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• Thank you Geoff for that kind introduction. It’s a pleasure to be here.
• It’s so nice to see so many friendly and familiar faces here in Copper Cliff this afternoon. I’m not sure if your motivation to come here was to hear me speak or for a great plate of Italian food, but regardless I appreciate you coming here today.
• To all of the sponsors of today’s luncheon, thank you for your support of this event…it’s very much appreciated and we are happy to count you as partners in our business.
• I want to especially recognize Debbi Nicholson, who’s been an exemplary leader of the Greater Sudbury Chamber of Commerce for almost 35 years. Debbi – you lead with dignity, a sharp business sense and a keen awareness of what’s in the best interests of our community. I congratulate you on all the things you’ve accomplished, and thank you for the invitation to give an update on our operations here today.
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• As I think many of you know, I grew up in Espanola and started in this industry way back when as an underground miner. My roots in the mining industry, and in the Sudbury area, run very deep. This is the place I’ve chosen to work and raise my family, and the place I call home. Sudbury is, and I believe always will be, one of the greatest mining communities on the planet.
• And it’s not just the ore in the ground that makes Sudbury unique. Don’t get me wrong – you obviously can’t have a great mining community without this kind of extraordinary ore body beneath us, but I believe what truly sets Sudbury apart are the people that make us who we are…
• …People that have essentially invented the art of mining over the years through hard work, resilience and perseverance, resulting in some of the finest and purest nickel produced in the world;
• …People that have created a leading-edge, world-class mining supply and service sector that is second to none globally;
• ….People that understood the need to diversify the economy and turned Sudbury into a centre of excellence not only for mining, but for education, business, healthcare and tourism.
• And people like you in the room that understand that only by working in a spirit of innovation, sharing and collaboration, can we truly reach our potential as individual organizations and together as a community.
•As Sudbury’s largest private employer and mining company, we know that Vale plays a large part in ensuring our community continues to thrive and prosper. So today, I want you talk to you a little bit about how Vale is continuing to work to implement new and innovative solutions that will create the next generation of sustainable mining here, and how we’re working as a partner to enhance Sudbury’s reputation as a destination of choice to live, work and play.
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• The mining industry has changed in so many respects, and relying on what worked yesterday won’t get us through to tomorrow. The technology available to us today would have been unthinkable even a decade ago, and we have to seize on it in order to compete with companies on the other side of the world.
• As the founder of Apple, Steve Jobs once said “Innovation distinguishes between a leader and a follower.” And I can tell you, Vale plans to continue to be a leader when it comes to modern mining.
• In order to do this, we have to breathe new life into our current mines and build the mines of tomorrow. And in an operation that’s been here for more than 100 years, the only way we can do this is through innovation, ingenuity and significant capital investment.
• And while Vale continues to make these investments, most of the solutions we’ve looked for have come from neighbours in our own backyard. In fact, the world comes to Sudbury to find the kind of innovative thinking, specialized skills and supplies available to us here to maintain and modernize our operations.
• Over the past five years, Vale has spent approximately $3.3 billion on supplies and services purchased from local vendors right here in Greater Sudbury …with almost $1.7 billion spent locally in 2012 and 2013 alone. This is for both capital and ongoing operating expenditures, and has helped Sudbury weather through the storm of a global recession and downturn in the nickel market.
• These unprecedented investments are making Vale’s operations more competitive, local businesses more prosperous and Sudbury’s economy stronger than ever. It’s a win-win-win prospect, and with significant investments planned for the coming years, we will continue to set the stage for our shared success.
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• One of the capital investments that we’re most proud of is our newest and most modern facility – Totten Mine. Totten is our sixth underground mine in the Basin, and a great symbol of how working together with local partners we’ve built an innovative mine that will act as a template for future mine development here and around the world.
• The development of Totten Mine took seven years to complete. Approximately 500 people, mostly from local companies, were employed at the site during peak construction.
•We officially opened Totten in February of this year, and were honoured to have Premier Wynne, Minister Michael Gravelle and many other local community partners there with us.
• A key distinction of Totten Mine is the relationship we have with the Sagamok Anishnawbek First Nation, and our commitment to share in the economic benefits with the Sagamok community.
• I was pleased to sign an Impacts & Benefits Agreement with Chief Paul Eshkakogan in 2012, and to help effect positive change within that community through employment and skills training, business opportunities and environmental stewardship.
• I believe the relationship we have with Sagamok can serve as a model of what a productive, forward-thinking and mutually beneficial relationship between a resource company and a First Nations community can look like.
• Our local aboriginal communities have a lot to offer and this is an area of corporate social responsibility where Vale is putting our hand up willingly as an active and engaged partner.
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• Our pride in building Totten has only been surpassed by the pride we take in seeing it successfully operate.
• Now that it’s in operation, Totten employs approximately 200 people full-time. It will produce copper, nickel and precious metals and over a life of approximately 20 years.
• Totten features the latest in mine technology and safety automation, including a wireless underground communication system and state-of-the-art control room.
