Dick DeStefano is the Executive Director of Sudbury Area Mining Supply and Service Association (SAMSSA). [email protected]
This column was originally published in the December, 2010 issue of Sudbury Mining Solutions Journal.
The Sudbury Area Mining Supply & Service Association (SAMSSA) has become a major player in mining centres domestically and globally in the past seven years. Our members’ proximity to a critical mass of mining operations in Central Canada and the quality of their products and services has enhanced their relationship with mining companies both domestically and globally.
John Pollesel, Vale Canada COO & Director for North Atlantic Base Metals Operations, supported this belief in a recent presentation to the Greater Sudbury Chamber of Commerce when he said, “(Vale) has one of the best mining supply and service sectors in the world today. This gives us a significant competitive advantage to have access to these supplies and services in our own backyard.
“Although we have embarked on a global procurement strategy, in order to have services and materials delivered as soon as possible, buyers are encouraged to check first with local vendors. In fact, between September 2009 and August 2010, 97 per cent per cent of purchases for goods alone for our Sudbury operations were from vendors located in Ontario.
“Eighty per cent of those transactions were with Sudbury supply and service companies, worth approximately $60 million.”
The recently completed Doyletech study on the Mining Supply and Service Sector in Northern Ontario reinforced the claim that the sector is of significant economic importance within Canada.
The results amazed most observers because there had never been an exhaustive study of what many assumed was a small mining supply cluster hidden away and working quietly for years in mining camps in northeastern Ontario.
The extensive interviews indicated that the total value of the mining supply and services sector output is $5.6 billion, involving some 500 companies employing 23,000 people. The approximate breakdown of sales and employment by the region’s four principal centres is as follows:
Sudbury $3.94 B 13,800
North Bay $0.77 B 2,990
Timmins $0.59 B 4,600
Thunder Bay $0.35 B 1,610
TOTAL $5.60 B 23,000
In recent months, the Greater Sudbury Development Corporation, which has consistently supported this sector, developed another program aptly called the Economic Gardening Model to “enrich and nurture” some of these local companies.
This initiative was based on a recent Scotiabank report on the Canadian economy which highlighted the fact that, “highly entrepreneurial small- and medium-sized businesses… will likely be a key source of Canadian job creation over the next decade.” With 85 per cent of all businesses in Greater Sudbury being classified as either small or medium-sized enterprises, the need to focus on growing existing businesses is deemed critical for local economic diversification and sustainability.
Five SAMSSA members were chosen to participate in phase one of the study. At its core, Economic Gardening, by assisting local entrepreneurs, is designed to support the creation of jobs and stimulate increased economic activity and, hopefully assist in finding new markets and expanding job opportunities within the mining technology cluster. The use of business database sources like ESRI USA Online, Lexis Nexis, Jigsaw and Dun & Bradstreet plus others will now be reviewed during phase two of the study and hopefully expand the quality of information needed for success in international markets.
Another component of the Doyletech Study described that the Northern Ontario mining technology cluster exhibited capacity and strengths in the following areas:
-Mining engineering and mine management
-Mining equipment manufacturing
-Customization of wheeled, tracked and flanged vehicles
-Equipment repair and rebuild
-Consulting, research, training and financing
There are numerous additional specialized capabilities, for example, in remediation and regreening.
The Doyletech Study indicated that 83 per cent of companies foresee significant revenue increases over the next three years; only one per cent see a decline. Employment forecasts are similarly optimistic.
The Northern Ontario mining technology cluster is healthy and vibrant and is supported by post secondary institutions, sophisticated mining research centres and local development corporations. It is a true “cluster” because it meets all the criteria required to maintain its growth. Partnerships with the Ontario provincial government are presently being developed that will assist the expansion in international mining markets.
Northern Ontario is the place to be if you want to succeed in the global mining market.