly employed in the MS&S industries in Sudbury, North Bay and to a lesser extent Timmins, compared to fewer than 10,000 working in the extraction, smelting and refining sectors. A conservative estimate of the annual payroll in this sector was about one billion dollars. In Sudbury, 320 MS&S companies employ approximately 14,000 people.

DeStefano said, “The shift in economic emphasis has great significance for northeastern Ontario because it challenges the traditional view that extraction and refining is the region’s major employment engine. For the first time in the 120-year history of Sudbury mining, more people are employed in the MS&S sector than in primary mining, smelting and refining.”

In recognition of this sector’s major contribution to the region, the City of Greater Sudbury has made the mining supply and services sector the community’s No. 1 engine for economic growth.

The world recognizes the importance of the rapidly growing local supply and services sector, as witnessed by the trade missions coming to Sudbury. Last spring more than 50 businesses and government visitors from Brazil, Chile and South Africa’s North West Province met with SAMSSA members.

“According to many financial experts the commodity super-cycle is going to last for decades due to the enormous growth in China, India and many other developing countries. The extraordinary combination of a long lasting mineral deposit with exceptional supply and service expertise will ensure continued prosperity in this community for years to come,” said DeStefano.

On June 9, 2005, David Courtemanche, who was the mayor of Greater Sudbury, at the time, endorsed the efforts of SAMSSA in his annual report to the Greater Sudbury Chamber of Commerce.

“…today, we’re building upon generations of mining expertise, and using that know-how to teach others around the world how to mine better, faster, in more environmentally sound ways.  At the same time, we’re now using our expertise to build the tools of this trade, better than anyone else can, and selling those tools to companies and countries, around the world…It is the cooperative leadership of organizations such as SAMSSA that is leading the way.”

DeStefano said, “This has been a pilgrimage for me personally and hopefully makes Sudbury and Northeastern Ontario more prosperous economically and perhaps give the next generation an opportunity to stay in the community that gave me and my family such a great life.”

Stan Sudol is a Toronto-based executive speech writer and mining columnist. www.republicofmining.com