• Through the wi-fi system we’ve installed underground and the use of radio frequency ID tags on people and equipment, we can immediately identify where everyone is, at any given time, providing obvious benefits from a safety perspective. This system also creates the back bone for future technologies including remote data capture and collision avoidance.
• The system also allows for ‘ventilation on demand’, something we’re increasingly looking to apply to our other operating mines.
• To set some context, energy is our second-highest operating cost…second only to labour. In fact, we estimate that we will spend some $140 million dollars on purchased energy in Ontario this year alone, despite the fact that we produce approximately 20% of our own power.
• Roughly half of our energy bill is attributed to ventilation…so that we create a safe and comfortable work environment for our people working in our mines underground. Currently, our ventilation systems are designed to run at full power, around the clock, throughout the entire mine…like running an air conditioner at full-blast when no one is home.
• Instead, were finding ways to deliver the right amount of air, at the right temperature, to the right place at the right time so that ventilation is being used efficiently across the mine.
• At Totten, the method to do this is quite simple. Our ventilation system directs air based on the detection of the RFID tags I spoke of earlier, and adjusts the volume of air accordingly through the use of automated control systems and fans. We expect the energy savings we realize through this system to be substantial…not to mention the environmental benefits.
• We’re currently working on engineering studies for Ventilation Control Systems at our other mines including Creighton, Coleman, Copper Cliff and Garson.
• At Coleman Mine alone, by implementing such a system, we project we can avoid more than 30,000 megawatt hours in purchased power every year…which is beneficial not only to our bottom line, but to Ontario’s energy grid and the surrounding environment.
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• In a mature operation like ours, adapting 21st century technologies like Ventilation on Demand to 20th century processing plants is essential to ensure our ongoing competitiveness. The solutions aren’t easy . . . and require ingenuity and investment . . . but they’re absolutely necessary if we’re going to succeed over the coming years.
• Another great recent example of this is the “Challenging Ore Recovery” Project – otherwise known as the CORe Project. This was a $200 million investment completed at Clarabelle Mill last year, which involved construction of a new 38,000 square foot plant containing a new and modern flotation system, and an upgrade of our existing Mill.
• The project created 200 jobs at peak construction, and again, the majority of the work was sourced by local suppliers.
• The intent of the project was to increase the valuable metal we recover at Clarabelle Mill, and I’m proud to say that we’ve successfully met that objective. In fact, the volume of increased metal we’re now able to recover is sort of like building a small new mine without having to sink a shaft or build a head frame.
• This means we can now generate more nickel and copper for every pound of ore mined and maximize the value of the resource in the ground. It’s a prime example of how we’re operating smarter and more efficiently, and implementing creative solutions to extend the life of our current mines and turn challenge into opportunity.
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• When we talk about extending the life of our current mines, one of the projects that holds a lot of promise for us is our Copper Cliff Mine project. We’re currently in the final stages of the feasibility study, and expect to have a decision on this project by the middle of next year.
• The project involves significant development at Copper Cliff North Mine, which would sustain production at the site for approximately 20 years. It also includes re-activating Copper Cliff South Mine, which is currently on care and maintenance, by extending the ramp from the bottom of the shaft and installing a new ore handling system there.
• The project would allow us to access all ore bodies that extend from Murray Mine in the North to Kelly Lake in the South, which contain nickel, copper and PGMs. If approved, it represents a potential investment of hundreds of millions of dollars, which will mean more jobs and economic prosperity for our community for decades to come. I hope to have more to say to you on this project next year.
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• At areas like Creighton Mine, there is also the potential to mine decades into the future, but one of the biggest challenges we have is figuring out how to mine deeper than we ever have before…and most importantly, how to do it safely.
• After a century of mining, the ore that’s been easy to get at has already been mined. I think it’s safe to say that the second century of mining in Sudbury will be much more challenging than the first in this regard.
• Moving forward, the majority of our reserves in the Sudbury Basin are below our current infrastructure and at depths where there will be significant cost and operational challenges to mine the ore.
• We’re currently mining at about the 8,000 foot level at Creighton, and our intent over the medium to long-term is to mine down to about 10,000 feet.
• This is incredibly deep, and a true story of innovation in its own regard. To paint you a picture, this is like mining to a depth of about 5 and a half CN tours stacked underground…certainly no small feat in engineering!
• In order to get there, we’re collaborating through research and financial contributions to organizations such as CEMI’s Ultra Deep Mining Network, MIRARCO, CAMIRO and the Deep Mining Research Consortium. We understand that we can’t solve this problem alone…we have to collaborate with the best and brightest in order to come up with innovative and practical solutions.
• The deeper we mine, the greater the physical stress on the surrounding rock becomes, so our mining methods have to change to adapt to these specific conditions. We also have to solve ventilation challenges to ensure the well-being of our people working underground at such incredible depths.
• To give you just one practical example, as many of you know, diesel equipment is the workhorse of our mining process underground. Therefore, in collaboration with our partners, we’ve spent considerable time and resources figuring out how we control emissions from this machinery to improve work conditions for our people.
