After less than 14 months on the job, Brian Maynard, who was the most senior Vale Inco executive in Thompson, is moving elsewhere in Vale as the position of president of Manitoba Operations has been abolished by the Brazilian mining giant in a major corporate nickel restructuring announced July 10.
The company in Canada and the United Kingdom will be run on a day-to-day basis now by three vice-presidents, all of whom will be based in Sudbury, rather than by operation heads in Manitoba, Newfoundland and Sudbury. The elimination of the regional presidents means more senior management decisions will be made in Sudbury, rather than in Manitoba and Newfoundland, while top management decisions will continue to be made by parent company Vale, also known by its full name of Companhia Vale do Rio Doce, in Rio de Janeiro.
"Brian Maynard, the former president of Manitoba Operations, has been offered a senior position in the broader Vale organization," said David Markham, manager of public and government affairs for Vale Inco in Thompson. "Brian Maynard's new role with the Vale organization has not been finalized at this time - all we can say for now is that he's been offered a senior position within the Vale organization. Once this has been determined, we will be in a position to make this information public."?Maynard's predecessor as president of Manitoba Operations was Michel (Mike) Sylvestre, whose tenure was also less than two years. Before coming to Thompson in July 2006, Sylvestre sent four years for Inco with its PT International Nickel Indonesia Tbk open cast mining operation in the Indonesian island province of Sulawesi, an hour's flight north of Bali, during his first overseas posting.
On June 1, 2008, Sylvestre was named president of the Goro Nickel mining project in the South Pacific on the southern tip of Grand Terre, the main island in New Caledonia, an overseas territory of France, east of Australia. Vale Inco holds a 69 percent interest in the Goro project.
The three provinces of New Caledonia hold a 10 percent equity interest in the project, through their holding company Société de Participation Minière du Sud Calédonien (SPMSC) ensuring that the people of New Caledonia participate in and directly benefit from Goro Nickel. Through a jointly owned company called Sumic Nickel Netherlands, Japan's Sumitomo Metal Mining Co. Ltd. and Mitsui Co. Ltd. own the remaining 21 per cent interest in the project.
Sudbury is to become Vale Inco's centre of operations in Canada and the United Kingdom in the restructuring move that resulted in cutting 140 white-collar positions worldwide.
At the moment, however, Sudbury is in the midst of a strike that started 10 days ago after about 3,100 USW Local 6500 members in Sudbury voted 85 per cent in favour of strike action. The strike comes near the end of what was to be a scheduled two-month production shut down - from June 1 to July 27 - at all Vale Inco operations in the Sudbury Basin.
In the late 1970s, the Steelworkers waged a lengthy nine-month strike against Inco in Sudbury from Sept. 15, 1978 until June 7, 1979.
United Steelworkers Local 6200 at Vale Inco in Port Colborne, Ont. is also on strike in the current dispute after workers there voted about 95 per cent in favour strike action beginning July 13. Local 6200 has about 115 members in Port Colborne. About 450 Steelworkers at Vale Inco's Voisey's Bay nickel operation in Labrador are set to go on strike Aug. 1 following their a near-unanimous rejection of the company's most recent contract offer.
The major issues of contention in both Ontario and Newfoundland and Labrador surround company-proposed changes to the nickel price bonus and a proposal for new hires to be put in a contribution-based pension benefit plan, which would result in two-tiered pensions.
The striking workers in Sudbury and Port Colborne receive $200 per week from the Steelworkers in strike pay.
The Sudbury Vale Inco mines, along with Voisey's Bay, produce more than six per cent of the world's nickel supply.
Under the contract that just expired for Local 6500 in Sudbury and Local 6200 in Port Colborne, the triggering mechanism for the nickel price bonus is tied to Vale Inco's profitability at the operation, providing nickel is trading above $2.25 per pound. The company has not paid nickel bonuses in 2009, claiming operations in Canada have not been profitable. The average hourly wage in Sudbury is $29 per hour, the Steelworkers say.
