Although it wasn’t really that long ago that the mining industry was booming in Thompson – if you’ve lived here longer than 10 years, you experienced at least part of it – it might feel like it’s mostly been gloom and doom for a long time because, for the most part, it has.
The 2008 global recession, which was a bit delayed in arriving in Thompson, although eventually it did, was only first starting to be felt when Vale announced nine years ago this month that it had plans to shut down the smelter and refinery in Thompson for good. At the time that it was first announced, the proposed shutdown date was 2015, though that was later pushed back three years, with operations ceasing about midway through 2018. A bit more than a year before that, Birchtree Mine was placed on care and maintenance status, resulting in the loss of more than 100 jobs. By the end of last year, the Vale workforce in Thompson was down to 800 or so, about 600 of them unionized hourly jobs, approximately one-third less than it had been at the beginning of the year. Most of the news regarding mining and its associated jobs in Thompson throughout this decade has been decidedly negative.
Given that, it is understandable that a lot of buzz was generated when Vale Manitoba Operations head Gary Eyres told the Thompson Chamber of Commerce a couple of weeks ago that there was a plan – not a definite one as of yet, but a definite possibility – that could see the company spend $1 billion over the next five years deepening its existing mines here to access more high-quality nickel ore. Over an even longer term, the outlook could be brighter still, as an expected jump in the demand for nickel, an important component in lithium batteries used for everything from cell phones to electric vehicles might eventually make some sort of mining of the Birchtree and even Pipe Lake deposits economically feasible once again.
Mind you, Vale was sending some optimistic signals last year too, under a different boss, Alistair Ross, and so far the only thing that has happened is the plans have become a little more concrete. Much of what the company decides to do is dependent on the price of nickel in the global market getting high enough, and the expected boom in nickel demand won’t come until electric vehicles begin to get much more popular. That that will eventually happen seems to be almost a given among those whose job it is to make predictions of this sort, but the open question remains, when?
Internet and technology companies like Facebook, Google, Amazon and Apple are massive corporations worth billions of dollars now, but that success is part of the second wave of dotcom fortunes. The first one climbed to dizzying heights in the early years of this century before stock prices plummeted back down to zero and the virtual fortunes that had been made were lost. The investors who bet on those early internet stocks weren’t wrong. They were just too early. Likewise, predicting that the electric car boom is coming is easier than figuring out precisely when it’s going to start, or if it has already.
It isn’t easy to start a new mine, or expand an existing one, and it isn’t cheap either. To really take advantage of any coming boom in nickel demand and prices requires taking a gamble whose payoff is at least a few years down the road. Vale could decide to take that gamble now, or wait until the risk is lower. If electric vehicles powered by lithium batteries are the way of the future, the rewards from being properly positioned could be very lucrative and possibly last a long time, depending on what other new technologies and power sources are developed. Good times could definitely be coming for Thompson again. The operative questions in this scenario are when and for how long?