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Mining the Northwest: Can Thunder Bay be a mining supply mecca?

With six operating mines, and more in the pipeline, the northwest city looks to leverage more opportunity for local supply and service companies and fill some gaps.
Port Arthur streetscape shot
Thunder Bay's north core (File photo)

Thunder Bay is involved in a very robust industry without any prominent evidence on its existence on the city's landscape.

Unlike Sudbury or Timmins, where headframes and processing plants dot the horizon, the northwestern Ontario city has become a bedroom community and a growing service hub that feed the six operating mines in the region and the dozens of exploration projects digging into gold, palladium, lithium, graphite, nickel, copper and platinum group elements.

"That's sometime our Achilles' heel when you try to illustrate to local people these points of the mining industry," said John Mason, the mining services project manager for the Thunder Bay Community Economic Development Commission (CEDC), "and some people just don't get it.

In surveying the needs of the mines currently in production and 15 major exploration projects, potentially future mines in the queue over the next decade, and other stakeholders involved in the sector, the CEDC commissioned a report, a Mining Readiness Strategy, on how the city can build on its opportunities to take advantage of the economic spinoffs of these operations and activities.

"You don't have to have the shadow of the headframe over the city and that's why this (report) was done, to illustrate us as a regional hub."

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The Mining Readiness Strategy was prepared by MNP LLP for the City of Thunder Bay and the CEDC.

In an analysis on local employment, Mason discovered mining is increasingly becoming a major private sector employer in Thunder Bay. 

An estimated 850 residents work directly in the mining industry, commuting to jobs at Impala's Lac des Iles Mine, northwest of Thunder Bay; Newmont's fly-in Musselwhite Mine, 500 kilometres north of the city; at New Gold's Rainy River Mine, northwest of Fort Frances; and at other operations in Quebec and the Northwest Territories. Some perform administrative work for company regional offices in Thunder Bay.

Mason, a retired government geologist, was hired by the City of Thunder Bay in mid-2011, to build this local awareness of the mineral development opportunities in northwestern Ontario.

Within two years, Mason and the CEDC released its first document on how Thunder Bay can get into the mining game and capitalize on this resource economy.

A 398-page document, entitled Advantage Northwest, took a broad sweep in forecasting the opportunities and challenges coming from mining development in northwestern Ontario and the Far North Ring of Fire exploration camp.

Back then, Mason was busy networking with local industrial supply companies to tune them into the emerging opportunities to get involved in the mine procurement supply chain. 

Much of his work appears to have paid off.

Among the findings in this latest mining readiness document that pleasantly surprised him was that of the major operating mines surveyed, 70 per cent of their procurement was from more than 400 Thunder Bay companies engaged in service and supply.

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With international mining companies like Impala, Newmont and Barrick in the region, the fact that they preferred to buy local was very encouraging, he said.

"That was a refreshing piece. We want to grow that supply chain because there's still further opportunity on better distribution, logistics and transportation."

There are links to filled in that chain, he said. Many mineral producers are looking for suppliers who specialize in underground support material, particularly shotcrete and underground steel like mesh and rock bolts.

Attracting more mine development firms to Thunder Bay is also on the wish list.

Australia's Barminco, one of the world's leading mine services firm, is operating in Hemlo with Barrick Gold. Manitouwadge's Manroc is also active at various mines in the northwest, but Mason would like to see another such company headquartered in Thunder Bay.

"It would be a nice complement to the our 700-plus engineers in the city that work in a variety of disciplines, including mine engineering. That's certainly a (service) gap."

Mason also sees room for improvement in adding more general-type services to the array of businesses that mining companies rely on. Among the identified needs by the miners are catering, site security, and health and safety professionals.

In the last decade, many industrial suppliers have made the transition from servicing the forestry mills in the city to expanding their clientele in mining.

Mason said well over 40 fabrication shops, large and small, have become relevant in the mining space. 

"There's been a great learning curve. We now have firms that can build mills and maintain them all the way through," he said. "And some of those firms were doing a similar thing in the forestry industry, building kraft and newsprint mills back in the day."

With some gentle prodding by Mason and the CEDC, these companies gathered their own market intelligence and made the move simply for their own survival after the forest industry in the northwest collapsed during the 2000s.

"Some of the firms don't articulate well on what their horsepower is, and you almost need a bridge or a middle man."

The CEDC has done just that by staging town hall-type meetings between mining companies and suppliers. At one gathering more than two years ago, a presentation by Greenstone Gold on its proposed open-pit mine near Geraldton attracted 250 people.

With northwestern Ontario experiencing an exploration boom - based on the number of drills in the field and pace of activity in the assay labs - Thunder Bay wants to take advantage of the global push to source minerals that can feed the North American electric vehicle battery market.

Canada's major automakers are making multi-billion dollar investments in assembly plants in southern Ontario, and federal and provincial politicians are only too eager in wade in on the action. 

Before Christmas, Ottawa and Queen's Park jointly invested $10 million on First Cobalt's plans to bring a mothballed Temiskaming-area refinery back to life. The facility will produce processed cobalt material for batteries in electric vehicles, the first of its kind in North America.

Mason sees an opportunity for Thunder Bay to get involved in the value-added side of mining as well, something that wasn't addressed in the 2013 report. 

Northwestern Ontario is one of the world's leading producers of gold but the precious metal doesn't require any upgrading. It goes straight to the gold bar stage at the mine site.

"As far as the innovation side, we should keep our eye on the ball for lithium," said Mason.

He's currently working with two potential lithium producers, Avalon Advanced Materials and Rock Tech Lithium, who've formed a joint venture to study the potential of building a lithium chemical plant in Thunder Bay. 

The proposed facility would produce lithium sulphate, a chemical used in making lithium-ion batteries. It's believed that would be the first plant of its type in North America.

The facility would accept lithium mineral concentrates from Avalon’s Separation Rapids deposit, north of Kenora, and Rock Tech’s Georgia Lake deposit, south of the town of Beardmore.

The CEDC is assisting the two companies in identifying a suitable industrial site, either the City of Thunder Bay or nearby on Fort William First Nation brownfield land.

Mason would like to see more value-added manufacturing with a battery plant next to a lithium hydroxide plant, using raw materials that are responsibly sourced in northwestern Ontario. 

"In a perfect world, if we could actually go to producing batteries in Northern Ontario wouldn't that be spectacular?" 

That could complete the full supply chain of battery and chemical production, he said.

As for the Mining Readiness document, Mason said it'll be a showpiece to promote Thunder Bay and the region at, hopefully, a live MineExpo trade show in Las Vegas come September and eventually in targeting Australia, where much mine and exploration investment in northwestern Ontario is coming from. 

They also want to use it as a advocacy document with the politicians at every level of government to inform them of what's happening in the northwest and what the industry challenges are.