By IAN ROSS
Some Northern Ontario community and business leaders believe it’s high time for the natural resources sector to develop its own trade portal into the white-hot Asian market.
Mattawa-Bonfield economic developer officer David Thompson is floating the idea of establishing a Consulate General to China and India, based in Northern Ontario, to provide a direct link to the world’s two fastest growing economies.
“Certainly a Consulate General for any forestry or resource-based industry, it makes sense to have them located in Northern Ontario,” says Thompson, who represents five rural municipalities east of North Bay.
Thompson is concerned that promoting Ontario’s forestry and mining resources were not high on the agenda of Premier Dalton McGuinty’s 125-person trade mission to China in early November.
Much of the government’s attention seemed focused on exploring opportunities in pharmaceuticals, medical research, agriculture and energy.
“I just find it ironic since most trade (with China and India) is going to be in the resource industry,” says Thompson, who wonders if the Asian visit is reflecting a Northern Ontario perspective.
Thompson says a consulate would open doors for the mining and forestry sectors but also benefit educational institutions such as Nipissing and Laurentian Universities.
Establishing a Consulate General has been discussed before. Thompson would like to pursue the idea with government.
“We have to start taking control and having our own plan and agenda from an economic perspective.”
Already some mining supply and service people are warming to the idea. Mining blast expert Tom Palangio, president of Topex Inc., made his first foray into China in 1995.
“If I was starting over again, it would have been a lot easier if I had contacts here that I could have utilized,” he says.”
He admits it was a trial-and-error process in the early going. He had to make the right contacts, find adequate translators and have the patience to negotiate the cultural, language and bureaucratic obstacles to secure a distributor for his seismic equipment and measurement tools.
His Bonfield-based blast consulting firm caters to clients in the mining, quarry and construction business around the world.
Palangio realized a decade ago that China is an emerging world player with staggering market potential, ready to spend billions to source raw materials and upgrade its industrial technology.
“They’ve got the money and they’re not afraid to spend to acquire and make up for (that technological) deficiency.”
It was no surprise to him when China Minmetals made an unsuccessful attempt last year to acquire Falconbridge.
Palangio, who has distributors in China and India, says Asian exports represent a “significant and growing” aspect of his business. But he admits China is a tough market to penetrate and establish a foothold in.
He stresses patience as a necessity to overcome language and cultural barriers as well as the political hurdles in dealing with government agencies. Building trust through personal relationships is vitally important before a Chinese partner is willing to even discuss business.
For Palangio, it took more than five years to secure a supply distributor who operates in Hong Kong and on the Chinese mainland.
Canadian embassies can identify individuals with good credit, he says, but they provide little in the way of identifying the good business partners who can peddle your product in an overseas market.
Don Fudge, the North Bay owner of Tarmagon Aggregates and a prospector, describes the North’s mining expertise as “world-class” and says the industry should continue to market itself globally by locating “windows of opportunity.”
A consulate would do that. Fudge says Canadian expertise in exploration technology and advanced mining processes are evident in virtually every major mining camp in the world.
“We need more opportunities to promote our very high technical skills here.”
Dick DeStefano, executive director of the Sudbury Area Mining Supply and Service Association (SAMSSA), is ready to throw his support behind a consulate if it benefits the North and his 60 member companies.
His group was co-sponsoring an 11-day exploratory trip to China in November. A small seven-person delegation, including representatives from Sudbury’s Bestech Engineering and Manitoulin Transport, were attending the 2005 China Mining Trade Show as well as meeting with Chinese trade officials, machinery manufacturers, and coal producers.
DeStefano says South Africa has an honourary consul in Sudbury, Marc Couse, who has been very instrumental in creating SAMSSA’s links to one of the world’s major mining countries, along with providing valuable market information.
“That’s what we hope to do in China.”
While Inco, the largest Western supplier of nickel to China, has been active there for more than 10 years, only a handful of SAMSSA’s members are doing business there.
DeStefano says many mining suppliers remain cautious and unsure of the market. As well, many suppliers’ shops are booked with orders from North and South American clients through to next summer.
