Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.
We in the mineral industry often speak of “direct jobs” generated at mines and mills and “indirect employment”, those jobs as suppliers, manufacturers and consultants that spring up to serve the needs of the industry. We know that for every person directly employed by the mining industry there are several others indirectly employed.
Those numbers and others aspects of mining’s importance have been pinned down in a new survey prepared for the Sudbury Area Mining Service and Supply Association (SAMSSA). The Northern Ontario Mining Supply and Services Study looks at about 500 separate firms and organizations in what might arguably be called the “heart” of the mining sector.
The study found approximately 23,000 people are employed in the supply sector. That is a more generous number than the Ontario Mining Association came up with. But the OMA estimate of 480 direct mine jobs and 2,280 supply and services jobs in the province sounds too low by a factor of 10. The difference is probably due to differing definitions of what is a “mine” job or an “indirect” job. Either way, keep the multiplier effect in mind.
The SAMSSA study put a value of $5.6 billion on the supply and services sector in Northern Ontario. The amount is broken down by region: $3.94 billion in Sudbury, $770 million in North Bay, $590 million in Timmins and $350 million in Thunder Bay. Most of the companies polled sell directly to miners, and the firms generate 81% of their income from domestic sales. Of the companies surveyed roughly half depend on a single customer for almost 30% or two customers for at least 50% of sales.
Therein lies the rub, says SAMSSA. The support industry flourishes close to the mines. If the supply and services sector is to grow it must diversify, turning its attention to global opportunities and offering complete packages of integrated mining solutions rather than mere parts and equipment.
Hope lies in a four-point plan created by the association. First, develop an e-quartermaster capability. Second, promote a Northern Ontario best practices standard. The third is to create a consortium to provide total solutions that will be attractive to global customers. Finally, development of a foreign market entry plan for individual firms.
There are undoubtedly miner-supplier situations that parallel the Northern Ontario experience in other mineral producing regions. Think coal in British Columbia and Alberta. Think potash in Saskatchewan and New Brunswick. Think uranium in Saskatchewan. Think base and precious metals in multiple locations across the country. The findings of the SAMSSA study hold many truths for all of them.
The Northern Ontario Mining Supply and Services Sector survey may be read in its entirety at www.SAMSSA.ca. Call executive director Dick DeStefano at 705 -522-2606 for further insights.