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Northwest business may benefit from mine development spinoffs

Mine development in the Rainy River District has taken on a greater importance following the closure of the paper mill in Fort Frances.

Mine development in the Rainy River District has taken on a greater importance following the closure of the paper mill in Fort Frances.

At about the same time Resolute Forest Products decided to padlock its mill and pink-slip 150 employees in January, local economic developers were preparing to steer the area’s economy into a new direction.

Yes, the community’s major industry just tanked, but Tannis Drysdale, the town’s economic development officer, believes there’s a silver lining to all this.

“Maybe I’m not seeing this clearly, but I kind of feel this is a huge opportunity for the community.”

The Rainy River Future Development Corporation has released a plan appropriately titled, the Path Forward, outlining its vision to grow opportunities and capture spinoffs in the mining supply and services sector, value-added forestry, retail, commercial and tourism areas, among other things.

Drysdale said Resolute’s announcement wasn’t a huge shock to many folks since the mill had been in steady decline for years.

Many of the mill workers had transitioned out and were retraining for the mining industry as heavy equipment operators or got involved with exploration drilling.

Despite the downturn in the mineral commodities market, the Rainy River area remains very much a hot bed for exploration, particularly gold.

Drysdale said all of their strategizing has revolved around promoting the Fort Frances area as the hub of a huge mining district, and that includes capitalizing on opportunities south of the border.

The area’s great white whale is New Gold’s advanced Rainy River project, 60 kilometres northwest of town, which finished its environmental assessment report and is planning production for 2017.

The Vancouver-based miner is forecasting a 14-year mine life and annual gold production of 325,000 ounces over the first nine years in processing ore from both open pit and underground.

With development capital costs of (US) $885 million, Drysdale said they’re working with New Gold to get a handle on their procurement needs.

Drysdale expects a mining procurement specialist to be on the payroll shortly, tasked to work with local businesses to get them ready to sell goods to the mine.

Chalice Gold is another area gold junior that bears watching and Treasury Metals, to the north, is advancing toward a gold mine near Dryden, plus there are billions of dollars being spent by Essar Steel and other companies on the northern Minnesota iron range.

Drysdale said it’s too early in the pre-development stage to see mining suppliers coming in, but they’ve sold lots in the town’s industrial park to companies who anticipate cashing in on mining-related infrastructure work.

To attract workers and investment, their campaign will involve promoting opportunities in resource development and a “living with nature” lifestyle as part of a new branding exercise to attract skilled labour.

“We are a place, where if you are a miner, you might want to live,” said Drysdale.

“We are a community that really values industrial development. I don’t think there are too many places where you put up a hog fuel boiler in the middle of town and everybody in the community applauds it and not a question is asked about the aesthetics.”

Drysdale, who also works with Aboriginal communities on economic development initiatives, said First Nations have been “our saviours” in demanding mining jobs to ensure that some of the wealth spinoffs, generated from this industry, stay locally.

“The First Nations in our district have been fabulous in developing new opportunities around mining. We would be in a much more difficult position had they not taken up that charge five or 10 years ago and started developing really strong businesses.”

Drysdale said they haven’t totally written off forestry and are looking to develop 10 more businesses on the value-added side by working with the Ministry of Natural Resources to create an Enhanced Shareholder Sustainable Forest Licence, a collective of harvesters that will manage area Crown forests under a new licence.

Drysdale said it will give them a better understanding of what fibre is available, what’s not being used, and it allow them to market that wood if Resolute is no longer in the picture.

“We are cognizant of the fact we are not going to attract a new pulp and paper mill, but are looking at SMEs (small and medium-sized enterprises) and adding value to the ones we have.

“It’s an entirely different world we live in now and we have this opportunity to manipulate the economy as opposed to waiting to hear from the government on who’s getting the next forest licence.”