Vale Manitoba Operations Update: November 23, 2010

Nov 23, 2010 | Corporate Member News

Answering Your Questions:

Vale is pleased to share with you the first issue of Manitoba Operations Update – a new communication vehicle designed to facilitate dialogue and communication with our employees in Thompson, Manitoba. 

This newsletter will be fluid – it will be distributed when there is information to share or questions to be answered, and its shape and format will adjust as content requires. 

One feature will remain constant: Manitoba Operations Update is designed for you, and its subject matter will be driven by your questions, suggestions and feedback. 

Information you need to know: 

As of Friday, November 19, three Shepell-fgi counselors have been available to speak with employees or your family members about a number of concerns.   They are trained to provide confidential assistance and advice on how to manage this news.  Vale wants all employees to be aware of this service and encourages all employees who require it to make use of it. 

To book an appointment with a counselor, please call

  • 677-7358 or
  • 677-7830

You and your family members are also welcome to call the confidential Employee Family Assistance Program (EFAP) with issues or concerns.  You can call:

  • 1-800-268-5211 (English)
  • 1-800-363-3872 (French)

Answering your questions:

In this section, we will answer frequently asked questions you and your colleagues have sent to [email protected].  If your question has not yet been answered, please stay tuned.  We will address as many of your questions as possible in the coming weeks and months.

1. How will you keep employees informed? What will the communications plan look like?

Keeping employees informed is one of our top priorities. Our first step is to publish the Manitoba Operations Update as frequently as necessary to encourage the flow of two-way dialogue. The content of this newsletter is informed by questions and suggestions we receive from employees.

Additional communications initiatives and vehicles (including in-person meetings, Town Halls, etc.) will be dictated by need, opportunity, and by request. Suggestions from employees about communications going forward are welcomed and encouraged.

2. Why didn’t Tito come to Thompson? When will he come to Thompson to meet with us?

Local leadership in Thompson specifically asked to be allowed to share the news with employees first. It was important to them to not only inform employees about the decision personally, but to enlist employee support in planning a successful mining and milling future for Vale that benefits the Thompson community. Tito Martins, CEO Vale Canada, had wanted to come to Thompson on the day of the announcement but respected the wishes of local leaders. Tito is planning to travel to Thompson soon.

3. The Manitoba Government is saying Vale did not consult with anyone on its decision regarding the smelter and refinery and they were caught completely by surprise. Is this true?

No. The provincial government has been aware of the challenges facing our Manitoba Operations – both from a feed availability standpoint and an environmental standpoint for more than 10 years. 

In November 2009, representatives of Vale visited with senior officials from the Ministry of Conservation, the Ministry of Innovation, Energy and Mines and the Premier’s Office. At that time, the challenges facing our operations and the possibility of plant closures were presented again – with updates provided on the review process Vale had embarked upon to examine alternatives to maintain some semblance of processing in Manitoba. Subsequent conversations with department officials occurred in January 2010 and we committed to get back to the government when the review process was complete.

In August 2010, representatives of Vale again visited with Manitoba government officials from the Ministry of Innovation, Energy and Mines and the Premier’s Office. It was noted at that time that while the review was still proceeding – initial indications were not good. Again, a commitment was made to inform the Province first when the results of that process were complete. 

Earlier this month, Vale honored its commitment and informed the Province that despite an exhaustive review of alternatives, it could see no business case to support continued processing operations beyond 2015. We were clear at that point that the best option for Thompson’s future and Thompson’s longevity was to direct our investment to the mines.

The claim that consultation did not occur is simply not true.  With this history of prior disclosure, there certainly should not have been any surprise.

4. What are your short-term retention and recruitment plans? Long-term?

From an employee perspective, it’s important to keep in mind the long timeframe we are dealing with, and the benefit this planning horizon provides.  The four to five year timeframe gives us an excellent opportunity to develop and implement a successful transition plan.

We are currently experiencing recruitment and retention challenges and so our top priority at this time must be hiring for production needs as well as retaining our workforce.  To that end, we will be exploring strategies to build and maintain the employee base required over the next five years and beyond, and will begin to communicate these shortly.

5. Have you considered selling Manitoba Operations to another company? 

No. To the contrary, we see a long-term future for our operations in Thompson that will continue to provide employment and generate economic benefits for Manitoba. It’s a future that looks different than the present – but it’s a future we are very confident in.

6. How will this impact the Manitoba CBA?

This decision is independent of the CBA.

Our intent is to follow the applicable provisions of the CBA as we move through this process and to discuss the application of those terms to any given situation with the union in advance. Our goal is to collaborate with employees and the union as we work through this process.

7. Will the company consider allowing unionized employees to continue to work without a contract in 2011 should the union and company not reach an agreement?

Moving into the 2011 negotiations, our goal will be to reach a new agreement by September 15 that meets the needs of the business and the needs of employees. 

8. Tell us more about 1D and Pipe Kipper – what investments are you making? What is the plan?

Exploration programs are budgeted annually, and successful results justify continuance. 

The 2010 Thompson Exploration plan included $US 7.3M for exploration drift development and drilling programs and $US 8.8M is proposed for the 2011 budget. (Over the last three years, the exploration budget increased by $US 22 M). Most of this is allocated to exploration of the depth extensions of Thompson Mine and this is planned to continue as aggressively as possible. 

The 1-D Project is currently examining alternatives to exploit a significant mineral resource base in the existing Thompson Mine and is in a pre-feasibility stage that is targeted for completion in the summer of 2011. The 1-D Project represents a potential investment of more than $1 billion in Manitoba’s mining future.

The Pipe-Kipper Project is examining the mining potential of a metallurgically complex ultramafic ore resource. Concentrate qualities and recoveries achieved to date with a conventional milling flowsheet indicate a business case that warrants continued study. Pipe-Kipper is a high-volume, low-grade resource with the potential for many more years of mining activity in Thompson.

9. What will the “bumping” process look like?

We will follow the terms of the collective agreement if and when this situation arises. At that time, we will continue to be led by our values, which include:

  • working collaboratively and transparently with stakeholders;
  • demonstrating respect for stakeholders, even as difficult decisions and actions are taken;
  • doing our utmost to mitigate the impacts of our decisions; and
  • remaining firmly committed to Thompson and to Manitoba.

10. Why did you choose Sudbury’s processing operations over Manitoba’s?

Mineral reserves in Thompson have not been sufficient to operate the smelter and refinery at capacity for a number of years. As a result, Vale has been importing as much as 45 per cent of the nickel processed in Thompson from sources outside Manitoba. This external feed is no longer available after 2013. There is no business case to be made for sinking billions in capital into environmental upgrades for facilities that are not able to operate at capacity. That investment is better served supporting new mine developments. It’s also worth noting that the Thompson refinery is not able to process Sudbury’s poly-metallic ores.

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