Marathon Mining Sector Capacity Development
March 20, 2012
Contents
1 Executive Summary 4
2 Introduction 9
3 Mining Sector Overview 10
4 Value Chain Assessment 12
4.1 Mining Supplies and Services Sector Value Chain Assessment 13
4.2 Mining Equipment and Supplies 17
4.2.1 Components and Parts Fabrication and Casting Maintenance and Repair 17
4.2.2 Blasting and Drilling Products and Services 18
4.2.3 Product Supply Gaps 18
4.2.4 Electrical Equipment 19
4.2.5 Fuel Handling and Storage 19
4.2.6 New and Renewable Energy 20
4.2.7 Safety 20
4.3 Testing and Analytical Supplies and Services 20
4.3.1 Testing and Analytical Services 20
4.3.2 Geological/Geophysical 20
4.3.3 Multi-disciplinary consultants 22
4.4 ICT Support 22
4.4.1 Mining Software 22
4.4.2 Telecommunications 22
4.5 Engineering & Technical Services 23
4.5.1 Water Treatment and Management 24
4.6 Site Construction 24
4.7 Logistics 25
4.8 Professional Business Support 26
4.9 Human Resources Support 27
4.9.1 Confederation College 27
4.9.2 Contact North 27
4.9.3 Education and Training Partnerships 27
4.10 Hospitality 27
5 Value Chain Opportunities 28
5.1 Value Chain Gaps 28
5.2 Business Expansion and Attraction Models 29
5.2.1 Business Expansion Potential 30
5.2.2 Target Company Characteristics 30
5.2.3 Mining Development Centre 31
5.3 Developing a Sustainable Mining Sector 31
6 SWOT Analysis and Lessons Learned 33
6.1 SWOT Analysis 33
6.2 Lessons Learned 34
7 Marketing Strategy 38
7.1 Marketing Messaging and Value Proposition 38
7.2 Strategic Marketing Objectives and Promotional Initiatives 2012-14 41
7.2.1 Human Resource Development 42
7.2.2 Land and Building Availability 43
7.2.3 Logistics Infrastructure 44
7.2.4 Business Development Initiatives – Entrepreneurship, Research and Innovation 45
7.2.5 Investment Attraction Initiatives 46
Augment Existing Relationships with Multipliers 46
Increase Awareness of Marathon’s Mining Sector 48
Communications Campaign 48
7.3 Techniques for Marketing Strategy Implementation 48
7.3.1 Lead generation - Investment Attraction 48
7.3.2 Trade-Show Strategy and Plan 50
7.3.3 Coordination 52
7.3.4 Booth Activities 52
7.3.5 Post-show 52
7.3.6 Trade Show Opportunities 53
7.3.7 Communications Strategy - Marketing Messages Deployment 55
7.4 Immediate Next Steps 57
8 Appendices 58
8.1 Stakeholders Consulted 58
8.2 Interview Questionnaire 59
8.3 Procurement Survey 60
1 Executive Summary
The Town of Marathon has great potential to continue to benefit from its mining resources and long, stable track record in the mining industry. Ontario’s development of the Ring of Fire, and the prioritization of the mining sector in the province, will help support and bolster Marathon’s initiatives in this sector. In the past, Marathon has adapted to new mining demand and has developed a strong relationship with Barrick Gold and other support and service companies in the town. With the future development of the Stillwater mine anticipated for late 2015 onwards, the mining supply and service companies in Marathon will have new and increased opportunities for business growth. In addition, the provincial government is very interested in supporting mining development in Northern Ontario – making it an appealing market for business investment.
Study Objectives: The Town of Marathon Mining Sector Supply and Service Study will:
§ Identify the key advantages, with supporting data, of a mining sector cluster in Marathon
§ Determine specific investment targets based on the community`s assets and competitive advantages
§ Assess the Stillwater project and determine the opportunities that exist as a result of the development
§ Identify and inventory local SMEs with the potential to compete in the mining sector value chain
§ Capture the views of mining industry leaders, industry associations, local business and provincial and federal government officials
§ Recommend specific actions that MEDC should undertake to market the community more effectively to the mining sector.
Study Methodology: This study was informed by extensive analytical research regarding key sectors and regional competitiveness, a stakeholder engagement process, benchmark indicators for business attraction and best practices research for mining sector business development and attraction.
