[Vale takeover of Inco] The great Canadian mining non-disaster – by Ian McGugan (Globe and Mail – November 4, 2016)


Sudbury’s experience of high wages and continued prosperity should quell fears about foreign acquisitions of Canadian mining assets

SUDBURY, ONT. – A couple of dozen men in hard hats and orange coveralls are gathered in a brightly lit, mud-splattered room, chatting about the type of topics we all chat about at work – the Leafs’ prospects, a daughter’s coming wedding, a deer someone saw on the drive in.

What makes these men different from pampered folks like you and me is that they are getting ready to drop more than half a mile into the earth. Once underground at Vale SA’s Totten Mine in Sudbury, Ont., they will operate giant scoops and haulers in dim, sweltering tunnels that have the capacity to kill the unwary or the unlucky.

“We’re lucky here because the depth and the ground conditions are pretty favourable for less seismic activity,” mine manager Gilbert Lamarche says nonchalantly as we prepare for the “cage,” or elevator, that will take us down to working depth. “But in other mines, the ground conditions are a much bigger factor.”

It’s a thought that tends to linger in the mind as men crowd into the narrow metal cage, the door rattles shut and we descend into the darkness at 1,700 feet a minute. Whatever else a mine may be, it’s fundamentally an operation rooted deep in a specific piece of the earth – which may be why the mines around Sudbury have become a powerful symbol for the territorial battle between local allegiances and global businesses.

Tempers flared ten years ago when two of Canada’s best-known companies, Inco Ltd. and Falconbridge Ltd., disappeared into the arms of foreign acquirers. The nickel miners had operated in the Sudbury Basin for generations. Many Canadians believed that allowing outside buyers to acquire the national icons was a colossal error on Ottawa’s part.

This newspaper billed the takeovers as “the great Canadian mining disaster.” Nickel prices were soaring at the time and it seemed clear that Canada’s resource industry was selling prized assets for a fraction of their true worth. “How did [the foreign acquirers] hijack one of Canada’s best hopes for a global corporate champion?” the story asked.

It put much of the blame on inept leadership at Inco and Falconbridge. The leaders of the two firms fumbled an opportunity to merge and simply weren’t up to the task of fending off “a new breed of 21st-century raiders,” according to the narrative. Sure, shareholders and executives at Inco and Falconbridge did well by the deal, but Canada “lost control of massive mineral deposits, including Canada’s crown mineral jewel, the Sudbury Basin.”

For the rest of this article, click here: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/sudbury-mining-foreign-acquisition/article32675450/