• Thank you, and good afternoon everyone. It’s been a little while since I spoke to the Chamber, so it’s a pleasure to be here.
• Actually it’s been almost a year to the day since Murilo Ferreira, Vale Inco’s President and CEO, first came to Sudbury to speak to this audience. This was shortly after CVRD completed its acquisition of Inco.
• The theme of his speech was “Together, We are Better” – and I’m sure some of you may have been skeptical.
• He also said the acquisition wouldn’t change things much in Sudbury…but I might argue – since then, things have changed…and for the better.
• What an incredible year we just had at our Sudbury operations:
Twenty-four and a half dollars for a pound nickel;
Hundreds of millions committed for new mine development and maintenance;
Increased exploration initiatives;
Continued investments in environmental protection and sustainable development;
And the beginning of our biggest hiring initiative in more than thirty years.
• …Not to mention the fact that Sudbury is currently experiencing one of the hottest housing markets in Ontario.
• Indeed, we are celebrating historic good times in our industry and in our city…and we’re doing everything we can to work with our community partners to ensure we stay competitive and prosperous in all price cycles.
• From the mining supply and service sector, to business and government leaders, to healthcare and education providers, to advocates like the Chamber of Commerce….
• …Together we truly are better…because working together is what Sudburians do best.
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• As you all know, in November we announced a change to our corporate name…
• …This certainly isn’t the first time in our history.
• The original International Nickel Company of Canada was established in 1902 with the merger of the Canadian Copper Company and the Orford Copper Company. Obviously from their names, they were originally mining for copper.
• In fact, nickel was considered a nuisance metal!
• It would have been hard to predict back then that Sudbury’s “nuisance metal” would play a critical role in the Second World War…
• …Or in the development of jet engines, the Apollo moon missions and everyday applications like the stainless steel kitchen sink…
• …or that our “nuisance metal” would peak at $24.59 a pound as it did in May, or even reach its current range of between $12.00 to $13.00 a pound.
• In November, CVRD rebranded as Vale, while underscoring the value of the Inco name by calling its nickel operations Vale Inco.
• As a mining company, “Vale”, which literally means “valley”, reminds us of both our dependence on the earth’s riches and our important role as stewards of the natural environment.
• And Inco reflects our proud heritage in Sudbury as a worldwide leader in the production of nickel.
• Our name may have changed, but our emphasis on a principled approach to every phase of our corporate life has not – and will not.
• Our new name signifies new beginnings, new opportunities and a positive outlook for the future.
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• This positive outlook for the future is reflected in the many investments in the Sudbury Basin that were announced this past year.
• Vale Inco is a growth company. It has the means and the desire to invest in Sudbury and around the globe.
• We are the second largest nickel producer in the world, and well on our way to becoming number one.
• Vale Inco also has the best contained nickel reserve in the world at 11.6 million tonnes, almost twice as much as our closest competitor – Norilsk Nickel – which has 6.0 million tonnes.
• This provides us with an enormous opportunity to find additional resources to sustain and even increase production.
• In 2007, we spent approximately $50 million on exploration in the Sudbury Basin to support the world’s voracious appetite for our products. This was up almost 50 per cent from levels in 2006…
• …And we announced many new projects that will have tremendous spin-off benefits that will be felt throughout the community.
• Last May, the green light was given for a $400 million dollar investment to open Totten Mine.
• This is the first new Vale Inco mine in Sudbury in more than 35 years. It will create 150 jobs when the mine is in full production in 2011 and has an expected life span of 20 years.
• We also announced an additional $45 million for further feasibility and early execution work on the Copper Cliff Deep Project, which represents incredible promise for the future.
• Our goal is to replace the two old shafts at North and South mines with a brand new one, which can go deeper and access other potential ore zones including the Kelly Lake deposit. Copper Cliff Deep could be in production as early as 2013 with a workforce of about 450 people.
