The National Post is Canada’s second largest national paper. Terence Corcoran’s editorial opinion was originally published on November 18, 2010.
This cannot be true. The Brazilian mining giant Vale announced $10-billion in new investment in Canada, building new facilities, opening new mines, pouring fresh capital into Sudbury. Where did this come from? For weeks now, the only thing Canadians knew of Vale is that the company was the despicable foreign investor that swooped in and took over Inco and pretty much made Canada look like a sucker.
In the context of BHP Billiton’s $40-billion plan to take over Potash Corp., the Vale takeover of Inco was routinely cited as the kind of soul-destroying foreign investment Canada should stop accepting. Look what they did in Sudbury, where Vale fought the unions, forced a prolonged shutdown, and left the local community devastated.
Or maybe not. Vale didn’t leave town, or Canada, and it now appears set to sink a lot of money into various projects across the country, including $3.4-billion into Sudbury’s century-old nickel and copper operations. The plan includes the first new Sudbury mine in more than 40 years.
The new money, spread across Canada, comes on top of $1.7-billion Vale says it has invested in various capital projects over the last three years — about 50% more than had been invested by the old Inco operation in the previous three years.
A company official also says Vale has exceeded whatever commitments it made to satisfy Investment Canada’s “net benefits” test when it bought Inco. The new $10-billion plan is above and beyond those old commitments, which are about to end. Vale, in other words, appears to be doing a better job at keeping Canadian mining alive than its predecessors. If that is an exaggeration, it is certainly true that Vale has emerged as a great boon to Canadian mining that is no less than would have been achieved under the old national champion known as Inco.
As the Conservatives try to soft-shoe out of their rejection of the BHP Billiton takeover of Potash, the Vale experience makes that decision look even more preposterous. The net benefits of Vale’s presence in Canada seem obvious, as are the net losses arising from the Potash decision.