The old nickel price bonus did not have a maximum limit. With the proposed contract, the trigger would have more than doubled to $5 per pound, and there would be a limit on money earned through the nickel price bonus, capping at 75 percent of a total possible 20 per cent bonus of worker's hourly wages. The other 25 per cent of the possible maximum 20 per cent bonus would be made up by an Annual Incentive Plan, which would be measured by how profitable Vale Inco is at the time. "In comparing what has been paid on past years, the new formula would have paid members 42 per cent less," the USW calculates.
The 1,250 United Steelworkers Local 6166 workers here in Thompson, however, inked a new three-year collective agreement with Vale Inco last Sept. 15 - the very day Wall Street investment bank Lehman Brothers collapsed and the current economic global meltdown got under way in earnest. The tentative deal had been reached three days earlier on Sept. 12. Workers voted 65.5 per cent in favour of the contract, which included wage increases in each year of the agreement consistent with their last contract, and pension improvements.
Mike MacFarlane is now vice-president of mining and milling across Canada and the United Kingdom. MacFarlane is based in Sudbury and had been vice-president of mines for Ontario operations.
Steve Wood, a Sudbury native who recently worked with PT Inco in Indonesia, is now the vice-president of smelting and refining.
John Pollesel, who was named interim president of Ontario Operations after Fred Stanford, who served 2 1/2 years as president of Vale Inco's Ontario Operations retired last month, is now vice-president of production services and support for Canada and the United Kingdom.
Pollesel is in charge of everything that supports the production process, including divisional shops, engineering, energy management and the power department. Pollesel continues with general management responsibilities for Ontario operations. Tito Martins, a former Vale communications executive who is Vale Inco's president and chief executive officer, will continue managing Canadian assets.
Companhia Vale do Rio Doce appointed Martins as president and CEO of its Vale Inco nickel subsidiary in December 2008. Martins replaced Murilo Ferreira who retained his position as nonferrous minerals executive director. Martins, who has worked for Vale since 1985, was previously executive director for corporate affairs and energy.
Besides Stanford's retirement, there have been a string of prominent executives who have recently left Vale Inco, including chief operating officer Parviz Farsangi, who has left the company. Farsangi, a former executive of the Falconbridge Ltd., was hired as Vale Inco's chief operating officer in September 2007. Senior management in Canada has been both restructured and reduced.
Cory McPhee, director of corporate public affairs at Vale Inco corporate Canadian headquarters in Toronto, passed on e-mail questions from the Thompson Citizen to Markham, but was reported by other media to have said the management changes are about improving efficiency by basing the company's structure on function - not geography.
"Rather than look at a very decentralized, silo approach of having separate (nickel) operations in Thompson, Sudbury, St. John's (Voisey's Bay) ... we're looking at having more integrated Canadian and U.K. operations that looks at the entire flow sheet as a single mining, milling, smelting and refining unit," said McPhee.
The managerial restructuring at Vale Inco has been ongoing for the past eight months.
Thompson native Lovro Paulic, who has served as the general manager of Vale Inco's Manitoba-based Mill, Smelter and Refinery Operations since 2006, "has now been assigned additional general management responsibilities effective July 13, 2009," Markham, said.
Tom Paddon will assume general management responsibilities for Newfoundland and Labrador.
"In the latter capacity," Paulic "will work with Vale Inco's other Manitoba-based senior leaders to deliver a quality nickel product in a safe and efficient manner, while working with all stakeholders to maintain a long-term viable business," Markham said. "Paulic is a lifelong resident of Thompson, and holds a Bachelor of Science (mechanical engineering) degree from The University of Manitoba," said Markham. "He will continue to be based in Thompson."
Paulic has been active in local minor lacrosse circles for years, including with the Thompson Lacrosse Association since 2002. The Manitoba Lacrosse Association named him a coach of the year in 2006. Paulic also represented Vale Inco on the large ad hoc volunteer committee that toiled to make Phase 2 of the recently renovated C.A. Nesbitt Arena, the major component of the Thompson Regional Community Centre, a reality.
