Steve Ashton: Manitoba MLA Report – (Thompson Citizen – May 27, 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.

Vale’s continued lack of commitment to value-added jobs disappointing

Steve Ashton

Since 1956 the vision of the Thompson Inco operation has been clear. It was the first fully integrated nickel operation in the world.

The 1956 framework and the agreement signed by Inco and the Manitoba government specifically identified the fact Thompson would have a mine, mill, smelter and refinery. It outlined both the obligations Inco would have to support municipal services and various land allocations, including exclusive access to mineral leases in the Thompson area.

In the early days Inco provided many of the initial facilities and services for Thompson. Over time Inco also paid a grant-in-lieu of taxes to the City of Thompson and school board. This decreased over time as renewals were negotiated. Why? Under the 1956 agreement most of the grant-in-lieu was voluntary. Successive city councils and school boards had very little bargaining power.

Since 1956 Inco has also had preferential treatment for leases in the Thompson area. It has also had a royalty structure that reflects the fact it creates value-added jobs from its Thompson operation.

On Nov. 17, 2010 when Vale announced its intention to close the smelter and refinery it marked a clear departure not only from the 1956 agreement but from the way we do things in this province. There had been no discussions with stakeholders about solutions to maintain these value added jobs before the announcement.

Despite Vale’s lack of discussion with stakeholders before the announcement we came together after the announcement to put forward solutions. We addressed the reasons that had been given for the announced closure. We contacted the federal government to be part of the solution. We put forward numerous possible solutions but Vale brought no proposed solutions to the table.

Last week Vale gave its public response when it again talked about the closure of the smelter and refinery and it announced that it is hiring consultants to talk about diversifying the Thompson economy. This is exactly what Vale had intended to do in November.

Vale’s response was disappointing and unacceptable. Vale did not address the real issue of value-added jobs. Vale did not even provide assurances about its commitment to maintain its support to the city and school board beyond a reference to discuss the issue.

Manitoba is not the only jurisdiction having difficulty with Vale. There is a great deal of frustration in Brazil itself over Vale’s actions and lack of engagement with stakeholders. This was one of the main factors behind the recent ouster of Vale CEO Roger Agnelli.

The province of Manitoba has an obligation to protect Thompson and Manitoba’s interest. We continue to be willing to discuss real solutions that will maintain value- added jobs in Thompson. We can, and we will act, including bringing in legislation to protect and support Thompson and Thompsonites.