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Conference Board places supply sector under microscope

March 1, 2009
by Norm Tollinsky
In: News with 0 Comments

Research being carried out by the Conference Board of Canada’s Centre for the Commercialization of Mining Technologies and Services hopes to shed light on some of the challenges preventing the Canadian mining supply and service sector from reaching its full potential.

“For some time now, the Conference Board of Canada has been aware of the fact that innovation and commercialization in the mining supply sector has been difficult in Canada,” said Gary Svoboda, the Centre’s network manager. “The Canadian mining industry is world class. It’s a major part of our economy, but the domestic suppliers of products and services to the mining sector are not as strong, not as competitive and not of the same scale.”

The Centre for the Commercialization of Mining Technologies and Services was established as a result of a preliminary meeting of industry stakeholders in December 2007.

“The idea was to brainstorm what could be done to understand the problem better and start to develop some solutions,” said Svoboda.

The meeting was held in Sudbury and resulted in the establishment of the Centre in the spring of 2008. Members include Vale Inco operations in Sudbury and Thompson, Manitoba, Xstrata Nickel, Barrick Gold, FNX Mining, Maclean Engineering, Marcotte Mining Machinery Services, Mining Technologies International, Cubex, Rock-Tech Sales and Service and 3M. Also participating in the initiative are the Ministry of Northern Development and Mines, the Northern Centre for Advanced Technology (NORCAT), the Sudbury Area Mining Supply and Service Association (SAMSSA), the Canadian Association of Mining Equipment and Services for Export (CAMESE) and the University of British Columbia’s Mining Engineering Department.

“If you go through the list, it’s heavily weighted to Sudbury,” acknowledged Svoboda. “It reflects where the bulk of the companies are that are active in the mining sector. Sudbury is the mining epicenter of Canada. It’s hard to ignore.”

The Centre conducted a study of the strengths, weaknesses, opportunities and threats perceived by mining supply companies based on a sample of 40 CAMESE members.

Strengths identified included technological innovation, the availability of qualified personnel, proximity to markets and alliances with mining companies. Weaknesses included a lack of government support, the absence of an industrial strategy and strong international competition. Respondents ranked the international market as the biggest opportunity and foreign competition as the biggest threat.

A follow-up survey of CAMESE members will focus on industry best practices “to identify what particular business practices enhance and encourage innovation and commercialization.”

The final piece of research planned for the Centre’s one-year mandate is a study focusing on how countries such as Sweden, Finland and Australia have succeeded in nurturing their mining supply companies.

“The biggest companies in the sector are multinational,” said Svoboda. “They’re companies like Atlas Copco and Sandvik with headquarters in Scandinavia, world-wide operations and thousands of employees.”

By contrast, Canada’s domestic mining supply industry is comprised of “a lot of smaller companies, the largest of which have a few hundred employees. They don’t have the economies of scale or the budgets to bring new technologies and services, and innovative products to market.

“The Scandinavians are an interesting example,” added Svoboda. “They’re a jurisdiction with some of the largest and most successful mining supply companies, yet their domestic market has long ago ceased to be of great importance. They didn’t have a choice. They either had to become world-class or die.”

Svoboda speculated that Canadian mining suppliers have been slow to enter export markets because “they haven’t needed to. Every company has to make that decision on its own, but if you’re going to be a world-class company, you’re going to have to look at export markets. The more aggressive companies are coming to that conclusion.”

Government representatives at meetings were receptive to the need for the public and private sectors to work together for a stronger mining supply sector, he added.

The mandate of the Centre concludes at the end of May, but may be extended if members see a need for additional research.

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