Paulic attended Deerwood Elementary School and graduated from R.D. Parker Collegiate in 1983. He attended the University of North Dakota from 1983 to 1985 and the University of Manitoba from 1985 to 1989.
While at the U of M, Paulic played for the Bisons hockey team during the 1985-86 season. He played 20 games for the Bisons that season and scored no goals but had five assists and 85 penalty minutes - the third highest penalty total on the team that year.
Paulic is also a product of the Thompson minor hockey system having played Junior A hockey with the Thompson King Miners and intermediate hockey with the Thompson Hawks.He also played lacrosse in Thompson, played for the Manitoba Team at the Canada Summer Games in 1981, and coached the Manitoba Games team in 1985. He is still involved in coaching both hockey and lacrosse.Paulic joined Inco Limited in 1989. Peter Paulic, vice president of operations for Smook Brothers (Thompson) Ltd., is his brother.
As of July 14, no other Vale Inco staff in Manitoba, aside from Maynard and Paulic, the two most senior local executives, "have been affected by the restructuring that was announced by Vale Inco CEO and president Tito Martins on July 10," Markham said.
Vale Inco lost $102 million at Manitoba Operations in Thompson during the last half of 2008 - $62 million in the fourth quarter on top of $40 million in the third quarter.
On March 3, Companhia Vale do Rio Doce of Rio de Janeiro eliminated 900 jobs from its global workforce of 14,000, with 423 of them coming from its Canadian subsidiary Vale Inco. The company cut 24 management and other non-union staff jobs here in March. The reductions were focused on corporate, management and business-support functions, but some front-line supervisors were also included, the company said.
Vale is the world's second-biggest nickel producer. Thompson Mine produces nickel, copper, cobalt and has associated gold, silver, platinum, sulphur, selenium and palladium deposits. Thompson has a 15,000-ton per day capacity mill; a smelter, which produces 1,400 anodes per day; and a refinery, which produces more than 130 million pounds of 99.9 per cent pure electrolytic nickel annually.
Vale Inco miners in Thompson make a straight time average wage of between about $27 and $31 per hour for average annual regular earnings of between about $56,160 and $64,480 before overtime or bonuses. While no nickel bonus was paid in Thompson for the third or fourth quarters of 2008, many production workers were still working significant amounts of overtime last year.
In addition to the approximately 1,250 United Steelworkers Local 6166 workers here at Vale Inco, there are also about 425 additional non-unionized staff for a total workforce of about 1,675.
There are approximately 600 USW Local 6166 members working underground at Vale Inco's Manitoba mining operations, and another 500 employed in surface plant operations, Markham said.
Nickel prices have fallen about 71.1 per cent over the last two years, from a high of $25.51 per pound on the London Metal Exchange (LME) in May 2007, to $7.36 per pound Monday. Still, that is a significant recovery from the fourth quarter of 2008 and first quarter of 2009. Last December, nickel briefly dipped below $4 per pound and was $4.31 per pound as recently as March 9. Commodities market analysts say demand for stainless steel, which accounts for about two-thirds of nickel consumption, remains weak, but the strike at Vale Inco will reduce inventories and could push up the price of nickel to around $8 per pound in the near term.
Vale Inco, however, had little difficulty, despite the tough international market, selling its high-quality 2009 production run of special electroplating Thompson nickel that is 99 percent pure. Nickel electroplating is the electrochemical deposition of nickel onto a substrate material to enhance its properties or surface finish.
Most nickel is combined with other metals to form alloys. As a transition metal, Vale Inco says, it combines readily with other metals, especially iron, chromium and copper, to produce alloys with particular combinations of properties that cannot be achieved by pure metals. Alloys of nickel, chromium and other metals have been developed for very-high-temperature strength and corrosion resistance in jet engines.
Vale Inco's Thompson sulphide deposit ore reserves mining operations are also believed to have some of the lowest nickel lifting costs in the world, a combination that has made it one of the last of the company's facilities not to see production cutbacks in the face of weaker nickel prices. Nickel profitable at only $5 per pound in Sudbury may be profitable from Thompson at $3 to $4 per pound.
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