Key Opportunities - There are a number of service and supply gaps in Marathon that present key opportunities for business development and growth in the Town. In particular, companies with the following characteristics have potential to strengthen Marathon’s value chain:
§ Agile Distribution Companies; small satellite branches of sizeable companies can offer supplier flexibility with access to large inventories, and can assist the Town in being more responsive to new business needs.
§ Software developers and resellers; offering new products, purchasing and reselling equipment and GIS services are non-existent in the Town. Mining software providers who can assist with geological exploration and 3D mine design are not present in the community.
§ Engineering Firms: Marathon has two companies offering engineering and technical services focusing on environmental clean-up and reclamation. However, there is a lack of firms providing exploration and development services, as well as environmental consulting. Again, there is potential for a satellite office in Marathon.
§ Exploration Services: The supply and servicing of laboratory and testing services and equipment are a key component in the exploration stage. Currently the Town has no firms involved in the provision of testing or analytical services, geological services or equipment, or any firms who provide consulting services during the exploration stage.
§ Multimodal infrastructure and logistics hub: integration of Marathon’s various transportation assets, combined with its port and water access provides a unique potential for the development of a small, integrated logistics hub. As the Ring of Fire development continues, the demand for transportation services will increase significantly in Northern Ontario.
These gaps, combined with increased mining activity due to higher prices, the development of the Ring of Fire, which is three hours from the region, and the anticipated Stillwater development, provide the Town of Marathon with a strong value proposition with which to strengthen the mining sector service and supply value chain.
The Marketing Strategy outlines how the Town can convey this proposition, focusing on messages that communicate Marathon’s:
§ established mining industry
§ strong vibrant community
§ progressive community leaders who support the industry
§ substantial mining knowledge base in the community
§ strong mining workforce
§ central location with multi-modal potential
§ location at the heart of major mining opportunity areas.
Recommendations /§ Build on current education and training initiatives, as well as develop attraction initiatives for new talent.
· Liaise with Confederation College to extend programming to technology driven mining operations – geological/mining software, operations, information technology and telecommunications.
· Explore partnership opportunities with software providers to provide cooperative or other applied learning opportunities for post-secondary students or adults interested in re-training.
· Partner with local school boards to host a symposium for careers in the mining sector.
· Develop career information modules for the mining industry.
· Develop a lifestyle brand for Marathon around the outdoor lifestyle and recreation opportunities to attract key talent such as metallurgists, geologists and engineers.
§ Develop new industrial land and buildings to increase availability.
· Increase industrial lands inventory for development.
· Determine viable supply options such as crown lands, land purchases, or current vacant lots.
· Develop an industrial lands development plan.
· Maintain a list of available properties and buildings.
§ Integrate the various components to develop the intermodal logistics hub in Marathon.
· Develop a strategy and plan to mobilize road, rail, air and water into an integrated, multi-modal logistics strategy to capitalize on mining and other sector opportunities.
· Upgrade the roads infrastructure in and around the Port, Ring of Fire, and the industrial roads that connect Highway 17 to Highway 11.
· Deploy the rail assets in the Town.
· Attract a scheduled service airline for cargo and passengers.
· Apply for government funding to undertake a gap analysis to determine required infrastructure upgrades.
§ Undertake business development initiatives to grow local opportunities for existing businesses.
· Identify businesses seeking expansion opportunities and create a forum for dialogue and opportunity exploration and regular site visits with local businesses.
· Work with local businesses to ensure they access the tools to help them capitalize on opportunities.
· In partnership with Barrick, identify potential business development opportunities.
· Establish a mining development centre with infrastructure and services to support the mining industry, particularly prospectors and juniors.
· Create an ad-hoc committee of local stakeholders to provide insight and intelligence on emerging mining opportunities.
§ Undertake investment attraction initiatives focused on filling gaps, expanding on current relationships and showcasing Marathon’s opportunities.
· Develop a mining resource portal for prospectors and juniors, potentially a precursor to the mining centre.
· Target former Marathon residents who could be business owners.
· Develop business immigration initiatives to attract businesses in key service and product areas.
· Augment existing relationships with multipliers.
· Leverage on-site presence of key mining companies by identifying key onsite companies at Barrick and meeting with them to discuss expansion opportunities.
· Develop a trade show program for 2012-2013 with partnership opportunities, especially with prospectors.
· Implement lead generation activities and an FDI program.
· Develop symposiums and events to showcase exploration opportunities in the Marathon area.
· Develop a retail and hotel attraction strategy and plan.
