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Been there, done that

The City of Elliot Lake, a community of 11,500 people 160 kilometres west of Sudbury, used to be the quintessential single-industry town.
Been there, done that

The City of Elliot Lake, a community of 11,500 people 160 kilometres west of Sudbury, used to be the quintessential single-industry town.

With a large proportion of the population working for the uranium mines, residents weathered several boom and bust cycles before the last mine shut down in 1996.

When it seemed like all was lost, municipal leaders started luring retirees from across the province to buy the cheap and abundant homes in the city.

Now, Pele Mountain Resources, a Toronto-based junior mining company, is conducting a drilling program to determine the feasibility of once again tapping the city’s still plentiful uranium reserves.

Community leaders say any new industry in the town would be a welcome bonus, but they're not sure if it’s for real.

Former Elliot Lake Mayor George Farkouh has spent most of his life in the community. A former Palestinian refugee, he came to Elliot Lake in 1959 at age 12 with his family.

Farkouh was elected mayor of Elliot Lake in 1989 just before the uranium mines closed. He stepped down from the mayor's post last year and now concentrates on running a car dealership.

If Pele Mountain is serious about Elliot Lake and a mine is deemed to be feasible, he says he’d be in favour of it.
On the other hand, he worries that all the buzz will have an impact on Elliot Lake’s low housing prices, which the city has depended on to attract retirees.

Even though house prices have gone up in Elliot Lake, just as they have across Ontario, the average home still costs just $60,000.

“Are we just in the stages of a speculative frenzy? If that's what it is, it could be very dangerous for the community,” Farkouh said.

“It will drive up real estate values, which will in turn dampen the progress we have made in our main industry, which is retirement and four seasons recreation.”

Besides, he's not convinced Pele Mountain will ever manage to develop a mine in Elliot Lake. It will probably take about $2 billion and 10 years to do the necessary environmental assessments and develop a mine, he said.

Even if uranium prices remain high for that long (since 2003, the spot price for uranium has risen from $10 US per pound to $130 US per pound), the uranium reserves in Elliot Lake are low grade, he said.

Just one and half pounds of uranium are recovered for every tonne of ore dug out of the ground, making production costs more expensive, said Farkouh. It will cost Pele Mountain $150 to process each tonne of ore, he said.

“At the same time, you have to recover your initial investment. It gives you a reality check that it's a very long shot.”

Elliot Lake was established in 1955 after the discovery of uranium in the area. Denison Mines and Rio Algom were the principal mining companies.

In the late 1950s, the community experienced its first period of hard times when the price of uranium dropped.

The country's prime minister at the time, Lester B. Pearson, was also the Member of Parliament for Elliot Lake. He arranged for the government to buy uranium from the Elliot Lake mines for $6 a pound, a move that rescued the community.

In the 1970s, a worldwide rise in oil prices led to a renewed interest in nuclear power. It was boom time for Elliot Lake and the population rose to an all-time high of 26,000.

But uranium prices eventually began to sink again, and in January 1990, Farkouh received a visit from Denison and Rio Algom executives.

They told him all of the mines were going to be shut down over the next few years. The last mine in Elliot Lake, Rio Algom's Stanleigh Mine, closed in 1996.

“It was a shock. It was surreal,” said Farkouh.

In 1990, the population of Elliot Lake stood at 16,000. About 4,500 residents worked for the mines. Thousands more worked for mining supply companies and other businesses dependent on the mining industry.

Residents started leaving the community in droves to find employment elsewhere.

The mayor decided to focus his efforts on attracting retirees to the community. They didn't need jobs because they were in receipt of pensions, but they would contribute greatly to Elliot Lake's economy.

Farkouh was really picking up on an idea that had already been tried with some success in the city.

When Elliot Lake's economy was booming, Denison and Rio Algom built more houses for employees than they needed. In the late 1980s, the mining companies started selling off these homes to retirees.

When the mines closed, Elliot Lake municipal council applied for and received a $3 million provincial grant to form a non-profit corporation called Elliot Lake Retirement Living.

The corporation, which is run separately from the city, bought 1,500 homes that would have otherwise been torn down and began marketing them to retirees. The buyers have come from across Ontario and are in their late 50s or early 60s.

Farkouh calls the drive to attract retirees to the city “a tremendous success.” The city's economy has rebounded remarkably, he said.

Nine thousand of Elliot Lake's 11,500 residents have moved to the city since the mines closed, partially making up for those who left.

The city has also recently embarked on a drive to attract cottagers to Elliot Lake.

Lake Shore Properties was formed in 2001 following the passage of a private member's bill that allowed the city to acquire, market and sell Crown land as cottage lots. Of the 400 cottage lots available, 208 have already been sold.
Rick Hamilton won the mayor's seat after Farkouh retired from the job last fall. He's taking a wait-and-see approach to the possibility of a new uranium mine in the community.

“Mining is probably as big a gamble as going to a local casino. You really don't know until such time as all the stars line up,” he said.

“I wish them (Pele Mountain) well. I hope they can make the business case and at least move forward with some preliminary plans.”

He says any new economic development would be good for the community, but he warns there will be a housing shortage if a mine is built and thousands of workers start moving to the city.

Like Farkouh, he's also concerned about housing prices skyrocketing as a result of speculation.

Hamilton came to Elliot Lake in 1979 to work as a welder for Denison Mines. He was representing injured workers for the United Steelworkers of America in the early 1990s when the mines started closing.

He's now employed in the city by the Office of the Worker Adviser, a division of the Ontario Ministry of Labour.

“It was pretty devastating (when the mines closed), no doubt about that. There was a lot of family turmoil,” he said. “It would be akin to Inco and Falconbridge shutting down in Sudbury at the same time.”

The president of the Elliot Lake Chamber of Commerce, Peter Seidel, said the business community is also in support of a resumption of mining in Elliot Lake as long as it’s done with respect for the environment.

Seidel, who owns a furniture store in the city, has had to re-invent himself several times over the years as Elliot Lake's economy has changed.

When the mines were still open, he ran a motor repair company that served Denison and Rio Algom.

“I wish Pele Mountain all the best. They've identified some reserves, and they think there's a possibility of a mine coming here,” he said. “But there are huge hurdles to overcome.”