I: COMPANY INVESTMENTS IN LOCAL OPERATIONS
Local Operations Managed by Two Major Mining Companies
lnco is planning capital expenditures of about $2 billion in the Sudbury Basin over the next five years to expand current production and build new mines. The company is embarking on the largest period of growth in Sudbury in more than 30 years. This is a conservative estimate and depending on the financial clout of the new owner, may be increased substantially, lnco has plans for new mine developments that include the Kelly Lake and Totten deposits, milling upgrades, smelter improvements, including investments in sulphur emission reductions and expansions at the nickel refinery. The company intends to maintain the stability of their workforce, with longer-term growth potential.
Falconbridge’s half billion-dollar Nickel Rim South project, currently under construction, may become the richest individual mine in Canadian history. FNX Limited is presently refurbishing two formerly closed mines to add to its current facility opened in 2004. In total, 11 mines are in operation with an additional half dozen new developments in various stages of potential development. Greater Sudbury is home to one of the greatest mining camps that the world has ever known. Over the last century lnco and Falconbridge have developed mines throughout the Sudbury Basin and, as a result, have established extensive and sophisticated mining operations including mines, mills, smelters and refineries. Apart from the untapped ore bodies, there is enormous untapped potential that could be realized if local operations were to be integrated.
WHAT IS REQUIRED?
• Explore joint synergies between local mining operations
Capital Investments in the Sudbury Basin
Corporate decision-making is generally planned in a 20-year time frame. The Sudbury Basin is a gigantic, multi-generational ore body that belongs to the people of Sudbury, Ontario and Canada. The new owners must understand that it is a privilege to own and economically benefit from this unique natural resource. The Basin must be mined in the most sustainable and efficient manner possible. At the same time, the community must understand that the capital expenditures and technical expertise to profitably develop this massive resource comes from the private sector.
The starvation of capital investment in the 1990s had a significant impact on the local mining sector’s long-term viability in the Sudbury Basin. There was local fear that the lack of mineral reserves would result in the closure of the company’s smelter and elimination of all jobs. The discovery of Nickel Rim South changed those grim forecasts. In the broader mining sector, the
low commodity prices of the past quarter century has resulted in low exploration budgets and reduced capital expenditures.
WHAT IS REQUIRED?
• Make significant investments in local exploration and operations
Location of Canadian Head Offices
There is also a concern that the very fabric of the region will dramatically change with foreign corporate owners whose roots in the local community are very shallow. It would be preferable to see both companies stay under Canadian ownership; however, Canadian mining, exploration and mining supply and service companies have a major international presence, operating in more than 100 countries around the world where our expertise is in high demand. It is not feasible in this interconnected, global economy not to allow foreign ownership of Canadian assets.
Currently Inco’s Head Offices are located in Toronto. In contrast, Cameco Corporation, the world’s largest uranium producer has established its head office in Saskatoon, Saskatchewan as the company’s largest uranium mines are located in the northern part of that province. Both Stelco Inc, and Dofasco Inc, have their corporate head offices in Hamilton as their main manufacturing facilities are located in that city. The takeover of one of Canada’s iconic mining corporations and its strategic land holdings in the Sudbury Basin will contribute billions to corporate shareholders for generations to come. Locating the head offices in Greater Sudbury would be a tremendously positive signal to the people of this community of the new corporation’s commitment to sustainable development of this extraordinary natural resource.
Over the past thirty years, the community of Greater Sudbury has evolved into a dynamic and diverse regional capital – the centre of business, financial services, government, healthcare and education. This city offers a lifestyle that is unsurpassed anywhere in Ontario. Locating head offices in Greater Sudbury will further enhance the community’s role as Northern Ontario’s “hub city.” Furthermore establishing a significant corporate presence in the urban centre would contribute to our downtown renewal efforts. In the late 1970s, in a bold move to enhance sustainable development in Detroit’s rundown central core, General Motors built their new corporate showcase headquarters – the Renaissance Centre. This potential development in Sudbury’s downtown could make an enormous impact on the community’s urban development.