· Explore the potential for a smaller investment attraction organization under the wing of the Northwestern Ontario Development Network.
· Develop a communications strategy and pieces to support investment attraction.
Next Steps
§ Investment in lead generation ($21,000)
· $15,000 – Work with consulting group to generate a program for lead generation around the following events: Mine Expo in Las Vegas (September), Northern Mines Expo in Timmins (May), CIM in Edmonton (May); program can consist of arranging meetings for Marathon trade show delegates and/or attending shows on behalf of Marathon
· $4,000 – Development of an investment attraction prospectuses for Mining Equipment Supply and Services and consulting group to distribute and follow-up on distribution
· $2,000 – Stand alone commercial/industrial real estate online inventory
§ Media and Public Relations ($9,000) … Paid advertising increases name recognition, but media relations increases credibility. Good public relations does not happen on its own. It takes a lot of skill, and consistent hard work, over a period of time. It is part art, part science and when practiced correctly the results can be very rewarding.
· $8,000 – develop an inventory of copywriting and articles on mining activity in Marathon and the region and aim for a continual feed of press through target media; partner with Hemlo and other companies and prospectors; the College could be an effective partner
· $1,000 – develop a template for Marathon’s own industry newsletter that is populated with above articles
§ GIS mapping ($10,000)
· Create GIS mapping strategy for mining sector
· Compile information on exploration surrounding Marathon and design web interface, preferably link with Google Maps instead of proprietary software. This web interface can be connected to Ontario Geological Survey's web portal. OGS should be contacted as a potential partner or advisor in this process.
· A partnership with NCIR for matching $10,000 and consider partnership with NODN and OGS to contribute another $10,000. Mapping projects like this have been conducted in the Greenstone area and was successful in bolstering exploration activity. In fact, Greenstone Economic Development Corporation is interested in having the mapping data they compiled be housed in Marathon in addition to mapping data from across Northwestern Ontario. The technology created for the Greenstone project cost $25,000, however, licensing of the software may be cheaper now.
2 Introduction
Mining is a key economic driver of northern Ontario with Marathon positioned to become a hub of mining supply and services for exploration, resource extraction and processing facilities located in the community. Today, Barrick Gold Corporation’s Hemlo operation is one of the largest gold producers in Canada and, as a result, Marathon has developed a skilled and knowledgeable workforce in the mining sector and has some established equipment suppliers and related service providers located in the community.
Recent exploration has also found significant deposits of copper and platinum 10 km from Marathon. The project, operated by Stillwater Canada, seeks to develop an open pit mine and milling operation. Stillwater expects the environmental review process to be completed by 2015. Projections are for an 11.5 year reserve mine life with strong expansion potential. The project will create an estimated 300 construction jobs, and 130 to 250 permanent full time positions throughout the life of the mine. There will be roughly three spin-off jobs for each full time position.
Gold, palladium, copper, platinum and diamonds are among the area’s natural assets, and exploration programs conducted by prospectors and juniors, including Entourage Metals, have been positive, pointing to future opportunities in mineral extraction. Exploration activities are likely to continue and perhaps see more increases as commodity prices continue to rise.
There is an opportunity for Marathon to strengthen its position as a mining cluster based on increases in exploration activities around Marathon and throughout northern Ontario. The Marathon Economic Development Corporation (MEDC) has already taken some initiative in cluster development, including work with Confederation College and Barrick-Hemlo to establish an Applied Mining and Industrial Training Centre.
This project examines other opportunities, specifically:
§ Determines specific investment targets based on the community’s assets and competitive advantages and the views of mining industry leaders;
§ Identifies and inventories the local mining sector value chain;
§ And, recommends specific actions the Marathon Economic Development Corporation (MEDC) should undertake to market the community more effectively to the mining sector.
By following the recommendations that are outlined within this document, the MEDC can guide the expansion of an innovative cluster that will generate jobs, attract investment and provide opportunities for existing small and medium sized enterprises (SMEs) to expand.
3 Mining Sector Overview
Over the past few years, the mining industry has experienced a boom in growth, with high commodity pricing leading to increased exploration and development. However, this new growth is different from previous eras of high demand, and today’s mining industry has had to adjust to a new, volatile reality over the past several years. With new developments have come new risks, higher input costs, and demographic changes which have led to a decreasing availability of skilled labour. Barrick Gold has responded, for example with an expanded role in workforce development. The table below outlines a number of major trends and their impacts.