Vale cuts don’t concern SAMSSA director – by Heidi Ulrichsen (Sudbury Northern Life – January 11, 2013)

‘Other places besides Vale’ to do business

Local mining supply and service companies won’t be majorly impacted by Vale’s decision to downscale its Clean AER project and move to one furnace at its Copper Cliff Smelter, said Dick DeStefano.

The executive director of the Sudbury Area Mining Supply and Service Association (SAMSSA) said his members were only winning about 25 per cent of the Clean AER contracts anyway. A website dedicated to Clean AER contracts hadn’t posted any new jobs up for grabs for the last three months, DeStefano said.

But with Clean AER’s scope being cut from $2 billion to $1 billion, he said he’ll never know how many contracts his members could have won. “There will be no tenders put out, and you won’t know,” he said. So far, DeStefano hasn’t received any phone calls from members who are losing contracts because of the cuts.

Companies that specialize in servicing the smelter may be hurt by the company’s decision to shut down one of its furnaces, but again, he said he doesn’t see a large overall impact on his membership.

DeStefano estimates other Vale projects, such as the Victor Capre Mine and the Copper Cliff Deep project, will be worth about $2 billion anyway, and will provide many contract opportunities for local companies.

Then there’s the fact that many SAMSSA members sell their products and services internationally, he said.

“Look, there are other places besides Vale we can do business,” DeStefano said. “We’ve proven that we can do that.”

When it comes to his assessment of the reasoning behind the cuts, he said that Vale, like all other large companies, is “making very concentrated and deliberate decisions about operating in a slow economy.

“No matter what we say, and how we react, it’s not going to change the perception of the major companies around the world who are holding back on projects all over the place.”

There’s both a good and a bad side to the cuts, DeStefano said.

On the good end of the spectrum is the fact that the local air quality will be improved by 50 per cent because the reduction in the number of furnaces will mean less air emissions.

An obvious negative are job losses which could be coming, although Vale said it hopes to keep these to a minimum through attrition and reassigning workers, DeStefano said.

As well, given the new mines coming on line, there may be a day when Vale will regret decommissioning one of its furnaces, he said.

“What happens if they don’t have enough capacity in one furnace, because the other furnace will be gone?”