• In June, we announced that the exploration drilling at our Creighton Deep Project has confirmed significant high-grade mineralization between the 7,000 and 10,500 foot levels.
• Creighton is our deepest and oldest mine in the Sudbury Basin, first starting production in 1901.
• Current estimates show that we have the potential to almost double the proven and probable reserves at Creighton from 17 million tonnes to 32 million tonnes.
• That translates into 29 additional years of mining activity at current rates, with the potential of even more to come.
• …And in December, we confirmed a $132 million dollar investment to develop the 170 orebody at Coleman Mine near Levack. This project is scheduled to begin production by 2012, and will create 76 full-time jobs for 10 years of steady-state mining.
• In 2008, we have an aggressive target to produce a record 298 million pounds of nickel, up from approximately 250 million pounds in 2007.
• To support this target, we plan to spend up to $600 million on capital expenditures. This is 25% more than we spent from 2002 to 2004 combined.
• Without a doubt, Vale Inco is in the midst of one of its largest periods of capital investment and growth in well over thirty years.
• Investments such as these will help us try and meet the growing demand for our products worldwide, while securing many new jobs in Sudbury well into the future.
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• For Vale Inco, growth is not a zero sum game. Success means generating value for communities, just as it means generating returns for shareholders.
• There should be no doubt that our new company has put its money where its mouth is in this regard.
• In February, we announced a donation of $375,000 for the Sudbury Food Bank, to help ensure we continue to take care of those most vulnerable in our community.
• In September, we invested $2 million in support of a new Innovation and Commercialization Park being developed by the Northern Centre of Advanced Technology.
• NORCAT has a tremendous track record in commercializing new technologies for a variety of industries – leading to the creation of 41 new companies and more than 1,000 jobs.
• The new Innovation and Commercialization Park will be an important economic driver for Sudbury as it keeps us ahead of the technology curve and enhances our community’s long-term competitiveness.
• This initiative, and our $5 million dollar commitment toward the establishment of the Centre for Excellence in Mining Innovation – is creating a cluster of mining-related research and development in the community.
• Both NORCAT and CEMI are helping transform the city into a global “Silicon Valley of the mining sector” and enhancing the high-tech applications we routinely use throughout our operations.
• In December, we announced that in partnership with our employees, United Steelworkers Local 6500 and Local 2020, we contributed well over $1 million dollars to this year’s local United Way campaign – half of the entire fundraising effort.
• This represents one of the largest corporate campaigns nationally, and puts Vale Inco in the elite “Thanks A Million Club” which typically includes large corporations like Ford and General Motors with 20,000 or more employees. This effort was generated by the boundless generosity of our employees, and we are very proud of this accomplishment.
• Of course, our most recent donation was this week’s announcement of $4.5 million dollars to Laurentian University’s Living with Lakes Centre, for which we were granted naming rights.
• We have a long and proud history with Laurentian University and we were so proud to contribute toward their capital campaign in such a significant way.
• Not only will our investment help provide a new and much needed home for Laurentian’s Cooperative Freshwater Ecology Unit, it will help it develop into a world-renowned centre for excellence in freshwater restoration – allowing the rest of the world to benefit from ground-breaking restorative environmental work being done here in Greater Sudbury.
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• The Vale Inco Living with Lakes Centre will ensure the long-term health and recovery of our many lakes – and underlines our commitment to reduce the footprint of our operations on Sudbury’s environment.
• We recognize it’s our responsibility to restore the land we mine – and the results are evident in better air and water quality, and a more pleasing green landscape.
• Our approach to the environment is guided by three simple principles: We accept responsibility; we act responsibly; and we strive for continual improvement to meet and surpass the standards that are expected of us.
• Since 1986, we have invested close to a billion dollars to reduce sulphur dioxide emissions below current regulatory limits, dramatically improving our region’s air quality in the process. And as we speak, we are investing in new technology to reduce our emissions a further 63% by 2015.
