Strategic Direction

With the retirement of Allen Hayward from Xstrata Nickel last fall, the Ontario Mining Association had to bump up the timing of its succession-planning protocol. Hayward, who was halfway through his two-year term as OMA chairman, has been succeeded by OMA vice-chair Olivier Chatillon, president of Omya Canada, one year ahead of originally scheduled plans.

The OMA is led by a board of directors. Five of those directors, plus OMA president Chris Hodgson, form the OMA’s executive committee, and two members of this group become vice-chair and chair of the OMA board. “This is a good model for succession planning,” says Hayward. “The organization is not decapitated with an unexpected change in plans.”

The OMA’s executive committee is responsible for the strategic plan, an adaptable list of objectives that drives the association’s actions.

In year-end interviews with CMJ, both Chatillon and Hayward spoke about the key strategies of the OMA and for the most part presented a common front–interesting, given the two men’s different backgrounds.

Hayward worked for the Falconbridge organization for 26 years, mainly at the Kidd Creek copper-zinc operations in Timmins, Ont., and the nickel operations in Sudbury. His last job was as vice-president of mining for Falconbridge’s Nickel Business Unit. The 54-year-old mining engineer was educated in Great Britain, and lives in Sudbury. He became a director of the OMA in 1998, and joined its executive committee in 2001.

Chatillon was born in the Aisne district in France 61 years ago and trained as a chemical engineer. His early work was in textiles and plastics in Africa, before joining the Swiss industrial mineral company Omya 22 years ago, working at first in Europe and other international involvement. He arrived in Canada in 1992 to become vice-president and general manager of Omya’s ground calcium carbonate plant in Perth, Ont. In 2001, he moved to Montreal as president of Omya Canada. At the end of last year, he took on the additional role of head of business development and government relations for Omya in North America. Chatillon has been on the OMA board since 1993 and joined the executive committee in 2004.

Communicating improvements

“Safety & health and the environment have always been the number one and two top strategies for the association,” says Hayward. “I’m very pleased with how safety has gone” (see p. 17). “The legislative background on the environment is continually changing, and it’s our job to provide feedback to the government about what their regulations really mean to companies.”

“Today, the industry is very responsible,” says Chatillon, “but we could communicate better that the industry has changed. For example, the mining industry’s safety statistics have improved 90% based on lost time accident frequency rate. And there is a strong commitment from OMA members to help rehabilitate old mine sites.

“Every time we have an opportunity, we should collectively and individually promote our image by example and words. The message should be: ‘Our industry is a solution provider; it is high-tech, and very responsible toward the environment and safety’.”

An improved public image would help to expedite the permitting of projects. “Omya went through a saga over its water permits,” says Chatillon, “with too many government bodies and ministries involved. This doesn’t help the competitive nature of our industry.”

Energy and land use

There are other major issues that have been tackled by the OMA in the last few years.

“All mines are major energy consumers,” says Hayward. “For example, at Xstrata’s zinc plant in Timmins, electricity represents 35% of the costs. Even the mines, especially the deep ones, need lots of electricity. We were worried that there would not be enough electricity and were uncertain what the price would be.”

According to Chatillon: “The price of electricity in Ontario has changed from a competitive advantage to a competitive burden. This has implications not just for mining but for the entire economy.”

There are recent examples of projects held up by permitting delays, such as De Beers Canada’s Victor diamond project in far northern Ontario and the Montcalm nickel mine near Timmins. “The OMA is currently working with the Ministry of Northern Development & Mines to streamline the permitting process,” says Hayward. “But mining companies have been frustrated by the lack of a detailed definition of what ‘consultation with First Nations’ really entails.”

Says Chatillon: “We need to get more involved with the First Nations now, because, when we speak of the shortage of skilled workers, the First Nations should be part of the solution. Our video ‘Mining New Opportunities’ is certainly one of the tools that the First Nations can use to help to understand our industry.”

Solving the skills shortage

The current and looming shortage of skilled workers in the industry is a relatively new item on the OMA’s agenda, but one being faced by all its members. “Where are the future generations of professionals, tradespeople and employees going to come from?” asks Hayward.

When asked why the industry didn’t see this coming a long time ago, he replies: “The low price of base metals meant that there was no major investment in base metals for a long time. We’ve been so hunkered down for so long, doing more with less… We put an enormous investment into equipment to mechanize and then to automate, to reduce the numbers of people needed.”

He continues: “Mining hasn’t been a growth industry for many years, so many university and college programs have disappeared. In many cases universities are no longer training metallurgists, and there aren’t enough mining, chemical or electrical engineers. The same thing is true of the trades–electricians, welders, heavy-duty mechanics. The need has increased because the high metal prices today have resulted in a significant, rapid increase in mining activity globally.”

Trying to retain the large number of 50- to 55-year-olds who are now eligible to retire would be a very expensive and complex business, according to Hayward, and one that would not ultimately solve the problem but just put it off by a few years.

How can mines attract new employees? “We are working on a relationship with Skills Canada to get the message into the schools that mining is a high-tech, not a sunset industry. The OMA has developed a very good website that gets an incredible number of hits. We have been working to encourage the development of new training programs. But another factor is the competition for workers from the huge oil sands projects in Alberta. This puts upward pressure on the pay rates. Increases in labour and electricity costs will put pressure on whether some projects can become mines in the future.”

Despite the difficulties, Hayward concludes: “This is one of the types of things that the OMA was meant to tackle. Obviously OMA members are in competition with each other to hire personnel. As an association, we have to make sure that we increase the number of graduates to meet everyone’s needs going forward.”

And lastly…

Chatillon offers a few more observations.

“We have to be careful today when we speak about the good health of the mining industry. My company, Omya, has had to downsize its operations in Perth, as it is more expensive to operate in Ontario today than in the United States due to the cost of power in Ontario and the relative strength of the Canadian dollar. These are not the best of times for everyone.”

Although there is already some degree of co-operation between associations, Chatillon sees a need for the OMA to co-ordinate its efforts more closely with others, both regional and national, as well as in other, related industries. For this he is in a unique situation, as he is currently not only the OMA chair but also a director of the Quebec Mining Association, and the Association of Major Power
Consumers of Ontario, as well as the Omya representative in the Industrial Minerals Association – North America (IMA-NA). “We have developed very good tools, such as for improving our public image and safety training and we should share them much better.”

Finally, “I would like to say thanks for the strong and very efficient support of the Ontario ministries, especially Mines Minister Rick Bartolucci. Our success depends on the government, especially the minister of mines. He has given us very strong support, consistently. We are very lucky in Ontario to have Rick Bartolucci.”

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