Beyond Bathurst's mines
Published Tuesday October 14th, 2008
Growth Region diversifying its economy to overcome mining 's downfall, and it's succeeding
Three months ago, Ron LeBlanc and his brothers opened an upscale restaurant and martini bar on the waterfront overlooking Chaleur Bay.
The high-end restaurant in Bathurst caters to those with cash to spare, reflecting a modest economic resurgence in the region over the last few years.
A number of small technology and manufacturing firms have sprouted up, and the region's floundering mining sector has enjoyed a revival buoyed by soaring metal prices.
But the ongoing financial turmoil has caused metal prices to drop dramatically, once again putting into question the region's primary employer, the mining industry.
Experts predict the fallout from the United States credit crisis will dramatically reduce global demand for energy and raw materials.
LeBlanc says he's been too busy running the restaurant to notice much of an impact on the city.
"We haven't felt the crash," says LeBlanc, a native of the region who returned after stint out west. "We have been riding a wave since we opened."
But LeBlanc acknowledges people are anxious to see what kind of impact the collapse will have on Bathurst.
"Of course, we're concerned, but we're here for the long haul," he says. "We didn't just open this restaurant for two or three years. We want to be here for a lifetime."
While business is bustling at the waterfront restaurant, signs of trouble are already visible at Caribou Mines, 50 kilometres west of Bathurst.
Blue Note Mining Inc. reopened the lead and zinc mine in July 2007 with the hope improved technology and higher metal prices would make the site once again profitable.
This week, zinc dropped to 77 cents US, almost 40 per cent lower than its 2008 peak of US$1.28.
As recently as June, the company estimated it could continue operations at the site for as long as 15 years.
But now the company is negotiating with creditors, and Blue Note's chief operating officer John Martin says the company may close the mine until metal prices recover, putting about 200 jobs in peril.
An even greater problem looms on the horizon.
The region's largest private employer, Xstrata Zinc Canada Inc.'s Brunswick Mines, is expected to close by 2010. Some experts worry the mine could close even sooner given the drop in metal prices, putting 800 people out of work earlier than expected.
Losing the mine will put another 450 jobs at risk at Xstrata's Brunswick Smelter in Belledune, which has relied on Brunswick Mines since the 1960s.
Analysts predict the financial crisis will lead to a reduction in capital available for mining exploration, raising concern about what will happen once the known deposits in the region dry up.
Donald Hammond, executive director of Enterprise Chaleur, says the region has been working to develop a more diverse economy for more than a decade, and is well-prepared to overcome a downfall in the mining sector.
"I'm still positive, because we still have some expansion projects coming into the office," Hammond says.
The number of financial clients at Enterprise Chaleur, the region's development agency, continue to grow, Hammond says.
The agency is currently working on about 100 business and human resources files.
By comparison, Hammond says they were working on about 15 at any given time back in 2002.
Hammond says the jump is an indication the local economy is stronger, and more diverse, than it was then.
Judging by employment statistics, the region's economic performance has been mixed since the beginning of the new millennium.
Between 2001 and 2006, the unemployment rate dropped from 11.8 to 8.6 per cent in Bathurst.
But the population also dropped during the same period by 1.6 per cent down to 12,714. And Hammond acknowledged a portion of the growth in the Bathurst region has come from residents who head west for work, and return home with a larger disposable income, ready to consume more goods and services.
Yet smaller companies, particularly in the manufacturing and information technology sectors, have also helped encourage job creation. In 2008, the region had approximately 1,500 jobs in the manufacturing and value-added sector, compare with about 1,200 in 2004.
Such signs of diversified economic growth is good news for LeBlanc's restaurant. And like many in the region, the energetic entrepreneur is confident he will be able to weather the storm.
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