The assets from the Ring of Fire mining development will make Thunder Bay and the region competitive on the global market.
That’s the message Keith McCullough, CEO of Hedgeye Risk Management, gave at the third Prosperity Northwest conference held at the Valhalla Inn on Wednesday. McCullough, who was the keynote speaker at the conference, focused his speech on the cycle the mining industry goes through as well as the risks and benefits for Thunder Bay.
The Ring of Fire development in the James Bay lowlands is expected to create a mining boom in the Northwest. Thunder Bay has taken steps to ready itself for that impending boom, including creating a Mine Readiness Strategy.
McCullough said when it comes to mining developments timing is everything especially when several mines in the Northwest are expected to open within the next five years.
But McCullough argued the Ring of Fire development will be a major factor in putting Thunder Bay onto the world stage.
“Rocks are rocks and you can get them out the fast way or you can take your time,” McCullough said. “All it is are matching capital and partners with ideas and I think if you look at what we have here, we have an advantage versus places like Mongolia that’s trying to pull copper out of the ground.
“There’s no reason why Thunder Bay or Northwestern Ontario couldn’t have competitive advantages. Thunder Bay is a nice place to live, you've got a lot of rocks and that’s a good thing.”
When McCullough left Thunder Bay about two decades ago, he said his hometown never made much splash until the Ring of Fire development came along and now the city’s assets can go head-to-head with any in the world.
Big international companies like those in the United States, Australia and China are looking for locations like Thunder Bay that are resource rich. McCullough said even though those big companies are looking at the Northwest, it’s on the region to market themselves to attract the capital to extra the material out of the ground.
Although with a development such as this there’s always risks involved.
McCullough said the biggest risks will be environmental and political risks. Those risks are the reasons why mining development has to be done right and not rushed, he said.
“One of these things goes wrong politically then the region looks really, really badly,” he said.
“When you look at a three to 10 year mine, timing is everything. Lots of people map the costs out of these mines relative to what the price of gold, platinum or whatever people are doing and that’s really the big risk. Prices go up and down, there is a cycle within the super cycle and you don’t want to be caught with high costs.”
Harold Wilson, president of the Thunder Bay Chamber of Commerce, said they had 75 booths this year, an increase of five from last year, and the conference is about businesses who want to grow.
The conference gives those businesses a chance to network and build relationships and bring more economic prosperity to the region, he said.
“The overall economy has been very robust,” Wilson said. “Some of our traditional industries that people haven’t been thinking about have been growing. Then you add the new industries such as the law school (and) the economy is very buoyant. Our next challenge is are we prepared for that growth?”
