Thompson Citizen Editorial: Hats off to the save-the-smelter team (February 23, 2011)

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.

February 23, 2011

While we haven’t written in this space about the local Vale refinery and smelter saga since Jan. 5, it hasn’t been for lack of interest in recent weeks. Rather, we stepped back to watch events unfold and see how things play out a bit before offering our two cents again from the cheap seats.

At the same time, however, we are cognizant that some things merit commenting on along the way before the final chapter is written in this story, which is likely some time away given the final shutdown isn’t scheduled until 2015. It’s probably trite but nonetheless true to observe the obvious: a lot can happen in four years.

Last week, the save-the-smelter team as they’re sometimes dubbed by us (it includes the refinery, too, of course, but there are only so many words you can include in a catchy headline), travelled to Toronto again to meet with Tito Martins, chief executive officer of Vale Canada and executive director of base metals for the international parent company, and his senior management team, and deliver proposals aimed at keeping the smelter and refinery open beyond 2015 with those 500 “value-added” jobs Thompson NDP MLA and Infrastructure and Transportation Minister Steve Ashton often mentions, rightly stressing those two words – value added.

The Manitoba delegation deserves credit and support both on this page and throughout the larger community, regardless of the eventual outcome, for delivering on that initiative although we admittedly don’t know many details about the contents of what exactly they proposed yet while we await Vale’s response.

On Jan. 5, we had said in this space, “Thompson has three weeks to figure out the chessboard and whose move it really is,” as Martins “is due back in Thompson to address the Thompson Chamber of Commerce annual general meeting Jan. 26.” In actuality, it took the save-the-smelter folks more like 5½ weeks to get their proposals fully ready and Martins did express some annoyance Jan. 26, basically saying six weeks had been wasted waiting and Vale had yet to receive any proposals.

Mind you, developing the proposals had to be a pretty formidable task, when you had Martins saying categorically on his Jan. 26 visit here: “We don’t see any possibilities to actually change our decision, unless something really new comes up. It was the obvious decision. The picture we have in front of us today doesn’t show us any alternative.”

Like it or not, that is about as clear an answer as a CEO can deliver; no spin or sugar coating there.

Martins did note that Vale is “obligated” to look at any proposals that might be sent their way, but added that a relaxing of environmental restrictions – the federal standards for sulphur dioxide, or SO2, emissions would require a reduction of 88 per cent from the current Thompson levels – would still not give them enough reason to leave the smelter and refinery open, as the opening of the Long Harbour refinery in Newfoundland in 2013 will see feed from Voisey’s Bay sent there rather than Thompson, putting the feed levels at Thompson’s smelter and refinery well below the line of profitability. “Of all the scenarios we ran, there were some where we looking at bringing feed to Thompson,” said Martins. “There’s none available anywhere.”

What exactly that left to the local “political team” including Manitoba Energy, Innovation and Mines Minister Dave Chomiak, Steve Ashton, Mayor Tim Johnston, and United Steelworkers Local 6166 President Murray Nychyporuk to offer, based on work done by a Manitoba “technical team” made up of Manitoba Energy, Innovation and Mines deputy minister John Clarkson, John Fox, assistant deputy minister of the mineral resources division of the Department of Energy, Innovation and Mines, and Gary Ceppetelli, the City of Thompson’s director of planning and community development, is largely a matter of conjecture at this point.

Ashton had hinted in recent weeks on some significant movement on the environmental front, but that is largely a federal regulatory matter on the emissions front, unless the province is thinking of making a big move through Manitoba Hydro in offering Vale a long-term deal on cheap “green” hydro-electric power. That’s might be a starter with the Brazilian mining giant, provided there is nickel to process.