Despite Challenges Mining Industry Will Sustain Timmins for Years to Come

The future of Timmins as a mining centre was highlighted in outgoing Mayor Tom Laughren’s final State of the City speech earlier this week. Laughren who served two terms as Mayor commencing in 2006 before deciding not run in the 2014 election.

“When people think of Timmins, the image that often comes to mind is mining exploration, mining production and mining supply,” Laughren said. “In fact the mining industry employs thousands and has created wealth and opportunity here for over 100 years”.

Challenges for the Mining Sector

Laughren listed the major challenges faced by Timmins in the future to be the price of gold, global demand for minerals and the availability of mineral deposits for future development. Another major challenge will be the sunsetting of Glencore’s Kidd Creek mining operation in 2021.

 “I am an optimist and truly believe that this industry will continue to sustain us for many years to come,” Laughren said.

Positive Signs for Future Growth

Laughren pointed to the current mining activity being undertaken by Lake Shore Gold in the west end of the city as a positive development.  Lake Shore has two operating mines (Timmins West and Bell Creek) and a central mill. Production in the first half of 2014 totaled 96,900 ounces, at an average cash operating cost per ounce sold of US$585. In addition to its current operations Lake Shore also has a number of exploration targets to drive its future growth.

The other project in Timmins that is proceeding is the Hollinger Open Pit project which will create hundreds of employment opportunities over the next 10 years while it mines remaining gold resources and remove mine hazards from the previous mining operations. On completion of the project a green space and recreational area will be created for the community.

In future the proposed IAMGOLD’s Côté Lake project just south of Gogama, Ontario, is expected to account for more than $1 Billion in total investment and much of it spent in Timmins for supply and services. The Côté Lake project is expected to generate 60,000 tonnes of ores a day for 15 years and is expected to employ 1,200 workers during construction and 500 more during operation, many whom are expected to travel from Timmins.

Laughren also pointed to the importance of the getting the Ring of Fire developed for Timmins’ future.

“Let’s not forget about the Ring of Fire and its potential impact on our service industry,” he said, “It is estimated that the Ring of Fire has as much as $50 billion worth of minerals”

“We must continue to lobby both the provincial and federal governments in an effort to mobilize this development, sooner rather than later,” he added.

Mining Supply and Services Sector

Timmins employment is bolstered by a strong mining supply and services sector that caters to the area mines.  Laughren said that Timmins Economic Development Corporation (TEDC) has completed Competitive Positioning and Foreign Direct Investment Strategy Project. Based on the recommendations TEDC is now leading a three year mining supply and industrial mineral investment attraction project that would strengthen and expand current mining supply sector and increase development of the industrial minerals sector. The project costs $523,000 over three years with funding provided by Fednor, Northern Ontario Heritage Fund and community partners.

The project supports existing mining suppliers while bringing new investment to Timmins and the Highway 11 corridor including the communities of Kapuskasing, Cochrane, Iroquois Falls, Black River Matheson and Temiskaming Shores.

Timmins economy growing but a lower rate

Laughren referenced a recent study by the Conference Board of Canada on mid-sized cities found that Timmins managed a 2.5 per cent economic growth in 2014 despite the weaker gold prices. The report also points out that despite a decline in commodity prices some mining companies are continuing to push forward as Lake Shore Gold and Goldcorp.

However, weaker gold prices are expected to dampen the increases in manufacturing and primary and utilities output this year Laughren said.

Although the report shows the economy being healthy, there still is a downward trend. For example GDP growth in 2013 was 4% before dipping to 2.5% this year. Housing starts are expected to drop an average of 41 units per year. The report states that the drop is because builders are being deterred by declining population.

A decline in housing starts will hold growth in the construction sector to 2.1%, the smallest gain in five years. But wholesale and retail trade output is expected to continue to rise in 2014, even as employment pulls back.

Director of Corporate Responsibility, Lake Shore Gold

Laughren who will step down as Mayor in November after Timmins’ new Mayor is sworn was hired in September as the Director of Corporate Responsibility for Lake Shore Gold. Laughren is responsible for representing Lake Shore with government committees, regulatory agencies and maintaining relationships with First Nations and the public. He will also have responsibility for providing direction occupational health and safety and environmental performance.