Vale Base Metals is taking a wait-and-see approach at this point about the possibility of facing tariffs in transactions involving nickel and other critical minerals with the United States.
Gord Gilpin, director of Ontario Operations for Vale Base Metals Ltd., was commenting as the keynote speaker March 19 for the latest President’s Series Luncheon hosted by the Greater Sudbury Chamber of Commerce.
Gilpin responded to a comment made by Ontario Premier Doug Ford earlier this month that Ontario was ready to deal with any threats of trade tariffs imposed by U.S. President Donald Trump.
Ford was speaking on the importance of Ontario nickel and said if the United States is not interested in buying nickel, specifically nickel from Sudbury, there are plenty of other markets for it.
"Fifty per cent of your high-grade nickel that your military and manufacturing relies on, 50 per cent that you use, it comes from Sudbury, and I emphasize high-grade because there's other nickel around the world, and China has the market cornered,” Ford said on March 3.
“But guess what? If we've got to stockpile nickel here to sell to the rest of the world and shut down your manufacturing, your military, I will do it in a heartbeat," said Ford that day.
In response on Wednesday, Gilpin said the tariff situation with the U.S. is a distraction.
"Right now we're staying focused on operating. You know, this is definitely a concerning distraction in the background," Gilpin told reporters.
"We're just focused on operating safely and we will wait and see.… We're getting ready for any potential things that may happen, but at this point, the way things have been fluctuating, the best thing we can do is stay focused on operating safely and we'll see how things go," said Gilpin.
He was asked if Vale has any sort of a contingency plan if the tariff situation with the U.S. goes wrong.
"It's certainly something that we're working on. We have people working in the background, but like I said, there is such a lack of clarity on where things may go. Right now we're trying to remain focussed on our most important work and we will see where things go," he said.
In his address to the Sudbury business community. Gilpin said only 50 per cent of Vale's Ontario mineral production is nickel. Twenty-five per cent of the production is copper and the remaining 25 per cent is gold, silver, cobalt and PGMs (platinum group metals).
"And so this is one of the big benefits that we're blessed with here in Sudbury, that we've got this diverse amount of value in the ore bodies that we're blessed to be mining," said Gilpin.
He added that while the current price of nickel (US$16.24 per kilogram Thursday) is "a challenge in the nickel business right now," he said there is still a very healthy growth rate in the demand for nickel, largely because of demand for stainless steel.
"And when you see where that's coming from stainless steel is, and will continue to be, the big part of that. However, the growth is largely coming from the electric vehicles and electrification of the world.”
Gilpin's message was optimistic. He said he is confident the nickel market surplus will balance out in a few years.
"So we're going through ... a period where there's more nickel than the world really needs at this moment. But down the road, as you look out somewhere around five years, things will start to turn around. So we're in a bit of a spot right now. We’ve got to work through it."
Gilpin added that Vale is also optimistic for the future of copper demand and production, primarily because of the transition to green energy.
Talking about the Sudbury mining camp in general, Gilpin said Vale is working hard to ensure the supply of ore continues well into the future. He said the company has significant plans for exploration, and in 2025 there will be 10 drills on surface and another 14 drills underground, all searching for new ore. Exploration plans are also in place for 2026 and 2027, he said.
Gilpin said the exploration investment over the next few years will run between $70 million and $100 million.
"That's part of mining. It's positive. It's very important. Costs money, but it shows we're serious," said Gilpin. He added that as far as Vale is concerned there is potential for another 100 years of mining in Sudbury.
Len Gillis covers mining and health care for Sudbury.com.