WHAT IS REQUIRED?
• Locate Canadian head offices in downtown Sudbury
Under Funded Pension Plans
There are between 12,000 and 14,000 lnco and Falconbridge pensioners living in the Sudbury Basin. Currently both the lnco and Falconbridge pension plans are not fully funded. If there were to be any problems, the Province, through the Financial Services Commission of Ontario – which falls under the Ministry of Finance – would be called upon to bail out the plans as they did with the under-funded Algoma Pension Plan when that firm faced bankruptcy in 2002. In this booming metals market, no mining company should have issues regarding their financial solvency.
WHAT IS REQUIRED?
• Fully fund the pension plans under Ontario pension regulations
11: COMPANY & GOVERNMENT INVESTMENTS IN TRAINING & EDUCATION
Community Colleges and the Federated School of Mines
Of the approximate 4,300 current lnco workers in the Sudbury operations, about 1,100 of these employees – all with more than 30 years of experience – are eligible to retire next year. In the context of the current shortages for skilled labour and the impending retirement of one quarter of the workforce, the three-year moratorium on layoffs that is currently in place is hardly surprising.
Cambrian College has been providing research for the mining industry for about 40 years. The College offers Mining, Geology, and Civil Engineering diploma programs as well as apprenticeship and skilled trades training, graduating over 1,000 students annually for entry into the mining industry. The College also provides over 50 customized training courses and programs for skilled trades workers, leadership and management employees, and computer skills for staff at both lnco and Falconbridge as well as to the mining industry across Canada. Cambrian College also provides mining education and training around the world. Over the past decade Cambrian has provided mining expertise in education and training to government and industry
partners in Chile, Ecuador, Tanzania, Peru, Saudi Arabia, Zambia and Zimbabwe.
Under Cambrian College’s leadership, in association with College Boreal, Canadore College, Confederation College, Sault College and Laurentian University, the Federated School of Mines was recently established. This educational partnership will facilitate student access to education in the mining and minerals industry. It will also enable post-secondary institutions across Northern Ontario to respond to the labour force and other development needs of this industry. Education and training in mining and associated fields will be available in more locations to a larger number of industry employees and students.
In addition, College Boreal, the only French-language College in the North, has added a 20,000 square foot trade training centre which will significantly increase the number of bilingual skilled trades people available to the mining industry. The College also offers a Mining and Civil Engineering Technology program and in the last two years, enrolment in the program has increased by over 50%.
WHAT IS REQUIRED?
• Ensure that bilingual skilled trade development programs are adequately
• Fund expansion of College Boreal’s Institute of Trades & Applied
• Companies and businesses to support apprentice programs
A ‘Harvard’ of the Mining Sector
According to a comprehensive study by the Mining Industry Training and Adjustment Council (MITAC), the mining industry needs to fill 81,000 high-paying, highly skilled new positions in the next 10 years due to our aging workforce and lack of interest among Canadians in a mining career. Forecasters predict that demand for admissions at Canadian universities is expected to increase by at least 30 per cent within a decade forcing institutions to either turn away qualified applicants or expand dramatically.
Sudbury has one of the highest concentrations of mining education facilities in Canada. It is also the only mining community in Canada to host a research university. According to INORD, an estimated 700 people are engaged in mining-related research across the region. Currently, the three mining engineering programs in the province of Ontario – University of Toronto, Queens and Laurentian – are all small, under-subscribed and require high costs to maintain. Between 1995 and 2002, mining engineering programs in all of Canada produced on average only 109 undergraduates per year. In the last few decades fewer and fewer young people appear to see the mining industry as an attractive career choice or business opportunity.
Strategic public sector investments to expand university mining education must be made to attract and prepare the next generation of trained professionals needed in the rapidly growing mining sector. Ontario needs to develop a premiere mining engineering, processing and geo-science institution- a “Harvard” of the mining sector.
WHAT IS REQUIRED?