• Over the years, we’ve also worked closely with the community on a massive revegetation and reclamation program that has transformed our region’s once bleak terrain into an environmental success story.
• We spend $5 to$10 million dollars annually on reclamation initiatives in Sudbury, including the contribution of 75,000 trees per year to the City.
• One of our most visible initiatives last summer was our slag regreening project on Big Nickel road. It involved moving 300,000 tons of slag and hydroseeding the area, at a cost of more than $4.5 million dollars.
• We received tremendous feedback from our neighbours on this initiative, and we look forward to seeing greener and more attractive hills off Big Nickel Road this spring.
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• Helping to build a strong, vibrant and attractive community is of crucial importance moving forward as we face one of the most significant challenges ever to confront our company – and that is the growing shortage of skilled labour in Sudbury and around the world.
• It’s no use investing in growth projects if there aren’t enough people to sustain the operations. This is especially crucial given the short and medium-term outlook for our industry.
• The world simply can’t get enough nickel. Global nickel demand growth is currently forecast at 5 per cent per year, driven primarily by the unprecedented impact of China – which is now the world’s largest stainless steel producer.
• To help give you an idea of just how great our challenge is consider this. There are approximately 5,000 people working at our Ontario operations, and more than 900 people, or one-fifth of our workforce, are eligible to retire.
• In 2008, our goal is to hire 500 new people – the largest intake in decades.
• This will be a significant challenge. It means finding innovative ways to attract a new generation of employees and providing them with the knowledge and skills that are necessary to maintain our competitiveness.
• Our people have always been our competitive advantage, and we fully intend to keep that advantage as we evolve in the years ahead.
• To help train this next generation of technologically skilled workers, Vale Inco is working on a number of fronts…
• We have established an innovative new Mines Training Centre at our operations – which 96 people will go through this year.
• We have partnered with Cambrian College, the provincial government and other Sudbury employers on a trades apprentice program called Skytech. We provide 100 co-op placements annually through this program, and the vast majority of our skilled trades are hired through this route.
• We are hiring 35 new graduate engineers this year through our Engineer-in-Training program and continue to provide offers to engineering co-op students in advance of graduation.
• We embarked on two successful Northern Ontario “road show” career fairs last fall, where over 500 people attended…and we intend to do more events like this in the future.
• …And we are continuing our innovative Trailblazers Program, which puts high potential employees on a fast-track course for career development.
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• Moving forward, we recognize our people continue to hold the key to our shared success. And success to us means more than being the largest or most profitable nickel company – it’s about leading in every aspect of our business.
• First and foremost, it’s about leading in safety …ensuring every man and woman working at our operations returns home safely to their families after each and every shift.
• We’ve celebrated some wonderful milestones in this regard. Last month, our employees at North Mine achieved three consecutive years without a single disabling injury. This is an achievement virtually unprecedented in the mining sector – and we are extremely proud of that.
• As testament to their excellence, North Mine was awarded the National John T. Ryan Trophy last year for being the safest metal mine in Canada. This is the third consecutive year a Vale Inco mine has been recognized with this honour.
• Success is also about operating responsibly, with respect for our natural environment and the communities that support us.
• …it’s about social responsibility, partnering with our communities to grow, diversify and strengthen.
• ….and it’s about operating in a manner that makes us an employer of choice for current and future employees, and a neighbour of choice for the communities in which we operate.
• Vale Inco is very proud of the men and women in our operations in Sudbury, and of the relationship we’ve fostered in the community where we live and work.
• On behalf of Vale Inco, I look forward to continuing to work with all of you to maximize our community’s potential. In the last year, we have proven that together we are better. Now, as we embark on a new era of prosperity and success, we look forward to ‘growing together’.
• Thank you.
CHECK AGAINST DELIVERY
Remarks by Fred Stanford
President, Vale Inco Ontario Operations
at the Sudbury Chamber of Commerce President’s Series Luncheon
January 31, 2008