After 30 years in the business, Ricky Lemieux, president of Rock-Tech, a Sudbury-based mining supplier, has learned that every downturn is followed by a period of strong growth.
It’s the nature of the business. Pessimists fearing things could get worse instead of better will cut staff and conserve cash in the hope of surviving. Optimists, however, see an economic downturn as an opportunity to invest and prepare for the next upcycle. That’s exactly what Lemieux and his partners are doing with the move to a new ultra-modern manufacturing facility in Sudbury’s Walden Industrial Park.
A soft market is an ideal time to develop infrastructure because of the time it takes. “You certainly don’t want to be doing it when times are good because you’re already pulling the hair out of your head,” said Lemieux.
Rock-Tech isn’t the only Northern Ontario mining supplier preparing for the next upcycle.
Industrial Fabrication, another Sudbury-based equipment manufacturer, has also moved into a new manufacturing facility, Carriere Industrial Supply, a Sudbury company specializing in wear solutions for buckets and truck bodies, has recently completed a major expansion, and Miller Technology of North Bay is manufacturing personnel carriers and utility vehicles in a state-of-the-art 50,000 square- foot plant in North Bay.
Other Northern Ontario mining suppliers with cutting-edge, world-class manufacturing facilities that will be well positioned for the next turnaround are B&D Manufacturing of Sudbury, specializing in super jacks and other maintenance equipment for haul trucks, and Di-Corp of North Bay, a manufacturer of drilling consumables.
Downturns affecting the exploration side of the business are less forgiving, but savvy companies like Premier Gold with attractive projects and strong balance sheets are able to continue exploration activity by taking advantage of lower drilling and other exploration costs.
Smart investors who have learned the same lesson as Ricky Lemieux about the cyclical nature of the business and the inevitability of a turnaround will be at this year’s PDAC looking for the best companies to invest in at today’s bargain basement share prices.
Mining companies are also preparing for a turnaround. Rubicon Minerals’ Phoenix Gold Project in Red Lake will be first out of the gate with plans to begin producing gold mid-year. New Gold starts construction on its Rainy River Project this month with plans to be in production in 2017 and Goldcorp’s acquisition of Probe Mines bodes well for the speedy development of the Borden Lake deposit in northeastern Ontario.
In Sudbury, KGHM is sinking a shaft at its Victoria Project, Sudbury Platinum is drilling Aer-Kidd and both Vale and Glencore are set to release feasibility studies for major new mine developments.
So it’s not all doom and gloom. Within each downturn are the seeds of the next upcycle.
