Page 87 ® RICHW OOD Pr o v en S olutions . Exper t A d vice . Rely on C on tain bulk ma t erials , seal dust and pr ot ec t the c on v ey or belt in y our load z ones with R ich w ood Ma t erial C on tainmen t S yst ems . B uilt with the dependable impac t pr ot ec tion of R ich w ood Impac t S addles® , easy t o use C ombi- C lamp® Sk ir t C lamps and Rock F le x® pr emium sk ir ting r ubber , R ich w ood ’ s ma t erial c on tainmen t syst em mak es load z ones w orr y fr ee . R ich w ood helps y ou put the f oc us back wher e it belongs , on pr oduc tivit y! Rely on R ich w ood f or dependable load z one solutions , c all f or assistanc e with y our applic a tion1.800.237.6951. I ncr eased pr oduc tivit y w w w .r ich w ood .c om inf o@r ich w ood .c om phone: (304)525-5436 P r ot ec t ed L oad Z ones Page 86 be a reasonable price considering that a decade ago nickel sold for $2 to $3 a pound. However , Strong explained that the costs to produce a pound of nickel have risen substantially from what they were a decade ago. Some of the factors driving produc - tion costs up include a 350% increase in the price of crude oil and a 60% increase in the value of the Canadian dollar which is detrimental to compa - nies like V ale that export their nickel. There has also been a 25% increase in the cost of livi ng as measure d by the consumer price index. In addit ion to rising operation al costs V ale also faces increased capital costs as it moves to modernize its aging Sudbury facilit ies some of which are nearing 100 years old. Compounding the problem of ris - ing costs is the fact that the days of mining “easy ore” are over . V ale now mines deeper and deeper to fnd new sources which invariably turn out to be lower grade ores. Global Competition from Lower Cost Sources “These challenges are signifcant,” Strong said. “But we are also fac - ing challenges from the competitive global landscape - no longer are we simply concerned with the competi - tor on the other side of town, but also with the competitor on the other side of the world.” Strong also indicated that the mar - keting landsca pe has changed . In the base metals business costly mature sulphide deposits like those in Sud - bury are now competing with lower - cost-near surface laterite deposits in China. “As we speak, Chinese nickel pro - duction is at an all time high, as it de - velops newer and cheaper products,” Strong explained The increasing cost of producing nickel has also resulted in customers seeking out lower cost alternatives like nickel pig iron - a low grade fer - ronickel invented in China as a less expensive option to pure nickel in stainless steel production. At home Strong points to increased costs from environmental guidelines, regulations and restrictions that are becoming more demanding. “In a mature operation like ours, that means adapting 21st century tech - nologies to 20th century processing plants,” Strong said. “The solutions aren’ t easy - they require creativity and signifcant investments, but they are absolutely necessary to stay in business.” The changes required for V ale to ad - just have already begun with the re - fnement of V ale Inco’ s vision which has evolved from being the lar gest nickel producer in the world to be - coming the best nickel producer . T o do so V ale is taking a close look at operations that are no longer proft - able in Sudbury and around the world. Last year V ale decided to suspend op - erations at their Frood Mine which is part of the Stobie Mine complex. There has also been a signifcant re - structuring of V ale’ s or ganization. The North American structure has been eliminate d in favour of a more focused regional structure within V ale’ s corporate offce and Ontario operations “Our key principle in moving for - ward and making decisions has been to minim ize impacts on our people as best we can,” Strong said. “Unfortu - nately this has meant a reduction in some roles, particularly in support service functions globally and in Sud - bury .” 80% of V ale Operational Spend- ing W ent to Ontario V endors However many of the positions lost with the restructuring will return in some form through purchasing and procurement. In 2012, more than 80% of V ale’ s total spend on operations went to vendors located in Ontario -- a signifcant economic beneft to Sudbury and the rest of the province. During the period 2009 to 2012 V ale spent $2.6 billi on on supplies and ser - vices from local vendors in Greater Sudbury with almost $1billion. T otten Mine Symbol of New V ale Inco Strong concluded his statements by pointing to positive developments and good news arising from the restructur - ing. The opening of V ale’ s new T otten Mine will require hiring people to fll roles at the new operation. The T otten Mine will be the frst new V ale mine in Greater Sudbury in 40 years. T ot - ten has a life span of approximately 20 years and will employ 160 people. It will cost $760 million and create more than 500 jobs plus drawing on supplies and services from many lo - cal companies including those from Sagamok Anishnawbek, a key partner in the project. A new Impact Ben - eft Agreement was signed with Chief Paul Eshkakogan last year . “T otten’ s new head frame symbol - izes a new era of modern mining in Sudbury ,” enthused Strong. “W e very much look forward to celebrating the opening of this new mine with you next year .” Cont’d from pg. 84