Value-added debate taking away from BHP's fire
by Jeff Colbourne
NNSL (Apr 08/98) - The threats and demands stemming from the value-added industry debate in Yellowknife is not going over too well with BHP.
During the NWT Chamber of Commerce meeting over the weekend, BHP spokesperson Jim Rothwell said more focus should be placed on what BHP has already done for the North.
"This subject has in my view received a disproportionate amount of attention in recent months. I say disproportionate because the realistic future of job opportunities for value-added businesses are quite modest, particularly in relation to the substantial mine and mine-related employment that is already a reality today," said Rothwell.
By the time initial production starts later this year, BHP and its partners will have invested about one billion dollars to bring Canada's first diamond mine on stream.
Over 750 Northern residents were hired for the project last year which represents 40 per cent of the total direct employment compared to the company's target of 33 per cent. This is the equivalent of over 500 full- time jobs including about 200 jobs for aboriginal people.
BHP is now in full swing for the recruitment of the permanent workforce and they expect to be hiring between 10 to 12 people per week from now until startup in October, 60 per cent of whom are expected to be Northerners.
Last year the company spent $171 million with Northern-based companies, including $77 million with aboriginal companies.
Rothwell said it is understandable for Northerners to want to get involved in the diamond industry and BHP and its partners are supportive of this goal.
They should, however, be aware of the risks. It is important for interested applicants to recognize that these jobs require expertise and experience which will take some time to develop, he said.
Commercial and competitive factors should be understood. Security issues, too, should be taken very seriously.
At the chamber meeting, BHP provided details of a multiple channel marketing approach for diamonds.
An office in Antwerp has been set up to handle production with other potential channels under consideration.
"Many of the details and even some key decisions won't be finalized until we are actually into production," said Rothwell.
BHP acknowledged discussions with the GNWT, who are trying to find ways to encourage value-added activity in the North. But discussions have been difficult because of "the introduction of additional demands by the GNWT and the use of threats," said Rothwell. He added, however, that significant progress has been made recently between them.
"We have made a diligent effort to respond to the desire by the GNWT to see a sorting and valuation facility established in a Northern community. This is despite the fact that this function was planned to be done at the mine site and an off-site facility would require additional costs and security risks," said Rothwell.
Establishing such a facility would generate only a modest number of jobs initially, but would provide the potential for additional value-added industries to be realized over time on a commercial base as expertise and skills are developed by the private sector in the North.
"In our concept this facility would initially be used for basic sorting and valuation, some training and possibly division of the production for our various marketing channels. As people are trained and skills are developed it could later be used for more detailed sorting for market and for the sale of products to Canada," said Rothwell.
BHP diamonds has also met with a number of potential diamond buyers in Canada and progress is being made, he said.