Editorial Looking to Elliot Lake’s future

No one likes to see an orebody come to an end, nor the hardship that imposes on the people who depend on the mines it engenders for their livelihood. But in this business, we all know that orebodies don’t continue forever. We can only be thankful for finding them and for the benefits they bring while they are in operation.

That’s why it comes as no surprise that Rio Algom has announced plans to shut down two of its uranium mines at Elliot Lake, Ont., and that Denison Mines plans to cut back production at its mines on the same orebody. The “big Z” conglomerate structure that hosts the Elliot Lake mines was a magnificent orebody, the foundation of Canada’s nuclear industry since the 1950s, but it is coming to an end.

In fact, were it not for long-term contracts with Ontario Hydro guaranteeing a profitable price for the companies’ uranium, these mines would have wound down some time ago. That guarantee, by the way, is paid for by all of Ontario’s hydro consumers — industries and individuals.

Just look at uranium prices. In 1970 a pound of uranium would fetch about US$6.30 on the spot market. By 1979 that had increased to US$43, but it has fallen steadily since then. By 1989 it had reached US$9 and today it is less than US$9. During that entire period the Elliot Lake mines have been insulated from the realities of the marketplace.

But mines that were profitable when prices were at their peak can’t continue to make money when prices fall below operating costs and stay there for any length of time. Contracts eventually come to an end.

Prices for uranium will come back, as the prices for all mined commodities do. But it may not be for some time. And when they do come back, it won’t be the mines at Elliot Lake that benefit. It will be the mines being developed today on Saskatchewan’s huge, high-grade uranium deposits in the Athabaska Basin.

There’s just no way Elliot Lake can compete with those prairie producers. At Saskatchewan’s Key Lake mine, for example, a ton of ore produces about 50 pounds of U3O8. Ontario mines, by comparison, win less than two po unds per ton. With grade differences like that, mining costs have very little influence.

The fate of Elliot Lake is not welcomed by anyone, but neither should it come as a surprise. The community itself was well aware that the mines would not last forever. Yet the opportunity for political grandstanding afforded by the mine’s closing couldn’t be ignored by some who claimed the companies are being irresponsible to their employees.

On the contrary, the town owes its very existence to the mines the companies built. But it is typical in this country which depends on mining for a substantial portion of its trade surplus that what the mines have given is taken for granted.

One report that talked about the woes being faced by residents of the community spoke with a miner who had moved his family to Elliot Lake six years ago, earned $65,000 a year, bought “the house of our dreams” for $79,000, and now would probably get very little back from his investment.

Workers in urban centres trying to find a place to live aren’t going to have too much sympathy. In places like Vancouver, Toronto and Montreal, $79,000 would barely rent a place to live for six years.

But did anyone give the mining companies a pat on the back for creating such jobs and paying those wages? More likely, the companies were only vilified for taking them away, even though the reasons for taking them away are beyond anyone’s control.

Mining can open up opportunities, but it can’t sustain whole communities indefinitely. It can’t do the whole job alone. If Elliot Lake hasn’t been able to put down roots that will survive when the uranium orebodies are no longer economic, the mining companies shouldn’t be made to feel they’ve let the town down.

Like children whose parents have grown infirm in their old age, mining communities like Elliot Lake are more than the sum of their antecedents. They have an obligation to their heritage to make the most of their future after those familial bonds are cut.

Uranium made Elliot Lake, but the town must continue to seek other means to maintain those social bonds that made the community more than the sum of its parts, more than merely an employer-employee contract. We know Elliot Lake and know, although it won’t be easy, that it will survive — perhaps not the same as it once was, but still a good place to live and raise one’s children.