Hey there, time traveller!
This article was published 19/11/2010 (4238 days ago), so information in it may no longer be current.
Mines Minister Dave Chomiak is heading to Toronto on Monday to talk to Vale SA officials about the mining giant's plan to wind down smelting and refining activities in Thompson over five years, moves that will cost the city 500 jobs. The trip will be a continuation of the frantic to-ing and fro-ing that Mr. Chomiak and Premier Greg Selinger have been engaged in since news broke Wednesday that Manitoba's third largest city was going to take a very hard economic hit.
It might be that the hand-wringing and dashing-about is simply what politicians always do in the face of bad news -- they must be seen to be "doing something," no matter how ineffectual. Or it might be what it seems to be, that the government was caught completely off guard by the news. And that raises the question that Opposition Leader Hugh McFadyen has raised: Has the government been asleep at the wheel?
It was, after all, only seven years ago that Inco Ltd., which was subsequently bought by Vale for $20 billion, threatened to shut down all operations in Thompson because the price of nickel had fallen so low that the Thompson operations were no longer viable. So it might have been expected that the government was keeping a close eye on Thompson, which has long been represented by Steve Ashton. The government, too, should have known that the smelter and refinery in Thompson were only viable because Vale was bringing ore in from Labrador, where Vale is building a $2.8-billion smelting and refining operation to service its massive nickel find at Voisey's Bay. In fact, as Mr. McFadyen points out, the Free Press reported five years ago that the Thompson smelter would shut down as soon as the new smelter was completed. And finally, the government should have been aware that Vale would soon run into the same problems that shut down the HudBay smelter in Flin Flon -- the economics of meeting modern emissions standards. Vale says it will cost $1 billion to upgrade operations in Thompson to meet federal sulphur dioxide requirements that come into effect in 2015.
And yet, no one seemed more surprised, more needy of direct talks with Vale to get to the bottom of what is happening, than Mr. Chomiak and Mr. Selinger.
What the minister knew or did not know, however, can be sorted out later. What is needed immediately is for Mr. Chomiak and the premier to make a realistic assessment of the prospects of saving the 500 jobs without throwing money at Vale. Simply put, if it will cost $1 billion to meet new environmental standards, that means saving 500 jobs will cost $2 million each.
It appears that a better expenditure of the $1 billion is the one Vale plans -- to sink it into new mining operations that will at least protect 1,000 of the 1,500 jobs Vale currently supplies. Vale also has said it will reduce manpower slowly over five years and attempt to do so through attrition.
That, of course, will not make the next five years any easier for Thompson, where, overnight, property values have been affected adversely, but it's enough time for the government to find new ways to replace old jobs. It's also, sadly, the same amount of time the government has had available to prepare for this eventuality, but instead got caught sleeping at the wheel.