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Commentary

Canada’s ugly duckling industry

December 1, 2009
by David Robinson
In: Commentary, David Robinson with 0 Comments

Google “mining supply company” and you get a few companies with exactly that name. Next, you get the Sudbury Area Mining Supply and Services Association. Fourth on the page is a Google map of Sudbury with 16 pages of Sudbury-area firms.  The list ends on Page 16 with an invitation to “See all 566 results.”  It’s a small sign of the growing visibility of our ugly duckling cluster.  Here is another.

The Northern Growth Plan Proposal released by the provincial government on October 23 makes the supply and service industry centered on Sudbury a key part of the province’s vision for the entire mining sector.  The province has been working on this document for more than a year. It calls the release a ” long-term economic blueprint that sets out a framework to guide decision-making over the next 25 years.”  Item number one in the Plan of Action for the Mining Sector is to “maintain the competitive edge in Ontario Operations and grow the northern mining cluster.”

Just a few years ago, Northern Ontario’s mining supply and service cluster was the best-kept secret in the country.  Without any attention from senior governments, local businesses had grown to employ more people than the great mining companies of the Sudbury Basin. They were producing new technologies and selling them around the world.

Second and third generation companies were attracting new talent. Start-ups were blooming and old multinationals were expanding their operations, making Sudbury, North Bay and other communities in the region their North American headquarters.

The mining supply and service sector in northeastern Ontario is no hothouse bloom.

Unlike the high-tech sector in Ottawa, it wasn’t fattened on government IT contracts. Unlike Toronto’s MaRS Centre, it isn’t based on public sector health spending.  It carved out a niche in competitive private-sector markets around a core, old economy industry.

Maybe mining wasn’t sexy enough – whatever the reason, the businesses that supplied mining weren’t on the radar of Canada’s industrial strategists. But the picture may be changing. Canada has always had a competitive advantage in mining. It had to considering that half the country lies on the old rocks of the Precambrian Shield. A dozen ice ages have scraped the overburden off huge metal resources.

All 28 of Ontario’s metal mines are in Northern Ontario Shield rock.

Now, at the beginning of the greatest construction boom in history, the mines are being grabbed up by companies from around the world.

And the companies that have supplied those mines are coming into their own. The Northern Growth Plan recognizes this new reality. It promises to “implement an export strategy” to help the northern mining suppliers expand into new domestic and international markets.
It isn’t clear who is saving whom here. With the provincial economy hammered by a struggling auto sector and a dollar puffed up by Alberta oil, the province needs the mining supply sector to bring home some bacon. Suddenly, the ugly duckling is looking like a young swan.

Who knows if the provincial government has any specific ideas about how to help. At some point, bureaucrats in the Ministries of Economic Development and Trade, Northern Development, Mines and Forestry, and Research and Innovation will look to the last 15 to 20 years of work in Chile, Australia, Sweden and South Africa for clues about how to support this crucial sector.

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