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Local Angle: Healthy Hudbay better in ever-shrinking world

During the so-called Great Recession of the late 2000s, several residents remarked that Flin Flon was left basically unscathed by the economic ravages occurring elsewhere in the world. It wasn’t entirely true.

During the so-called Great Recession of the late 2000s, several residents remarked that Flin Flon was left basically unscathed by the economic ravages occurring elsewhere in the world.

It wasn’t entirely true. The recession saw Hudbay suspend its Snow Lake operations, causing a ripple effect of layoffs that reached Flin Flon, and prompted the company to scale back its use of local contractors.

Nevertheless, the notion that Flin Flon is insulated from global turbulence – that we are an economic island – gained traction during those tough times.

But globalization is a very real force in the mining industry and, by extension, Flin Flon’s economy.

The acension of Donald Trump and his “America First” platform has politicized the issue of globalization down south. Here in Canada, mining globalization enjoys support from both the right and the left.

A central consequence of globalization – that mining companies are no longer reliant on any one region for their existence – carries both positive and negative implications.

For much of its history, Hudbay (formerly HBM&S) was owned by the multinational behemoth Anglo American of London.

While Flin Flonners never viewed Anglo American as a perfect company, its deep pockets always promised a level of security for Hudbay, particularly during periods of depressed metal prices.

The loss of those deep pockets in 2004, when Anglo American sold Hudbay to an obscure junior miner, triggered unease throughout Flin Flon. Some workers wondered whether the new Hudbay parent could weather the inevitable downturns to come.

Hudbay carried on just fine. In fact, since the company made essentially all of its money in Flin Flon-Snow Lake, our region received more exploration and infrastructure investment than it may have hoped for under Anglo American.

Still, Hudbay officials desired a broader portfolio. That’s why the company opened a copper mine in Peru in 2015 and is now poised to open another copper mine in the southern US.

Hudbay’s emergence as a multinational means that its focus is no longer exclusively on Flin Flon-Snow Lake. Northern Manitoba is just one piece of the puzzle.

Some view Hudbay’s multinational status as a negative for this region. They argue the company might have spent more money on exploration, and potentially found more substantive ore bodies, had all of its eggs still been in the Flin Flon-Snow Lake basket.

That is possible. It’s also possible that a Hudbay limited to Flin Flon-Snow Lake would be interested in the highly touted McIlvenna Bay deposit, located an hour outside Creighton, rather than discounting it as uneconomical.

The flip side is that small mining companies, such as the one Hudbay would be now had it not grown beyond Flin Flon-Snow Lake, are not always stable in this world of multinationals.

The former northern Manitoba mines of Tartan Lake, Puffy Lake and Bucko Lake, among others, closed because their parent companies lacked the financial wherewithal to endure periods of weak metal prices. Even when prices picked up, the mines remained shuttered.

As long as Hudbay is a multinational, it stands to remain a healthy company. It means Hudbay will generate revenue in other countries that can be invested in Flin Flon-Snow Lake though mine expansions (such as upcoming work at Lalor) and ongoing mineral exploration.

Globalization has indeed killed jobs in mining, as Flin Flon MLA Tom Lindsey has pointed out. It’s fair to ask whether globalization has, on the whole, been a plus for Canadian workers.

But globalization is a reality, and in this reality, mining companies need deep pockets and diversified assets to survive.

Against this backdrop, a healthy Hudbay – even a multinational Hudbay – is best for Flin Flon-Snow Lake.