There is plenty of opportunity for local contractors and vendors as construction begins on Vale's $2-billion Clean Atmospheric Emissions Reduction (AER), the largest environmental project in Sudbury.
That's according to project manager Dave Stefanuto, who appeared before a crowd of Sudbury Mining Service and Supply Association (SAMSSA) members on April 26 to provide a detailed outline of the three-year project, construction on which started this week and is expected to be complete by December 2013.
“We really do focus on the local community,” he said. “We recognize that the experience here in Sudbury is a worldwide experience; we can't find that expertise anywhere else. So we really want to understand what our capabilities are here.”
Clean AER will reduce Vale's sulphur dioxide and metals emissions by 70 per cent from current levels. During the 1970s, two million tons of sulphur dioxide were emitted annually. Thanks to abatement programs, levels currently sit at 150,000 tons per year. By the time Clean AER is implemented, emissions will be below 66,000 tons, with an ongoing goal of getting below 45,000 tons Stefanuto said.
Of the seven per cent of contracts that have been awarded to date, 90 per cent of those have gone to local contractors. SNC-Lavalin, the engineering and procurement giant, will work in conjunction with Vale on the procurement process.
Stefanuto said Vale is encouraging SNC to look to local contractors, fabricators and construction workers first, when they have the capability and capacity to complete a job, but submissions will be vetted on a case-by-case basis.
Local contractors that have already benefited from the project include Anmar in Lively, Lopes Mechanical in Coniston, Heath and Sherwood of Kirkland Lake and Tulloch of Sudbury.
A number of RFPs will be issued in May and June, including one for 30,000 cubic metres of concrete, a piling contract and a mobile equipment maintenance shop. The more mechanical and technical contracts will be sent out for tender at a later date.
Clean AER will involve the construction of a new acid plant, a new converter gas-cleaning area, new secondary bag houses, a new concentrate storage facility and a new material-handling building, along with the installation of 9,000 feet of new duct work. All of it will be done without any halt in production.
At the core of the project is the creation of four new converting vessels; the old ones will be torn out one at a time with new ones built in their place. It will be meticulous, but dangerous, work for which Stefanuto said Sudbury's workforce will be essential.
“To be able to do that we're really relying on our local contracting community, because we have the expertise and the people who have worked in this aisle before who know how to do it and know how to coordinate with our operations,” he said. “We expect all that to be done exclusively by local contractors.”
Vale and SNC have set up a new process for appraising proposals specific to Clean AER.
SNC will generate specifications for the work and prequalify vendors and contractors, after which the company will make recommendations to Vale. The two parties will jointly generate a vendors list, which Vale will approve.
Requests for proposals will be issued by SNC, which will also do an initial technical and commercial evaluation, after which a recommendation will again be given to Vale for approval before a formal contract is sent out to the contractor or supplier.
“There's probably a little more rigour than what we've seen from our operations in the past, but as you can appreciate, on a $2-billion spend we have to follow a specific process,” Stefanuto said. “We have to be audible and accountable, and I certainly have to make SNC audible and accountable to make sure their processes meet our corporate governance requirements.”
SAMSSA executive director Dick Destefano was encouraged by the details offered by Stefanuto, since members had expressed frustration at not knowing how contracts would be awarded.
“I was exceptionally pleased with the transparency that was present today, which we've been asking for for six months,” he said. “A lot of people outside the process were concerned because they weren't being heard.”
Other good signs? SNC Lavalin has joined SAMSSA, and opened a local office in Copper Cliff. Destefano is also buoyed by the fact that the Clean AER project is being run by a local: Stefanuto is from Sudbury originally.
“It's really critical that Vale keeps the perception and their activity at the regional level, at least in Northern Ontario,” Destefano said.
One concern that remains is how, and from where, Vale will source the 1,000 skilled labour workers that are needed to pull the project off. Destefano predicts raiding from other companies and workers leaving long-term prospects for short-term gain with Vale, only to try to return to their old jobs after the three-year project is complete.
“I'm not sure we have 1,000 extra people around to go and do the project,” he said.
But Stefanuto said Vale has been planning for the shortage for a number of years. Recognizing there isn't a “magic bullet” to solve the issue, he suggested the company may look at balancing the work schedule so too much work isn't awarded at one time, allowing contractors and vendors to fulfill their commitments to sustaining existing operations.
The company also plans to embark on a trade labour marketing tour to promote the Clean AER project in demographic areas where the company knows labour is available.
“When these people start getting solicited by the unions and the contractors that say, 'We're interested in soliciting you for Clean AER,' they've heard it from us at least once,” he said. “I think that'll be a good opportunity not only for us but for Sudbury in general.”