• Establish Laurentian University as Ontario’s premiere mining engineering,
processing and geo-science institution
• Develop a campaign encouraging youth to consider a career in mining
Greater Sudbury’s aboriginal community has the fastest growing population in the city; yet there remains high unemployment and low education levels among aboriginal youth. There is a tremendous opportunity to attract and prepare these young people for a future in the mining sector. In addition, many new mine developments in Northern Ontario will be on traditional Aboriginal territories and it is imperative that the next generation of Aboriginal students participate in their development.
Outreach programs to Aboriginal youth would be an essential component of expanding the province’s mining engineering and geology programs in Sudbury. A similar outreach program exists with the Northern School of Medicine in Sudbury and Thunder Bay.
WHAT IS REQUIRED?
• Provide outreach programs for Aboriginal populations across the North
111: COMPANY & GOVERNMENT INVESTMENTS IN RESEARCH & INNOVATION
Sudbury- The Silicon Valley of the Mining Sector
Mining is one of the most technology dependant sectors of the Canadian economy. Like other facets of a modern economy, the silicon chip has revolutionized every stage of the mining process, from satellite imagery for exploration to the use of robotics underground. Technology has helped improve working conditions, increase efficiency and lower production costs. In fact, there is a technological revolution surging through the mining industry and Sudbury is at its epicenter.
About 85% of the mining workforce uses advanced technology including advanced materials, telecommunications and electronics. Mining productivity has grown 42% from 1997 to 2003, higher than total manufacturing, chemical electronics and computers. The mining sector has always relied on technical improvements to help solve the many challenges associated with supplying essential materials for industrial development. In 2003, lnco donated $20 million to Memorial University in St. John’s, Newfoundland to establish a mining innovation centre. The Voisey’s Bay nickel deposit is only one tenth the size of the Sudbury Basin.
Canada is the second largest producer of nickel and Sudbury is sitting on top of an ore body that has another 100 years of production. Sudbury is also at the centre of some of the most revolutionizing experiments in mining robotics and automation. Sudbury’s hard-rock drilling technology is also in competition to supply a lightweight robotic drill for NASA’s space mission to Mars. The community of Greater Sudbury has established one of Canada’s most significant clusters of mining research at the local university and two community colleges. Globally, vital research projects such as the Sudbury Neutrino Observatory also make their home in Greater Sudbury,
In the past twenty-five years, post-secondary institutions have witnessed declining enrolments in mining engineering, geology and other technical programs, Every successful high-technology cluster around the world is anchored by a large engineering school with well-funded research programs. This connection supports the cluster businesses to create and apply new technologies and to successfully compete internationally. In most technology clusters, many of the start-up firms are spun-off of university research activities.
The best example of this is Silicon Valley and its strong connection with Stanford University’s renowned engineering faculty. The technology related sectors of science, math and engineering are the wealth creators of any society or country. It is the engineering schools of the world that produce innovative business people like Bill Gates of Microsoft and Steve Jobs of Apple Computer. With this wealth creation societies are able to afford health care, education, social programs and high quality infrastructure.
The federal government has fully funded an Aluminum Technology Centre in northern Quebec’s Lac-Saint Jean region at a cost of $65 million, The Lac-Saint Jean region is the centre of the province’s aluminum industry. This centre will help Quebec become a world leader and innovator in aluminum technology. Part of the reason the federal government fully funded the research centre is based on the fact that Canada is the fourth largest aluminum producer in the world. However, aluminum producers in Quebec must import all their raw material bauxite, to make this metal.
Australia, a major mineral producer with a population of 19 million, has two world-class research institutes dedicated to mining innovation. These institutions are helping Australia overtake Canada’s traditional lead in this technologically sophisticated field. The Cooperative Research Centre for Mining Technology and Equipment (CMTE) has established itself as Australia’s leading research organization for the development of new technologies for mining.
The Centre’s long-term strategic goal is to develop a range of new productivity-enhancing technologies to the Australian mining sector.
