Saskatoon candidate for $150M plant
By Cassandra Kyle, The Star Phoenix August 7, 2009 9:21 AM Be the first to post a comment
The Saskatoon region is on the shortlist to become the site of Fortune Minerals Ltd.'s $150-million hydrometallurgical processing facility set to separate elements from ore mined at its NICO project in the Northwest Territories.
Rick Schryer, director of regulatory and environmental affairs with Fortune Minerals, said the company is looking to build the processing facility near a community on the CN rail line that has a ready supply of skilled labour and meets the company's economic requirements.
The NICO gold-cobalt-bismuth-copper deposit, located about 160 kilometres northwest of Yellowknife, is in its environmental assessment stage and is set to come into production by late 2012.
"We did a cost benefit analysis and decided it was better if we moved the processing plant to a southern location, even if it means trucking and transporting 80,000 tonnes of concentrate a year," Schryer said.
EDMONTON, WINNIPEG ALSO IN RUNNING
The Edmonton region and the Winnipeg area are also on the company's shortlist.
Fortune Minerals is working to balance the cost of shipping product from the NICO site with the price of power. The plant, which will separate the elements using hydrometallurgical processes and ship the individual products to buyers, will be a high power user, consuming an average of 17 megawatts at any given time, Schryer explained.
"The further you move away from the Northwest Territories, obviously the higher your transportation cost, but there's a tendency for power, as you move from Western Canada to Eastern Canada, for power rates go down," he explained. "So like I said, it's a balance. You're getting further away, but the power costs are going down."
The plant would employ 85 people in specialty jobs.
It's difficult to attract and retain a skilled workforce in remote northern areas such as the site of the NICO deposit, Schryer said.
"We feel Saskatoon is an area that's attractive to people because there's a skilled labour force that's already here, there's the university, there's a lot of infrastructure in and around Saskatoon that makes it attractive to put this type of processing plant in place," he said.
Wherever Fortune chooses to put the plant, there could be spinoff capacity associated with the facility. About 11 kgs of cobalt is used in every hybrid car battery, Schryer explained, so a hybrid battery recycling facility might work well alongside the hydrometallurgical processing plant.
Jennifer Balon, director of business attraction with the Saskatoon Regional Economic Development Authority (SREDA), said if Fortune Minerals decides to build its processing facility here, it could encourage the development of the province's base metals industry.
"We're pretty much a uranium and potash mining story right now, but Saskatchewan has an enormous base metal and precious metal reserve as well and this (facility) can open that up, I think," Balon said. "This, to me, is just opening the door to that production for Saskatchewan."
Although the Saskatoon region technically has a 33.3 per cent chance of becoming the site of the Fortune Minerals facility, Balon believes the region has a very good chance of landing the project. Both SREDA and Enterprise Saskatchewan have been in discussions with the company about the plant, she said.
"There are huge opportunities with this Fortune Minerals facility," she said. "It's just so exciting and the economic potential could be absolutely huge for this province, it goes so far beyond the 85 jobs and the $150-million capital project."
The company is expected to make a decision on the location of its processing plant within the two to three weeks.
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This is an intriguing and significant proposal from a mining firm.
No doubt we are facing stiff competition from Edmonton and Winnipeg, but, I am optimistic and confident SREDA and Enterprise Saskatchewan have the experience, institutional and industry support, and incentives from the provincial government to make Saskatoon the winning candidate.
But there are many factors to consider...
Winnipeg is the furthest. However it is close to Northern Ontario, which is also well endowed with a mineral extraction, processing industry (good source of skilled labor).
Edmonton is the closest. Its the biggest city of the three, more amenities...higher cost of living than Stoon or Winnipeg.
Saskatoon is geographically centered. Has a collection of mining firm head offices, and supporting consulting and manufacturing companies.
These competitions for investment are often unpredictable. One is never too sure what kind of compromises or incentives are being offered.
Wait and see