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Ontario suppliers target Saskatchewan

December 1, 2011
by Norm Tollinsky
In: News with 0 Comments

It started out as a so-called oil sands consortium focusing on Alberta. Now, it’s all about potash and Saskatchewan, one Canadian province to the east. Call it what you will, it’s paying big dividends for the 20 Northern Ontario mining supply and service companies that have joined forces to take advantage of Western Canada’s booming resource sector.An initiative of the Ontario North Economic Development Corporation (ONEDC), an offshoot of the economic development agencies of the region’s five major cities, the consortium has already generated $6.5 million in sales and has outstanding bids worth another $30 million, said ONEDC chair Rick Evans of North Bay.The consortium is backed by $1 million in funding from the province of Ontario’s Northern Ontario Heritage Fund Corporation and employs an in-market consultant in Saskatoon, Lester Cey of LTC Consulting, to open doors and make connections.“It has been a great experience for us,” said Evans. “We initially thought that Alberta would be our target, but the Saskatchewan market makes a lot more sense for us. We’re really happy about the results our companies have been getting and there has been good representation from each of the cities participating.”

According to the Saskatchewan Mining Association, upwards of $43 billion will be invested in the province’s mining industry between 2008 and 2028. Included in the total are expansions of existing mines by Potash Corporation of Canada, Mosaic and Agrium Inc.

Potash Corporation of Canada is spending approximately $3 billion at its Rocanville operation to increase production to approximately 5.7 million tonnes annually. The project includes a new production shaft, underground and surface development, a new mill and a 500,000-tonne storage warehouse, which will be one of one of the largest buildings in the world. Construction is scheduled for completion in 2014.

At Esterhazy, 55 kilometres southeast of Rocanville, Mosaic is sinking two 20-foot diameter shafts to a depth of 3,700 feet. The company’s new K3 complex will boast one of the tallest headframes in the world and include Koepe hoists capable of skipping 60 tons of payload to surface. The $1.5 billion project is scheduled for completion in 2016 and will increase annual production capacity to 6.45 million tonnes per year.

At Vanscoy, 30 kilometres southwest of Saskatoon, Agrium’s VAULT project will add 750,000 tonnes of annual potash capacity, resulting in a 40 per cent increase in production by 2015. The $800 million project is targeted for completion in 2014.

In addition to these expansions of existing operations, Saskatchewan is also experiencing a boom in new mine development, led by BHP Billiton’s Jansen project 80 kilometres northwest of Regina. Jansen will produce eight million tonnes of potash annually following project completion in 2015 and will be the first new mine to be developed in Saskatchewan in 40 years.

“And they’re not stopping with the Jansen project,” said Cey.

Other miners, including Vale and K+S Potash Canada, a subsidiary of the German-based K+S Group, are also planning to join the Saskatchewan potash party.

“We don’t have all of the expertise that’s necessary to do all the projects,” said Cey. “We haven’t had a lot of mine development activity since the 60s. Northern Ontario not only has the capacity. It also has the expertise. Simply put, my job here is to take that expertise from Ontario, talk it up and (in some cases) find suppliers interested in doing partnerships.”

Fourteen of the 20 companies in the consortium signed up to attend the CIM’s MEMO Maintenance Engineering and Mine Operators conference in Saskatoon, November 6 to 9.

Membership in the consortium is limited to 20, but companies come and go as their strategies and needs change, according to Evans.

Cey focuses on representing the 20 members of the consortium, but he can also steer business to other suppliers in Northern Ontario if there is no conflict.

“If I see potential synergy between a Northern Ontario company and somebody local, I’ll get in with both feet and help them be successful,” he said.

The 20 companies include Wabi Iron & Steel of New Liskeard, Stainless Steel Technology and Bestech of Sudbury, Minesteel Fabricators of North Bay and Rector Machine Works of Sault Ste. Marie.

A full list of the consortium members is available on LTC Consulting’s website: www.lpcconsulting.ca

 

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