Vale announces operations transition plan [for Thompson, Manitoba] – by Matt Durnan (Thompson Citizen – March 7, 2012)

The Thompson Citizen, which was established in June 1960, 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 Manitoba Operations general manager Lovro Paulic spoke at the Thompson Chamber of Commerce on Feb. 29 to announce the company’s plans for 2012 and moving forward towards 2015.

The mining company will shut down it’s smelter and refinery operations in 2015 and, as a result are working on a transition plan to minimize layoffs as well as operate with fewer assets.

“Our goal this year is to produce 108 million pounds of nickel,” said Paulic, one of three general managers here. “We’ve already begun the process of converting to a single furnace operation. The plan was to produce 108 million pounds (of nickel) using two furnaces and five converters, but we’re going to attempt to do it using one furnace and two converters.”

Paulic explained that the process for transitioning long-term employees, defined as those hired prior to last Oct. 1, over to the mines from surface operations is being undertaken and strategies have been developed.

“The question is, how do we plan on doing that with minimal impact to the community and our operations, and to your businesses,” said Paulic.

Through the analysis process, forecasts show that Vale’s attrition rates are declining as they move towards 2015, and Paulic said they don’t expect to have to make any layoffs of employees hired prior to last Oct. 1.

All employees who will be required to transfer from the mining and milling sector will be afforded the opportunity to receive the necessary skills, knowledge and training. Seniority of hourly employees and transfer preferences will be respected in accordance with Vale’s commitments under the collective agreement with USW Local 6166.

“If we can’t retain, or employ someone here in Thompson, then we can employ them in Sudbury or somewhere else with Vale,” said Lovro, “with that there would not only be a relocation allowance but there would also be a $50,000 bonus to that.”

There is a .01 per cent chance, Paulic said, that Vale will have to lay off specified employees, but on that off chance, the employee would be paid out one and a half times their annual salary.

Non-management sources have predicted previously the final net job loss through layoffs could total somewhere between 250 and 500 jobs as a result of the smelter and refinery closure in three years – which would likely result in an annual payroll hit between $32.5 million and $65 million in payroll directly.

The Thompson Nickel Belt Sustainability Act, which was passed and received royal assent last June 16, has yet to be proclaimed into law by the NDP provincial government nine months later. Section 4 (a) of The Thompson Nickel Belt Sustainability Act, with its reference to the Thompson Nickel Belt Economic Development Fund, specifies the “operation of the fund is to be supported by amounts appropriated by the legislature for the fund, which amounts are to be determined with reference to the taxes paid by Vale under The Mining Tax Act.”

Jodee Mason, press secretary to cabinet, told the Thompson Citizen in an e-mail last Dec. 8, “We continue to be in discussions with Vale on the establishment of the fund, we expect to be proclaiming sections of the Act soon and will release more details once that occurs.” Three months later there is still no word on when the act will be proclaimed.

Short term, as well as medium and long-term retention strategies have been developed by Vale, Paulic told the chamber. A communication plan has been established which includes a community newsletter, employee business updates, and an hourly employee interest/ transition survey.

Retention and attraction initiatives have been undertaken, and includes an employee family facilitator program, designed to keep Thompson as an attractive option for employment in the future.

Vale has worked alongside the Thompson Economic Diversification Working Group (TEDWG), which it initiated and funded through Toronto consultants rePlan, and are invested in community and economic diversification initiatives going forward, Paulic said.

The company has also established a Northern Employment Strategy (NES) and are working on a pilot program in Nelson House as well as Thompson, to revise their hiring standards.

“Typically, what we’ve done in the past, is we get resumes and they either are an acceptable candidate or they’re not,” said Paulic, “what we’re working on right now, is looking at those candidates who don’t necessarily qualify right now, and what we can do with those potential candidates.”

Enter the Process Operator in Training (POinT) employment and training program. The eight-week training program will prepare those, who don’t necessarily measure up with either experience or education, to enter the workforce with Vale.

“If they are successful with the eight-week program then we will look in to hiring them,” said Paulic, “if they don’t meet any of the criteria, then they would first enter a 12- week program and if they pass through that, then they could enter the eight week program, and if they go through that they become potential employees.”

What the program will do, explained Paulic, is that local businesses will no longer be used as a starting point for experience, and Vale will now be able to prepare their potential employees independently.

Vale’s issue, lies not with retention but more with attraction, said Paulic, and that a better job needs to be done in educating people on the prospect of working in the mining industry.

“We have 30,000 people living in Northern Manitoba, and not many of them know much about mining,” said Paulic, “we have a responsibility to get out there and attract and make mining a number one priority as opposed to close to no priority.”