Norm Tollinsky is editor of Sudbury Mining Solutions Journal, a magazine that showcases the mining expertise of North Bay, Timmins and Sudbury. This column was originally published in December, 2008 edition.
Writing headlines for a quarterly mining journal can be a risky proposition. Such was the case with the headline, “Ontario firing on all cylinders,” emblazoned across the front page of our September 2008 issue. The story accompanying it trumpeted an exhaustive list of mine development projects and record-breaking spending on exploration. It went on to illustrate the effects of all of this activity on mining suppliers, the housing market and the wear and tear of the region’s roads.
“The general consensus,” the story noted, “is that the current supercycle, fuelled by the ascendance of China and several other rapidly developing economies, will endure for decades, with a few ups and downs along the way.”
Call it prescience or just gut feel, but perched as I was – and as we all were – somewhere in the stratosphere, recounting our blessings, I had this gnawing feeling in the pit of my stomach and couldn’t help expounding on the potential downside in my September column, “Euphoria and the law of gravity.”
“These are heady times, but let’s not fool ourselves,” I wrote. “Just as the tech bubble burst and the housing bubble burst, so too will commodity prices descend from their heights.”
October was a rude awakening, but it’s nothing more than one of those predicted “downs.”
You can read all about it in the appropriately headlined story, “Mining industry takes a breather” on Page 32 of this issue.
Volatility is nothing new for veterans of the mining industry, but those with the longest memories have learned to expect it and operate their businesses accordingly. I made the comment in my column last issue that you don’t have to be a genius to make money mining nickel at $20 a pound. “The real heroes,” I wrote, “are those who will find ways to continue turning a profit when the law of gravity reasserts itself.”
This is no time to despair. Timelines for exploration and mine development extend far beyond the ups and downs of the broader economy. Our cover story this issue, for example, puts the spotlight on the world’s most powerful raisedrill, which is scheduled to begin sinking two ventilation shafts in January as part of Vale Inco’s billion-dollar Copper Cliff Deep project. It will be several years before ore from this ambitious mine expansion project hits the market and finds its way into the kitchen sinks, apartment buildings, bridges and aircraft of the global economy.
The ore isn’t going anywhere. The brain trust remains intact. And the ascendance of the middle class in China and other developing countries will continue to drive demand. Commodity prices may have taken a dive, but the sky hasn’t fallen. Mining suppliers with innovative solutions and a diversified, global market will be well positioned to ride out this blip and emerge stronger than ever.