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Sudbury Mining Solutions

Commentary

Something to cheer about

September 1, 2009
by Norm Tollinsky
In: Commentary, Norm Tollinsky with 0 Comments

Reading this issue of Sudbury Mining Solutions Journal, you’d hardly know the city is in the grip of a strike by 3,100 employees of Vale Inco. Strikes are tough on the community and particularly on suppliers dependent on the city’s major employer, but there are still a lot of good news stories out there, as readers of this issue will readily observe.

Foremost among them is the ramping up of Nickel Rim South, the new centerpiece of Xstrata Nickel’s presence in the Sudbury Basin. This state-of-the-art $940 million capital project had its origins in a drill hole that intersected 80 metres of copper, nickel and precious metal mineralization in 2001 when nickel was selling for approximately $3 a pound. No one could have predicted that nickel would shoot up to $24 in 2007 and then plummet to $4 by late 2008. It was the same story for copper, which sold for less than a dollar a pound in 2001, and $4 by 2006.

Predicting metal prices is a mug’s game and always has been. You have to take the long view, ignore the short-term market gyrations and hope for the best, as gut wrenching as that might be. Fortunately, the grades at Nickel Rim South are such that the mine will be profitable within a wide price range.

The development of Nickel Rim South 126 years after the initial discovery of nickel in the Sudbury Basin is a testament to the wealth of the region and its stature as one of the world’s greatest mining camps. The fact that the project is on schedule and on budget is an incredible accomplishment, considering the human resource and procurement challenges the project team faced at the height of the market. Equally noteworthy is Nickel Rim’s stellar safety record of 5.5 years without a lost time injury.

The Hatch-McIntosh alliance and the talented Nickel Rim South project team have done a remarkable job, and are to be commended for the success they have achieved. Would things have gone as smoothly in Mongolia, the Congo or New Caledonia? Not likely. The success of the Nickel Rim South project is also attributable to the wealth of mining expertise and the concentration of mining suppliers in the Sudbury-North Bay-Timmins triangle. There is no better place in the world to develop a mine.

Readers of this issue will also note that Vale Inco is busy bringing Totten Mine into production despite a summer shutdown and the current strike. One can dwell on the effects of the contract dispute, the shutdowns, layoffs and project postponements, but only at the risk of overlooking the positives. The strike will end, metal prices are already rebounding and plans for several more new mines and capital projects will be dusted off before too long.
In the meantime, we applaud mining suppliers like RDH Mining Equipment for its bite of the Big Apple and NORCAT for going even farther afield in search of business opportunities.

We take pride in promoting the expertise of the region’s suppliers to the thousands of Sudbury Mining Solutions Journal subscribers around the world. The value and importance of extending the global reach of the Sudbury area mining cluster is brought into even sharper focus when market forces and strike action conspire to dry up business locally.

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