By IAN ROSS
Northern Ontario Business
Ask Dick DeStefano how Sudbury's mining supply trade association is evolving and he will tell you it has morphed into something beyond his wildest expectations.
While economists and government policy-makers lecture about creating clusters as a tool for economic growth, Sudbury's mining supply sector has taken the first tentative steps in establishing one.
Buoyed by recent visits of mining trade delegations from Chile and South Africa, DeStefano, the executive director of the fledgling Sudbury Area Mining Supply and Services Association (SAMSSA), envisions Sudbury evolving into a Silicon Valley of mining technology. The cluster will be built around a conglomerate of companies who both compete against and compliment one another in globally marketing their products.
"The whole premise of the association was based on goodwill and synergy," says DeStefano.
The reach of SAMSSA, formed last summer with about 32 members, has spread both inwards and outwards, says DeStefano, who owns Factonics, a Sudbury strategic planning firm.
"Not only (are we matchmaking) externally where we are matching up with companies in Chile and South Africa, but matchmaking was starting to go on internally."
Since the North's mining industry extends into so many facets of business life, DeStefano is fielding inquiries from accounting firms, insurance groups and logistics companies wanting to align themselves with the group.
Besides adding North Bay supply companies to their membership, SAMSSA's publicity has led to phone calls from potential clients in Elliot Lake, New Liskeard and Sault Ste. Marie.
"Now under it's mandate, it's become a Northern Ontario association," says DeStefano, who explains the membership criteria requires client companies to create their wealth and be physically located and employ people in Northern Ontario.
Despite early misgivings among the highly competitive suppliers to participate and share information, DeStefano finds each client brings something unique to the table. "They all have primary objectives in products or services that others don't seem to be duplicating."
The association has produced some promising returns to date, and he estimates there are about four or five deals currently being negotiated between South African and Sudbury firms - deals that stem from a networking trade delegation event in November.
The group has big plans for 2004 with the launch of a newsletter to share information among its membership, the establishment of an office, the purchasing of marketing tools and the upgrading of their Web site. The upgrading of the Web site is intended to showcase Sudbury as one of the world's mining technology capitals of the world. SAMMSA received about $50,000 from the Greater Sudbury Development Corp. to pursue the intiatives.
The power of the Web has been self-evident, says DeStefano, who counted about 7,000 hits on the SAMSSA site during a three-week period this fall. The hits are from locations in North America, Chile, Brazil and South Africa, and he has received reams of e-mail contacts from about 150 consulates around the world.
"Within three months we've become a worldwide brand,"says DeStefano.
Though advances in technology have boosted productivity in Sudbury mines over the years, the actual mine workforce has declined.
By 2001, employment in major mining firms in Sudbury had fallen from 27,000 in the mid-1970s to below 6,000. However, employment in the mining supply and services ranks has swelled to 8,500. Today, about 300 mining-related companies are located in the city.
Early last year, Moody's Canada released a report identifying Sudbury's economy as one of the least diverse in the country due to its dependence on mining and metals. But there is a dawning realization among business people, development officials, academics and politicians that Sudbury area companies and research institutions can offer niche expertise, products, services and technology to the world that few places in the world can deliver.
"That's one of the reasons Sudbury is slow in reinforcing the strength it had, and it's only in the last two years that the city has become conscious of that," says Laurentian University economist David Robinson. "It's just not a nickel mining centre.
"If you're producing the electronics, robotics, rock bolts, information technology, specialized rubber equipment and clothing for the mines; if you're exporting expertise in mine cleanup, you're actually a very diversified economy with a specialized base."
Robinson says the Sudbury name is a "tremendous asset" and he envisions as the cluster attracts more mining players to town for that expertise and specialized supplies, additional suppliers will move here and already established companies will expand.
Laurentian University has made mine research a major focus of its strategic plan by positioning itself as the leading Canadian institution for mining. The university senate recently approved a second mining-related PhD program in December for mining engineering, robotics, automation and advanced technologies.
In the last decade, the campus has expanded from two mining research centres to 12, with about $4.3 million of the incoming $9.5 million in research money being earmarked for mine research.
"In the long run neither Toronto nor Kingston can win as centres for mining engineering; they just don't have the brand name," says Robinson.
Developing Sudbury's mining sector into a cluster has been gaining momentum over the past year, beginning with SAMSSA and the recognition by the City of Greater Sudbury that the mining supply and services cluster is a growth engine in its economic development strategy.
"Being associated with mining doesn't mean miners with head lamps is our only contribution," says Doug Nadorozny, Sudbury's general manager of economic development and planning, who calls today's cluster more of a "communication and organization effort" than creating an entity.
"There's a lot of technology that can be exported to other organizations around the world, but beyond that the technologies that are developed for mining are showing up elsewhere. We see huge potential to take our expertise in mining and turn it into other areas."
Together with the city's post-secondary institutions, training boards, chamber of commerce and the private sector, they are organizing a cluster strategy to assign roles to undertake specific projects for three years worth of work. Then they will address the most appropriate funding mechanisms available.
Regionally, the Ontario Mining Cluster Forum in February 2003, organized by the Ministry of Northern Development and Mines, led to the formation of the Ontario Mineral Industry Cluster Council. The council is chaired by industry heavyweights George Pirie, Placer Dome Canada CEO, and former Falconbridge executive Warren Holmes, who serves as president of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM).
Together they will gather input and views from those who make their living in the industry and will pinpoint opportunities to enhance the sector's competitiveness, innovation and investment. Their findings will go directly to the Ministry of Northern Development and Mines.
The province's Smart Growth Panel for northeastern Ontario recommended in May the region be designated a "region of excellence for mining" and Deloitte and Touche released a report in September for FedNor recognizing the existence of a cluster and presenting options for federal investment in research infrastructure to support it.
www.samssa.com