The Commonwealth Scientific and Industrial Research Organization (CSIRO) is one of the world’s largest and most dynamic research organizations that perform research and development over a broad range of areas that include mining, metals, manufacturing sciences and minerals. The Australians are aggressively competing with Canada to become the most prominent global exporter of mining expertise.
Canada does not have a major National Research Council (NRC) funded facility dedicated to the mining sector. Currently, much of Canada’s mining-related R&D is being undertaken in an uncoordinated manner. Larger scale, critically important projects are not attempted due to lack of funding.
The Ministry of Northern Development and Mines through the Ontario Mineral Industry Cluster Council (OMICC), have worked in partnership with FedNor, the mining industry and other partners to establish a major mining research institute at Laurentian University where significant mining research is currently concentrated. The Centre for Excellence in Mining lnnovation (CEMI) was established in December 2005 and has been seeded with $10 million contribution from the Government of Ontario and a further $5 million cash and in-kind commitment from Inco. CEMI will focus on five areas: mining exploration; the problems of deep mining; integrated mine process engineering; telerobotics and automation; and, environment and reclamation. CEMI, in cooperation with community partners will increase the productivity of local and regional mining operations and develop the export potential of successful research; develop applications and ensure a sustained base of highly qualified professionals and skills training programs.
Most geologists and mining experts feel the Sudbury Basin ore reserves will last for another century. Canada is the second largest producer of nickel in the world. Establishing CEMI in Sudbury will rapidly make the community a magnet for capital and entrepreneurs, further cementing the Sudbury Basin’s reputation as a centre of mining excellence – the Silicon Valley of the mining sector.
WHAT IS REQUIRED?
• Provide sustainable funding for the Centre for Excellence in Mining
Centralized Federal Mining Research Programs
Former Liberal Premier, the Right Honourable David R. Peterson recognized that the future belonged to regions that embraced the leading-edge of technical innovation and knowledge-intensive activity. He understood the incredible potential of Sudbury’s mining industry and relocated the Ontario Geological Survey along with the head office functions of the Ministry of Northern Development and Mines to Sudbury. On July 30, 1986 the then Premier commented that Sudbury was chosen “…because of its growing reputation as a centre of mining experience and know-how. This government wants to build on that reputation and put Sudbury on the road to being an internationally recognized centre of excellence in the earth sciences, mining and mineral research. To do that means increasing the store of mining knowledge that is here already.”
The Ontario Geological Survey is a provincial agency that provides essential geoscience data to Ontario’s $7.2 billion mining sector to efficiently explore and develop the province’s mineral resources. In 2005, the Sudbury Basin attracted more mineral exploration than all of British Columbia. A critical factor for a healthy and growing mining industry is public funding of geo-science information. These surveys are critical to the discovery of new mineral deposits. Every public dollar spent on geoscience activities generates $5 worth of private sector exploration activities. When a mine is found, that single dollar will generate investment and provide jobs. Currently the Geological Survey of Canada and CANMET Mining and Mineral Laboratories are
located primarily in Ottawa.
WHAT IS REQUIRED?
• Transfer federal mining-related research programs to Sudbury
Sheridan Park Technology Centre
Historically, lnco has always spent significantly on research and development. The company has discovered many of the nickel alloys and production processes used widely throughout the industry. The original supernickel alloys that enabled the jet engine to develop were invented by lnco metallurgists. The sulphide and laterite ores that contain nickel are very complex. There are few companies with the technological knowledge of how to economically refine nickel.
In an August 2, 2006, National Post column by Diane Francis, mining analyst Terry Ortsland stated, “Nickel is the only commodity that has technology associated with it. It is pretty complicated to produce nickel compared to copper or other metals.”
lnco has a prestigious research facility in Mississauga, Ontario called the Sheridan Park Technology Centre. In 2004, the Company’s total research expenditures were an estimated $37.4 million. Xstrata Nickel has committed to establishing a new technology research and development unit, the Process Technology Development Group in Sudbury.
WHAT IS REQUIRED?
• Mining companies to establish their research facilities in Sudbury including
the relocation of the Sheridan Park Technology Centre