Competence. Innovation. Solutions in Mining.

Sudbury Mining Solutions

Commentary

Supply sector accounts for $5.6 billion in sales

A comprehensive survey of Northern Ontario mining supply and service companies supports earlier estimates that this sector is a significant wealth creator in Northern Ontario.SAMSSA joined forces with a number of supporting partners to examine the importance of the mining supply and service sector and especially its claim that this mining support cluster is one of the most concentrated in the world. The partners included the Sudbury Area Mining Supply and Service Association (SAMSSA), the Ontario Ministry of Northern Development, Mines and Forestry (MNDMF), Ontario North Economic Development Corp. (ONE DC) and FedNor (Industry Canada).The overall objective was to assess growth opportunities and outline a plan to realize them through concerted stakeholder action, both public and private.

Primary information for this analysis was complied by Doyletech Corporation over a five month period through interviews with 150 companies and three focus groups.Phase one of the study has been released and further discussions will take place as various sections of the 142-page report are reviewed and analyzed over the next few months.The preliminary results have a very high reliability factor and support our conviction that we have underestimated the value of this economic sector in Northern Ontario.The total value of mining supply and service sector output by 500 companies employing approximately 23,000 people in Northern Ontario is $5.6 billion. The approximate breakdown of sales and employment by the region’s four principal centres is as follows:

City

$ Output

Employees
Sudbury

3.94 B

13,800

North Bay

0.77 B

2,990

Timmins

0.59 B

4,600

Thunder Bay

0.35 B

1,610

TOTAL

$5.60 B

23,000

Based on recent reports, there are 10,000 direct mining and exploration jobs in Northern Ontario. This is an amazing result and confirmation that the mining supply and service sector in Northern Ontario is twice the employment size of mine operators, creating significant opportunities for skilled employment throughout the entire region. In 2008, Ontario mining revenue was $9.6 billion, which indicates the relative wealth creation at work in this industry.

Upon further analysis, we have estimated that at peak activity the mining supply and service sector provides approximately $1.38 billion in annual salaries excluding benefits. Even during the recession, most companies were operating at 75 per cent of capacity.

The study covers a wide range of detail and recommendations that emanated from the 150 face-to-face interviews with company executives.

One section contains the Northern Ontario Supply Block, which illustrates a variety of identifiable supply sectors. These include Mining Complete Solutions (feasibility, design/ build/develop/operate; Mining Machinery & Equipment (complete systems); Parts and Sub-Systems and Maintenance Repairs; Materials and Fabrication Services as well as public and private sector organizations and institutions.

Other facets of the study addressed current export status, current markets, sector planning for the future and options for strategic planning.

There is also a comprehensive analysis of international market preferences, including a lengthy analysis of the risks and rewards of working in these markets based on the best information available.

The results are in the process of being circulated to all participants and the partners are meeting to make a serious attempt at finding the best ideas for maintaining and growing this important sector in Northern Ontario.

This study reinforces the basic premise that the mining supply and service sector in Northern Ontario needs to be recognized and supported by all levels of government with ongoing programs and support as we move forward with new mining activities in the region. The verdict is in.

The mining supply and service sector is a key ingredient in creating high value employment opportunities in the
future.

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About Dick DeStefano

Dick DeStefano is Executive Director of SAMSSA [email protected]

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