Vale faces ‘new world’ – by Carol Mulligan (Sudbury Star – April 15, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Vale is no longer aiming to be the largest mining company in the world, says the man in charge of its Sudbury operations.

It’s looking instead to generate more value from the business it has, focusing on its core assets and ensuring they generate the capital necessary to rein-vest in operations.

Kelly Strong, a mining engineer who has worked at Vale operations in Ontario since 2001 except for a three-year stint in Indonesia, was named the company’s vice-president of Ontario and U.K. operations last November.

Strong hasn’t spoken much publicly since then, but spoke of some of his priorities in an editorial board meeting with The Sudbury Star last week. That meeting was conducted underground at the 7,400-foot refuge station at Creighton Mine, where a $247- million expansion program is underway.

The timing of Brazil-based Vale purchasing the former Inco in 2006 was good, said Strong, given Inco didn’t have the “kind of money” to invest in aging infrastructure. The operations were at the “critical stage where we had to start investing back in the business” or it would have had significant challenges.

Vale’s parent company was in a period of massive growth then too, said Strong. “Literally, overnight, it turned into one of the largest (mining companies) in the world with a really aggressive strategy.”

That strategy served the company well for a time, said Strong, but the situation has changed.

As head of Ontario operations, Strong’s goal is ensuring they are self-sufficient or sustainable, earning enough profit to cover the cost of capital investments.

Those investments have been huge in recent years. As well as the $200 million invested to update Clarabelle Mill, Vale is spending $1 billion on its Clean AER (Atmospheric Emissions Reduction) program.

The plan for that project was cut in half last year from $2 billion after the decision was made to go down from operating two furnaces to one at the Copper Cliff Smelter Complex.

About a third of the concentrate being processed now at Copper Cliff is from Voisey’s Bay. It will eventually be smelted in Long Harbour, Nfld., after a processing plant is built there.

Without the Voisey’s Bay product, one furnace will be enough to handle the concentrate at Copper Cliff because the new furnace will be more efficient.

Angie Robson, head of corporate affairs for Vale in Ontar io, said local mining supply and service companies won’t lose out on much business because part of the original Clean AER plan was an acid plant that would have cost $300-$400 million.

That work is highly specialized so most of that money would have been spent on out-of-town companies.

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