Cameco and indigenous development case study

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A short case study outlining Cameco’s business relationships with Indigenous Peoples in northern Saskatchewan. At the time this was written Cameco, and the Saskatchewan Uranium mining industry, was a global leader in integrating indigenous business and economic development into the overall development of the mining industry in the region.

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Cameco and indigenous development case study

  1. 1. Cameco in Northern Saskatchewan Case Study © © Wayne Dunn & Associates Ltd 2001 info@waynedunn.com Cameco is the largest uranium producer in the world, with mining activities in Northern Saskatchewan. Early in the development of these properties Cameco recognized that business success was inextricably connected to its ability to work effectively with the residents of the area, ensuring that they received meaningful and sustainable benefits from mineral development. Northern Saskatchewan has a total population of 38,000 people living in many small communities scattered over 250,000 square kilometers. Demographically, the north’s population is 75% aboriginal representing the Woodland Cree, Dene, and Metis Nations. The majority of the aboriginal population of northern Saskatchewan are treaty Indians (First Nations) living primarily in communities on treaty reserve lands. The remaining aboriginal and non-aboriginal population lives in small settlements and villages under provincial jurisdiction. Cameco’s management knew that failure to work effectively with Northern Saskatchewan residents would add cost and complexity to all aspects of the permitting and licensing process and could even undermine the sustainability of the entire industry in the region. People were not prepared to support the mining development unless it provided them with meaningful benefits such as employment and business opportunities. In response, the firm developed a complex array of economic, social and community relations programs, with a strong focus on employment and business development. Cameco has facilitated the integration of aboriginal northerners by giving priority to northern hiring, requiring contractors to meet northern hiring targets, maintaining a seven-day in, seven-day out work schedule and a network of northern air traffic pick-up points for employees. This system makes it convenient for northern employees to work in the mines one week and remain in their home communities the next, often participating in trapping, hunting and other traditional activities when they are not at the minesite. By November 1999, 450 aboriginal employees, representing about 45% of the site operations workforce, made Cameco one of Canada’s leading industrial employers of aboriginal people. Northern people employed in Cameco’s mining operations collectively earn approximately C$20 million in direct salaries and wages every year, and the majority of this employment income remains in the north. Salaries are attractive (Cameco employees at its Key Lake minesite average $56,000 per year including benefits) and most communities have little other permanent wage based employment. Cameco has cooperated with various agencies representing federal and provincial governments, and First Nations and Metis organizations to develop a proactive, long-term labour force development strategy. In 1999, Cameco invested more than a million dollars in post-secondary education and training support, scholarships, education awards programs, summer student employment, science program sponsorships, school site tours, school-based athletic programs and career information initiatives. All were designed to encourage northern aboriginal children to stay in school, pursue post-secondary training and consider occupations in the mining industry. As a result of these efforts, Cameco is beginning to experience substantial gains in the employment and advancement of aboriginal people in the management/supervisory, technical/professional and trades occupations. As of September 1999, Cameco directly employed 20 aboriginal managers/supervisors, 42 aboriginal employees in technical/professional occupations and 40 aboriginal tradespeople. This case was originally written in 2001 and has been updated to show procurement in 2011
  2. 2. 2 Chart 1 Cameco Northern/Aboriginal Purchases In addition to employment Cameco systematically promotes northern business development, giving preferential consideration to suppliers with northern and aboriginal involvement. Volumes of northern purchases have increased by 880% over eight years, rising from about C$10 million in 1991 to more than C$90 million in 1998. Northern procurement now represents a very substantial part Cameco’s total purchases in support of its northern Saskatchewan mining operations. Northern Resource Trucking (NRT) is one example of a successful northern aboriginal business nurtured by Cameco’s northern business development strategy. NRT’s 71% aboriginal ownership consists of nine First Nations and three Metis communities representing the northern Dene, Woodland Cree and Metis people of northern Saskatchewan. Today NRT employs about 140 people, has annual sales of C$18 million and has a permanent office and transit warehouse in the north. Another example is the Mudjatik/Thyssen joint venture, owned by Thyssen Mining Construction Ltd. and the Mudjatik partnership, a consortium of northern aboriginal partners. In 1999 they provided over C$39 million in underground mining and construction services to Cameco, employing more than 100 aboriginal people in some of the highest paid industrial jobs available. Other examples include Tron Power, wholly owned by the English River First Nation, which had Cameco contracts worth more than C$9 million in 1999. Cameco has developed extensive community consultation and involvement procedures and has even appointed Chief Harry Cook, Chief of the Lac La Ronge First Nation, the largest First Nation in Saskatchewan, to Cameco’s Board of Directors. The efforts of Cameco and other northern Saskatchewan mining firms have precipitated a fundamental shift in the overall development capacity of northern Saskatchewan. The education level of the area is improving and northern aboriginal peoples have many more professional and managerial opportunities than ever before. The revenue and associated salaries enables communities to be more financially self-sufficient and enhances the overall economic capacity. While, the short-term economic viability of the region is still very dependent on the mining industry, over the long-term the increased capacity will make it easier to identify and develop alternative economic activities. Wayne Dunn & Associates Ltd. 2457 Bakerview Rd. Mill Bay, BC CANADA V0R2P0 Tel: +1.250.743.7619 Fax: +1.250.743.7659 info@waynedunn.com www.waynedunn.com 10.6 16.7 $22.8 $27.9 $44.5 $44.1 $74.5 $93.3 0 10 20 30 40 50 60 70 80 90 100 P u rch a ses in C A D $ M illio n s Year Cameco Northern/Aboriginal Purchases
  3. 3. 3 Ten Years Later – an update from 2011 Cameco’s northern procurement has evolved into a Northern Preferred Supplier Program that has purchased over $1 billion in goods and services from local vendors and suppliers in northern Saskatchewan since 2004. In 2011, a new record - over $390 million to northern businesses, who provided 74% of all services to our northern mines.

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