• We’ve conducted research at Creighton and Totten, and since April field tests have been taking place at Copper Cliff Mine on a diesel particulate filter retrofitted to machinery from our underground fleet. The result of the filtration has been extremely promising, with a 50-90% reduction in exhaust coming from the machines.
• This technology is now commercially available, and using ways like this to retrofit our more than 850 diesel-fueled vehicles in Sudbury would allow for immediate safety and environmental improvements that will enhance our ability to mine at depth.
• And as we make these incremental improvements, we will continue to explore longer-term technical solutions that will take us into the next generation of mining here in Sudbury and around the world. We can’t have a culture of innovation without a culture of continuous improvement as we continue to look for new ways to mine smarter, and most importantly, more safely.
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• Of course, as we look to innovate and improve the environment 10,000 feet underground, there’s a lot to speak about here on surface as well.
• And to me, there is no better example of this than our $1 billion dollar Clean AER Project, designed to significantly reduce sulphur dioxide and particulate emissions from our Copper Cliff smelter.
• $1 billion is a lot of money to spend on a project that will not result in any new nickel, but it’s the right thing to do. And while some may argue the project is being driven solely by government regulation, we are actually going well beyond compliance at the conclusion of the project, down to about 20 kilotonnes of SO2 per year versus the regulatory limit of 66 kilotonnes per year.
• This represents an 85% reduction from today’s rates and significantly cleaner air for our community.
• While the project is highly complex and involves a number of different aspects, the major component is a complete retrofit of our converter aisle. This means that sulphur dioxide that currently goes up the super stack from our existing converters will be sent to our acid plant, converted to sulphuric acid and sold.
• A tremendous amount of work has already been completed on this project. With the help of a local company, we’ve successfully installed our first new converter and it’s operating exactly as planned in terms of gas capture and increased efficiency. Detailed engineering is currently underway on the next converter replacement and fabrication of the new vessel is on track.
• Engineering is also underway on a new state of the art secondary bag house, which is essentially like a giant vacuum cleaner to capture dust and emissions. It will be about the size of an NHL hockey rink, and one of the biggest of its kind in North America.
• Of interest, one of the areas of focus currently on the project is an analysis of the super stack. Given the tremendous reduction in emissions and change in our processes, we are working to figure out if we should continue to use the current 1,250 foot stack, or build something much smaller.
• A smaller structure would operate more efficiently, reducing the amount of energy used in the form of natural gas needed to maintain operation of the stack.
• Needless to say, a change like this would certainly be a very visible and tangible symbol of modernizing the way we do business in our community, and would capture the imagination of many in terms of what modern mining in Sudbury can look like. A decision on this should be made in early 2015, and we look forward to sharing it with you and the broader community.
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• Certainly another tangible symbol has been our ongoing re-greening and biodiversity program, and our slag re-greening project on Big Nickel Road is a very visible example of this work. To date, we’ve spent approximately $10 million on this specific project alone.
• …and biodiversity does not only mean planting trees. We’re currently raising walleye and rainbow trout at our surface greenhouse in Copper Cliff for release into local lakes and rivers, and we’re currently working on bringing this program underground so that we can raise fish all year long.
• And as you may have read recently, we have also started a trial to raise honey bees on our re-greened slag piles as a means to pollinate wildflowers, promote re-vegetation efforts, and increase declining bee populations.
• As we speak, about 350,000 bees are living in seven hives contained inside a repurposed trailer on the site. As a bonus, the resulting honey produced will be donated to the Sudbury Food Bank.
• The goal is to keep the honey bees protected and fed over the winter… and to continue this program over the coming years. This has captured significant media attention nationally, and I think serves as another example of how we’re thinking more broadly and going above and beyond to continue to show the world what a world-class mining community here in Sudbury can look like.
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• Everything I’ve described to you today has been borne by people — people that want to make our company — and by extension our community — stronger and more sustainable.
• Our future success relies on safety, innovation, skills and productivity… and this in turn relies on the experience and education of our people.
• As leader of our operations here in Ontario and the UK, I believe engaging our people is where the answers lie. I’ve spent considerable time talking to our employees – and actively implementing their ideas about how we can lay the groundwork for our future success.
• And the answers lie with you as well. We have so much to optimistic about…with the world-class education and training programs available at Cambrian College and College Boreal…
• …with the new Goodman School of Mines and School of the Environment at Laurentian University, developing our leaders of tomorrow…
• ..with organizations like NORCAT, investing in technologies like new Mine Training Simulation and training our people to mine safer and smarter than ever before.
• …with our research community, thinking boldly about how we deliver the next step change in mining….
• …and with people like you in the room, working in a spirit of innovation and collaboration, to continue to position Sudbury as not only a great mining community but as a destination of choice to live, work and play.
• Vale has a very rich history of mining in Sudbury…and it’s history that we honour. Like those before us, we will continue to look toward tomorrow to take the necessary measures to realize our potential as one of the best mining communities in the world.
• Together, we have a lot to be proud of and a bright future ahead of us. Thank you.
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