Throughout 2017, news about Vale’s cutbacks in Thompson has been on the minds of many local residents, especially after their Birchtree facility was put on care and maintenance back in October.
In an attempt to quell concerns about where the company is headed, Mark Scott, the vice-president of Vale’s Manitoba Operations, attended the Dec. 13 Thompson Chamber of Commerce meeting to provide an overview of the challenges the company will be facing in the new year.
Throughout his presentation, Scott made no bones about the continued work force reductions that will be coming to Vale at the end of 2017 and once the smelter and refinery closes down in the third quarter of 2018.
“We’re going to go from 1,300 [workers] right now to 1,180 on Jan. 1,” he said. “And by the end of next year we’ll be at 807 with about a 30 person reclamation crew, so it will be 837, total, by the end of 2018.”
However, Scott was adamant about how the company is taking steps to cushion the blow as much as possible. Outside of adding a concrete load-out facility to the existing mill building, they also initiated a 20 per cent “breakthrough challenge” to help cut down on costs.
“We’ve laid down the gauntlet for ourselves for the next nine months or so and we’ve challenged ourselves to come up with another 20 per cent improvement in our unit costs,” he said. “So that can be a combination of spending reductions or productivity in production or total output improvements.”
Unfortunately, the Vale VP mentioned that this challenge comes with an urgent time limit attached to it, since they usually determine their budget for the following year during the summer.
“So by next July we definitely need to be showing positive momentum in this direction to put that best foot forward in next year’s annual planning process.”
While the people in charge of Vale are determined to take control of their own destiny, Scott maintains there are some factors they simply can’t control, such as less-than-desirable nickel prices, increased hydro rates, and what he describes as unfair taxation policies.
“Ontario and Saskatchewan have a flat 10 per cent mining tax, where Manitoba’s goes from 10 to 15 to 17 per cent and this is a real challenge when you’re looking at multi-generational financial models where those numbers add up,” said Scott. “So when we’re competing for capital with even … our own cousins within our own organization, the playfield just isn’t level.”
In order to tweak these variables in their favour, Scott asked the Chambers members in attendance to use their influence and connections in the local and provincial government to lobby on their behalf.
“We hope that local and regional provincial stakeholders will come together to help us in that effort to keep mining in Manitoba and keep mining in Thompson, more specifically.”
The Dec. 13 meeting wrapped up with some comments from various chamber members, some of whom talked extensively about Vale’s positive contributions to the community throughout the years.
Piggy-backing off Scott’s comments about how Vale has invested over $1.4 billion in Thompson in the last 10 years, Volker Beckmann recalls how the company provided him with a $20,000 donation to help get his local non-profit organization, Spirit Way, off the ground back in 2004.
Chamber president Rajinder Thethy officially closed out the meeting by telling Scott that they will try to lobby for these changes through their contacts in the Manitoba Chamber of Commerce.
“You are one of our members, so we will do whatever it means for us to move the issues forward,” said Thethy.
The first Thompson Chamber of Commerce meeting of 2018 is set to take place Jan. 10 at the Meridian Hotel.