Vale's Sudbury operations face challenge and opportunity, COO says

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The future looks bright, if challenging, for Sudbury’s biggest miner, members of the local business community heard Tuesday.

“We have fundamentally a fantastic business,” said Dino Otranto, the new boss of base metals with Vale, at a Greater Sudbury Chamber of Commerce luncheon. “There is great opportunity and great potential, but we’ve got some hard work to do, and that’s the message — we truly have a transformation ahead of us.”

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Otranto, appointed last year as COO for Vale’s North Atlantic Operations, said there is still an ample supply of ore in the Sudbury Basin and demand for nickel and other metals will only grow with the expansion of the electrical-vehicle market.

At the same time, however, “we are facing unparalleled competition,” he noted. “Our friends in the east will take over this year as the biggest nickel producer — a mantle we have had for as long we can remember — and they established that business in years, not decades, or 100 years.”

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Otranto was born in Germany but spent many years working down under with BHP and South 32, where he picked up an Aussie accent.

He said he was happy to come to Sudbury with his wife and two young boys, as communities of this nature and scope are more familiar to him than a megacity like Toronto, and he has no plans of pulling up stakes any day soon.

“I’m committed,” he said. “I’ve moved my family halfway across the world and I’m having great fun, meeting great people. The community is behind us and I’m pretty passionate about doing this right, because I know what it means for my children and everyone else of the next generation.”

Otranto said he has already gained a reputation locally for being “obsessed with safety,” and that is fine with him.

He pointed to last year’s deadly catastrophe in Brazil, where a burst tailings dam cost the lives of 270 people, most of them Vale employees.

“It’s a tragedy for our industry and it’s one we can no longer ignore,” he said. “We can no longer sit here thinking it’s never going to happen.”

Speaking at Bryston’s On The Park in Copper Cliff, the COO noted there are “a billion tons of the same material sitting right here in this community, essentially right behind us.”

Keeping the local containment structure “as safe as it can be” is crucial, he said, as is protecting workers and community members from other possible hazards.

“Here in this basin, we are not immune,” he said. “We’re not a banking industry, we don’t have risks from paper cuts. We’re deep, we have seismic activities, we have dams, we have chemical compounds. We need together to be absolutely on our game.”

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Vale already has a strong system in place locally, however, to guard against any potential mishap, he said. So much so that “what we have done is adopted what we have, right here in Sudbury, and applied it throughout the entire business.”

Otranto shared some images of the new Sudbury headquarters for the company’s North Atlantic Operations along with examples of the tools being developed for more remote and risk-free mining.

“What’s got us to this point has been amazing, but unfortunately it’s not going to be the recipe for the next 10 or 20 or 30 years,” he said. “We’re designing and operating our plants now with technology that my four-year-olds will be experts at, not me. We’re at the cutting edge and that’s one of the ways we are going to get through this period of uncertainty.”

He said several autonomous scoop trams, which can be operated at the surface with a joystick, have already been rolled out.

“We get criticized as a culture that is slow and maybe a bit old school,” he said. “But the ability of our miners to adopt this technology blew me away. They’re excited about telling me how they’re using it, and if you’ve ever been underground, and stood next to a seismic event, I’d be going for this as well.”

Otranto is responsible for operations across the North Atlantic region, which includes mines and refineries in Wales and Asia, along with other Canadian operations at Voisey’s Bay, Nfld., and Thompson, Man., but he is very much based in the Nickel City.

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“We moved the entire heart of the North Atlantic business to Sudbury, which is absolutely part of our global strategy,” he said. “Before we were a bunch of disaggregated operations around Canada and the world, but now I live here and my entire leadership team is based here.”

One operation in New Caledonia is likely to wind down, he said, unless a partner is found to sustain it, and overall the portfolio for Vale “is shrinking a bit.”

The Sudbury Basin, however, remains “core to the future of our operation,” he said.

Vale’s presence locally represents a quarter of the mining activity in the province, Otranto noted, and accounts for “about 12,000 direct and indirect jobs in the community.”

Economic output in the last decade “is nearly $31 billion, $27 billion of which came directly from these operations around us,” he added.

Going forward, Vale stands to benefit from the expected boom in electric-vehicle production.

“In the next 12 years, the demand for products that come out of the ore bodies that we own looks pretty good,” he said. “It’s a massive opportunity.”

Nickel may only be one ingredient of a battery for an electric vehicle, he conceded, but “what we make is probably the best quality nickel in the market — and our customers are jumping over themselves to get back into business with us.”

Otranto also pointed to a collaboration with Glencore, which allows Vale to use the infrastructure of its supposed rival to access ore, as a positive sign for the future.

“I’m really encouraged by this partnership,” he said. “That’s the type of thing we need to be doing and thinking about more in this basin — how do we entertain an entirely different way of collaborating to serve our common interest? And that is ensuring we all remain viable for the next 20, 30, 40 years.”

jmoodie@postmedia.com