South Yorkshire and the Nickel Belt: Parallels to Avoid

Lake in Canada's Nickel Belt near Sudbury

David Zylberberg

From at least 1929, the Nickel Belt region around Sudbury was the main operation of two large and generally successful mining companies, INCO and Falconbridge. Although there were a number of labour disputes, periodic layoffs and major expansions, the situation largely continued until the commodity boom of the mid 2000s. There was a spate of acquisitions and mergers in the international mining sector and the world’s second and third largest nickel companies received global interest. In 2006, Falconbridge was acquired by a Swiss Company, XSTRATA, while INCO became part of Brazilian VALE in a $19 billion dollar sale. Since these both involved the sale of Canadian companies to foreign investors, they fell under the regulation of the Investment Canada Act, which states that such takeovers must be a net benefit to Canada. The recently elected Harper government agreed to both sales with a list of conditions that have never been made public, although it is widely understood that both companies promised not to layoff any Canadian employees for 3 years.

Following two years of record profits in the Sudbury operations, the first major test of the takeover agreements came on February 9, 2009 when XSTRATA laid off 686 employees in Sudbury, despite it being only two and a half years since the purchase. This was followed by a few layoffs at Vale in early 2009 and the major strike of

2009-2010. Throughout there have been many requests for the federal government to release its agreements with the two companies, most notably by Nickel Belt MP Claude Gravelle and Sudbury MP Glenn Thibault. Despite this, they have yet to be made public or shown to members of parliament. The Conservative government has made clear that it believes loose regulation and foreign investment to be in the best interests of the Canadian economy. This was best expressed when Industry Minister Tony Clement told the Sudbury Star in July 2009 that if Vale had not purchased INCO, Sudbury was going to be ‘the Valley of Death.’ It would “not exist, it would have been closed down, it would have been liquidated if there wasn’t a buyer.”

Old Sheffield Knife Factory

As a historian, much of my research focuses on the current region of South Yorkshire and I keep thinking about parallels between its situation in the 1980s and the Nickel Belt today. South Yorkshire is a county of 1.3 million people in the north of England, best known for its coal mining and steel industries. It is a very scenic area with the Pennine hills in the west of the county and is widely known for the friendliness of its residents. Administratively, it was carved out of the old West Riding of Yorkshire in 1974. At that time its municipalities were amalgamated into the four boroughs of Sheffield, Rotherham, Doncaster and Barnsley. Each includes some former villages and pit towns so that these boundaries are not the same as the cities proper.

In the early 1980s, the British coal industry was still under government control while the manufacturing sector was being decimated by the difficulties of exporting goods from a country whose currency was overvalued due to petroleum exports. Margaret Thatcher’s Conservative government believed that many mines no longer needed to be kept open while also finding it necessary to curb the power of the National Union of Miners. In 1984, it was decided to close a number of pits in South Yorkshire, at which point the NUM attempted a national strike which in some regions lasted close to a year. South Yorkshire was the focal point with many of the largest confrontations taking place there. One example is the famous pitched battle at the British Steel Coking Plant in Orgreave, outside Rotherham. Following the strike, many more coal mines were closed. Many people would argue that closing the mines and other Thatcher policies were essential for Britain’s subsequent economic growth but this remains highly contentious.

25 years on, very little coal mining takes place in the region, most of the steel mills are closed, population has decreased and many places qualify for European Union aid to disadvantaged regions. The county was the recipient of much government investment designed to slow its decline during the New Labour years of 1997 to 2010. While the boarded up factories are a noticeable feature of South Yorkshire, its boroughs also have some interesting distinctions. Barnsley, Rotherham and Doncaster rank in the bottom three among British municipalities for inhabitants’ job skills, Doncaster is considered to have the worst-run municipal council on the island while Rotherham is known for having both the highest obesity and worst eating habits. Politically, a sense of regional grievance developed in the 1980s with the impression that decisions were being made in the interests of southern England without concern for the industrial north. This is reflected in a continued allegiance to the Labour Party, who currently hold 13 of the county’s 14 seats, with Liberal Democrat Nick Clegg representing the most prosperous end of Sheffield.

The two situations are not identical as the exact government role varies and geological differences matter in mining regions. However, there are a number of lessons from South Yorkshire that could apply to the current situation. The most important one is to be aware of the regional implications of macroeconomic policy. When the coal mines closed, there were not new jobs to replace them and the national growth that has occurred since was heavily concentrated in London and south-east England. This meant that those who immediately suffered from policy changes were not the later beneficiaries, helping to create a political culture of regional hostility and poverty. Sudbury’s mines will not close in the near future but jobs are being lost in reorganization. And while Sudbury’s mining service sector has the potential to benefit from new operations around the country, what benefits occur from Harper and Clement’s liberalization of ownership are likely to be concentrated in the financial and corporate centres of Toronto and Calgary. This runs risks of political regionalisation in a Northern Ontario whose 9 MPs currently include 7 New Democrats and 1 Liberal, with the only Conservative more than 1200km away in Kenora-Rainy River. As well, if long-term stable well-paying jobs are not preserved in the Nickel Belt, or new ones developed, current policies of economic liberalization may be detrimental to Canadian quality of life even if they increase GDP or contribute short-term employment in other centres.

Hillsborough, near Sheffield

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