Vale: Chomiak says province will ‘bend over backwards’ [Vale Job Cutbacks in Thompson, Manitoba]

This article was originally published in the Thompson Citizen which was established in June 1960. The Citizen covers the City of Thompson and Nickel Belt Region of Northern Manitoba. The city has a population of about 13,500 residents while the regional population is more than 40,000.

January 26, 2011 -by Ryan Flanagan

Provincial Innovation, Energy and Mines Minister Dave Chomiak was in Thompson last week, where he updated the Thompson Chamber of Commerce on efforts to reverse Vale’s decision to close its smelter and refinery in Thompson by the end of 2015.

“We will not consider the closing of the refinery and the smelter as an only solution,” he told the crowd of approximately 75 community leaders, businesspeople, and politicians. “We will not accept that. We’ll only consider options if Thompson and Manitoba, and the people that work here, have a value-added option.”

“Before the end of the month, we’re going to be providing options,” said Chomiak. “We want Vale to look at those options seriously. We think that their decision – even though they say that they canvassed a number of options – was made by only one party, in a complex business and social development that requires the input of many people, not the least of which are the people of Manitoba who own the mineral rights.”

Though Chomiak did not discuss specifically what those options could entail, saying that he does not negotiate in public, he did suggest that closing the smelter and refinery could be acceptable if Thompson came out of it with a net benefit. “If there’s an option that provides long-term, value-added sustainability to this community and this province, of course we’d look at it,” he said.

Vale Canada president Tito Martins will be in Thompson tonight to address the Chamber’s annual general meeting, but this appearance will take place before he is presented with the options Chomiak spoke of.

“The two major arguments made by Vale, about the environment and about the feed, both have the capacity to change, or to be negotiated,” said Chomiak. “The issue is SO2s. We’ve found ways of dealing with SO2s, there are options with SO2s, and frankly, to follow the other options will create greater CO2 which is a more significant problem in the country as a whole.” SO2, otherwise known as sulfur dioxide, emissions were cited as one of the main reasons for the smelter and refinery closure, with new federal environmental standards in that area to take effect in 2015.

Chomiak noted that while SO2 emissions might be a concern, shipping ore mined in Thompson to other locations to be processed could result in other environmental problems. “The hydro that supplies the power to Vale is 100 per cent renewable,” he explained. “You ship that product out, you do it somewhere else – coal-fired electricity or something else is going to be used to process that material.”

Switching gears, Chomiak turned his attention to the other reason cited for the closure – a lack of feed for the smelter and refinery. “Feed is a problem, but Vale itself has already said that they want to move on the D-1 and the Kipper Pipe,” he said. “Their timeline is a few years out – well, timelines can change. You can move it forward. Vale could really move up its supply here if they wanted to.”

Chomiak also pointed out – in a refrain that has regularly been heard from Thompson MLA Steve Ashton, who was also present at this speech, since Vale’s Nov. 17 announcement – that Vale is only leasing mining rights in the area from the province. Chomiak said repeatedly that the minerals ultimately belonged to the people of Manitoba. “Land use and access to mineral rights is ultimately under the control of the province,” he said. “The province controls the legal authority to do that.”

“We understand business plans, but business plans include a lot of things other than straight accounting numbers methodology: the environment, the workforce, your community responsibilities, your assets, your future,” said Chomiak, who also suggested that in the current global business climate, any decision to negotiate and work out a solution with the local stakeholders would be seen worldwide as a good act of corporate citizenship.

Responding to a question about whether the 1956 founding agreement between the province and the company then known as Inco binds the company to a fully-integrated operation, including smelting and refining, Chomiak said that “their lawyers will say no, and our lawyers will say yes. I don’t think we have to go to that, I don’t think we have to go to the courts. In our view, the 1956 agreement is really significant in what it commits to. There was a spirit behind the complete allocation of a resource to a company.”

The main message of Chomiak’s speech was that the government is interested in looking at other possibilities for the future of Vale in Thompson besides the one laid out in the Nov. 17 announcement, and that this position was standard practice for the province.

“We consider ourselves the government that will bend over backwards to be flexible, to accommodate, and I think it’s largely been successful over the past decade,” he said. “The decision isn’t carved in stone, it doesn’t have to be made today. There are options that have to be explored. There’s a lot more talking to be done. This is not the kind of decision that should be made unilaterally.”

Chomiak also spoke highly of Thompson’s economic diversification efforts, singling out the new University College of the North campus and the GLACIER jet engine testing facility, both of which he pointed to as examples of the province working collaboratively to ensure that all groups could be happy with the outcome.