It was the best of times, it was the worst of times, if I may borrow from Charles Dickens.
On Aug. 24, 2006 , the spot nickel price hit its all time high
ever, at $15.76 (US) per pound. Last Friday it was just a tad
under that record at $15.65.
Inco's third quarter net earnings of $701 million-the Ontario
operations contributed $US356 million to that figure-were the
highest ever quarterly profits in the company's 104-year
history. The 2005 third quarter net earnings were
$64-million.
And to add the cherry on the cake, the company officially
opened its $115-million Fluid Bed Roaster Dioxide Emission
Reduction plant in Copper Cliff that will further reduce SO2
pollution from the Sudbury operations by 34 percent to just 175
kilotonnes a year. This is about a 90 percent reduction from
the 2,000 kilotonnes a year the company used to emit in
1970.
However, the drama and trauma of the past year's "nickel wars"
have finally come to an end in a way we didn't expect.
As of midnight Oct. 23, "Mother Inco" will have finally been
taken over by the "boys from Brazil," CVRD the giant iron ore
producer. The takeover brings mixed emotions and a general fear
of the unknown for many of us, including this columnist.
In an e-mail response, United Steelworkers of America President
Leo Gerard aptly said, "Canada is loosing the ability to
influence the nation's industrial policy and economic
development by letting its resource base fall under foreign
control."
Industry Canada Minister Maxime Bernier did a great disservice
to the people of the Sudbury Basin.
He rubber-stamped the foreign takeover of a trillion-dollar
deposit - at present metal prices - that will still be in
production a century from now without extracting any real
significant concessions for Sudbury, the historic heart and
soul of the global nickel business.
Let's remind the minister that the Sudbury Basin is still the
richest mining district in North America and among the 10 most
significant globally.
And the Basin is located in one of the most politically stable
countries in the world,  a major issue for any corporation
thinking of investing billions of dollars in new
production.
Although Bernier will "crow" about a "no-layoffs for three
years policy and other net benefits he supposedly extracted for
the country." Next year, roughly one quarter of Inco's Sudbury
workforce is eligible to retire. Labour shortages are plaguing
the entire mining sector world-wide.
In addition, the World Bureau of Metal Statistics estimates
there is a 70,000 ton deficit in refined nickel for the first
eight months of this year.
Steve Barnett, president of the Nickel Institute recently
warned, "the nickel supply gap could extend over the next
decade" due to China's expansion of its stainless steel
production. Combine this with that country's enormous
urbanization and industrialization efforts, unprecedented in
human history, and Sudbury will see a generation or more of
prosperity and significant contributions to CVRD's financial
profits.
Further commitments to increase exploration in the Canadian
operations and accelerating development in Newfoundland will
benefit the company as much if not more than those
communities.
In addition, suggesting CVRD is committed to using local
supplier,  another factor in allowing the takeover, is a
"no-brainer." Sudbury's world-class mining supply and services
sector is exporting its products and expertise around the
world.
The Phelps Dodge boys were so impressed with Sudbury supply and
services expertise that they are still going to use them
regardless of the failed takeover attempt.
Foreign trade delegates from Chile, China, South Africa, just
to name a few countries, routinely come to Sudbury to forge
links with the community's mining expertise and post-secondary
institutes.
I am not trying to paint CVRD in a negative light. As far as I
am concerned, both the company and the community are starting
off with a clean slate.
Fears about CVRD not respecting union contracts, pensions and
environmental issues are groundless. CVRD is a global mining
giant. The Inco takeover will make it the second largest miner
after BHP Billiton and the world's biggest producer of nickel,
The company knows how to operate under the rules and
regulations of foreign countries.
Some pundits still lament and say "better the devil you know!"
However, let's remember that up until the mid-1970s, we cursed
that "devil" for being an arrogant, American-controlled
foreigner and an environmental monster with horrible labour
relations.
From the late 1970s to the late 1990s, we cursed that company
for the devastating layoffs and again, the terrible labour
relations even though, by that time, the corporate identity was
thoroughly Canadian.
In addition, the fact that much of Alberta's oil industry is
foreign-owned has had no detrimental affect on the enormous
prosperity Alberta gets from its oil.
I have often said that the Sudbury Basin is Ontario's metallic
equivalent to the tar sands.
It just seems that all the net benefits to Canada would have
had to happen anyways. Even locating CVRD's nickel division in
Toronto makes business sense as most of the current nickel
operations and expertise are located in this country.
The relocation of Inco's Sheridan Park technology centre to
Sudbury would have been the only issue that would entail costs
that no company can justify to its shareholders if it were to
do the move voluntarily.
This is where our federal government should have stepped in and
extracted a significant concession for the privilege of owning
a key natural resource and further Sudbury's global reputation
as a centre of excellence in mining research.
They dropped the ball!
Last Monday, Toronto Star business journalist Lisa Wright in an
article titled, "Iconic Inco rides off into the sunset" wrote
"…the deal will be done and Inco the icon will start to fade in
the history books."
For the rest of the country she is probably right. But here in
the Sudbury Basin, for the community and generations of
workers, our roots are so tangled with that company that it
will be at least a generation before we finally let go.
Goodby Inco and a gracious welcome to - bem-vindos - Sudbury
for CVRD and CEO Roger Agnelli.
Stan Sudol is a Toronto-based communications consultant and policy analyst who writes extensively on mining issues.[email protected].