Thompson Citizen Editorial: Thompson residents resilient [Vale Job Cutbacks] (November 24, 2010)

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.

Thompson Citizen Editorial – November 24, 2010

In terms of dark days for Thompson, Wednesday, Nov. 17 ranks right up there near the top. Brazilian mining giant Vale announced plans to phase out its smelting and refinery fully integrated surface operations at Manitoba Operations by 2015, eliminating 500 jobs or 40 per cent of its local workforce, and focus on “developing new sources of ore as it transitions its operations to mining and milling….”

The estimated payroll hit to Thompson for job losses of that magnitude is at least $50 million annually, money which will no longer be circulating in the local economy as some of the city’s highest paid jobs vanish.

Tito Martins, chief executive officer of Vale Canada and executive director of base metals for the international parent company, said two key issues underpin the operating changes. “Mineral reserves in Thompson have not been sufficient to operate the smelter and refinery at full capacity for some time. To account for this shortfall, Vale has been importing as much as 45 per cent of the nickel processed in Thompson from sources outside Manitoba. This external feed is no longer available after 2013.

“Also contributing to the change,” Martins said, “are new federal SO2 emission standards expected to come into effect in 2015. The new standards require a reduction in airborne emissions of approximately 88 per cent from current levels at the Thompson operation. Vale has concluded that it cannot practically meet this new regulatory standard in Manitoba.”

Thompson NDP MLA Steve Ashton, also minister of infrastructure and transportation, had strong words for Vale saying, “Since the 1950’s Thompson has had a fully integrated mining operation. The development of the refinery and smelter were integral parts of the 1956 agreement that established Thompson …Vale’s announced shut down of the surface operations in Thompson came without any discussion about solutions with key stakeholders or the provincial government. I have never seen a more arrogant and insensitive move.”

Perhaps, but we’re not so certain that 33-page agreement from 54 years ago is going to offer that much comfort to the province’s position at the end of the day, although you can be sure lots of lawyers are poring over it clause by clause. It contemplates mainly the issues surrounding a complete mine closure or abandonment of the operation by the company, rather than a cutback or change of use.

It is, however, important to have historical perspective. We are a resilient community. This is not the first time economics has resulted in Thompson facing tough times. According to Statistics Canada, our population peaked at 16,219 in 1971, although a local count that same year had put the number at 21,000.

Mining towns exist because they have a non-renewable resource that makes them inexorably bound to a cycle of boom-and-bust. Thompson discovered this truth for the first time in 1971 when Inco announced the closing of the Soab mines; Pipe Number 1 Mine was closed; and work was slowed down at the open pit as all production was cut and more than 200 jobs shed. By the end of 1971, Inco had laid off 30 per cent of its workforce here.

“The Greens” on Nickel Road, part of the eight-building apartment complex made up also of “The Pinks” and “The Yellows,” as old-timers still sometimes call them, built by Malcolm Construction in the 1960s, wound up back in the hands of mortgagor Canada Mortgage and Housing Corporation (CMHC) and sat vacant for more than two years.

In 1998, the future of the community again looked bleak at best. Nickel was selling for $1.65 a pound and the date for closure of Inco’s Manitoba Operations was looming for 2004 until the deepening of the Birchtree Mine was announced.

And, of course, seven years ago, under Inco ownership, the company set in motion the formal legal steps under the Mines and Minerals Act to begin 10-year notice of mine closure. The Thompson Community Development Corporation, founded in 2003 before changing its name in 2005 to Thompson Unlimited, is a direct result of that.

Tough times on the horizon? Yes. Unprecedented? No.

Faith in tomorrow’s future for some of us will mean faith in divine providence and for all of us the willingness to do the work the season demands with faith in our fellow citizens today – our neighbours, our co-workers, our local merchants – as we stand strong and shoulder-to-shoulder with our USW brothers and sisters.

“One day longer, one day stronger.”