Dick DeStefano - Executive Director SAMSSA

Dick DeStefano

“We are reaching a point where the mining supply industry in Sudbury and Northern Ontario is as important for the global mining industry as the orebodies. This is exemplified by the fact that the large mining firms located in the area expend on average 80 per cent of their supply dollars locally as compared to 30 per cent anywhere else in the world”.

-Professor Jean-Charles Cachon, Laurentian University, Sudbury, July 2008

This reliance on the local supply sector translates into an estimated $750 million spent on a local basis, annually.

A recent comparative study entitled Innovation, Marketing & Management Strategies among Mining Supply Firms: A Comparison between Canada & Chile (Antofagasta) written by Jean–Charles Cachon and Huguette Blanco, School of Commerce & Administration, Faculty of Management, Laurentian University, demonstrates again that the Sudbury mining cluster is a world leader.

The study, completed in June of 2008, compared strategies for innovation, marketing, and management, including human resources training, financing and quality control.

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Marilyn Scales - Canadian Mining Journal

I am no economist, and I don’t have a magic formula to predict the future of commodity prices. Instead I read other people’s prognostications and watch for trends. Sadly, the trend that has is emerging involves a downturn in the cyclical high that miners have enjoyed since 2002.

For what my advice is worth, watch the US dollar get stronger. It would appear the recession caused by the sub-prime mortgage fiasco in that country was short-lived. The relative worth of the American dollar affects global commodity markets.

The price of crude oil has dropped from its US$145/bbl high in mid-July to below US$109 despite Hurricane Gustav’s trek across the Gulf of Mexico. The storm blew through the oil-producing region at a relatively mild strength of Category 2 and 1. Analysts who said only a week ago that Canadian gas prices would skyrocket to C$1.75/litre are now saying they will drop even further than the C$1.25/litre it is in Eastern Ontario today.

Everyone jumped on the bandwagon as the gold price topped US$1,000/oz in mid-March. Exploration, development and takeover activity reached a fever pitch. But the high cannot be sustained. With the exception of a brief rise to US$977/oz six weeks ago, the gold price continues to slide, closing just short of US$800/oz on Sept. 2. I would hazard a guess that no other metal price reflects such an inverse correlation to the value of the U.S. dollar.

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