TABLE OF CONTENTS Feb 2013 - 0 comments

Aggregates: Growing pains

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By: Andrew Snook
2013-02-01

As access to aggregates sources continues to move farther away from growing cities, larger municipalities looking to expand and grow their services and populations may find themselves between a rock and a hard place financially.

The cost of moving aggregates by land starts to cost as much as the value of the aggregates themselves after about 12 to 15 kilometres, according to B.C. Stone, Sand & Gravel Association’s executive director Paul Allard.
“The bottom line is every one of us consumes a truckload of gravel every year and it’s got to come from somewhere,” says Allard. “We consume about 52 to 55 million tons of aggregates a year in British Columbia—probably 40 or 50 per cent of it is used in lower mainland… with four million people you can do the math.”

Moreen Miller, CEO of the Ontario, Stone, Sand & Gravel Association (OSSGA) says these challenges are mostly regional and focus on both regional markets and regional sources.

In the Ottawa area and in Northern Ontario—Sudbury, North Bay, Sault Ste. Marie, for example—supply and demand are relatively consistent; however, in the Greater Toronto Area serious challenges present themselves.

The GTA consumes about 60 million tons of resources every year. As the closest sources are being consumed, industry is being forced to move further away into areas where companies have not traditionally mined.

“The GTA is experiencing what I think many North American cities have gone through in the past,” says Miller. “Cities like
Chicago and Cleveland and other cities where they have in fact run out of close-to-market resources and they have had to ship them by other methods. We’re in a bit of a transition so that will make it difficult in Ontario in coming years.”
Ed Persico, general manager of Dufferin Aggregates, a division of Holcim (Canada) Inc., says the combination of natural heritage features, land ownership and development plans make finding appropriate locations for resource extraction increasingly challenging.

Sterilization and moratoriums
One of the reasons certain aggregates are becoming more difficult to locate and extract close to market is sterilization, a problem that is pretty consistent across the country.

“People build things over aggregate reserves before we can extract the resources,” says Allard.
In Alberta, gravel sterilization and gaining access to aggregate deposits for infrastructure projects in more populated areas, such as Edmonton, is a growing issue.

“I put that on mismanagement of the resource in general,” says Teri Muhlbeier, executive director of the Alberta Sand and Gravel Association (ASGA).

She says poor urban planning and intentional sterilization (building homes on top of known deposits) has made some close-to-market reserves inaccessible.

Another area where aggregate removal is a challenge in Alberta is on river valleys. Although some river valleys have high-quality aggregates, most of them have moratoriums placed on them preventing extraction, says Muhlbeier.

Licensing and legislation
Navigating the permit process for producing aggregates creates additional challenges for the industry. In B.C., a mining permit granted by the Province of British Columbia does not allow a company to crush, screen or wash aggregates. Those permits are granted by the local municipality. Allard says the provincial government has generally been good about providing permits, as long as companies meet the criteria they have established, and most of the roadblocks occur at the municipal level.

“That’s something we’ll have to overcome somewhere down the road or it costs everyone a pile of money in the courts of B.C.,” he says.

Allard says industry is currently battling with the province to make aggregates a provincial reserve instead of a municipal reserve, so the decisions related to permits are left in the hands of the province and the fate of aggregate mines are not decided by “the council of the day.”

Persico says the licensing of aggregate operations has been characterized by a regulatory process that is lengthy, expensive and highly contentious.

He says the industry is one of the most heavily regulated in Canada and that pits and quarries are subject to a myriad of legislation that has not been harmonized in any way.

“Without a clear set of rules and a consistent process, both in terms of new licenses and day-to-day operations, the result is an often convoluted and inefficient process; one that propagates confrontation, rather than collaboration to find solutions that not only encourage and support economic growth but do so in a sustainable manner.”

Miller says she doesn’t see a lot of changes coming in regards to regulatory and legislative framework, but definitely sees the emergence of a stronger focus on corporate social responsibility.

“Many communities are stepping up and saying, ‘We want industries in our community that are focused on the long-term
environmental and social health of our community,’ and we’re interested in engaging in that debate.”

Turning a corner
One way the industry is trying to promote collaboration and sustainable practices over confrontation is with the formation of the Cornerstone Standards Council (CSC), created in August 2012 through the merger of the Aggregate Forum of Ontario (AFO) and Socially and Environmentally Responsible Aggregate (SERA).

“We are an organization with a national mandate to promote best practices and responsible sourcing up and down the aggregate supply chain,” says Lorne Johnson, executive director of the CSC.

He says there are a growing number of conflicts in Alberta, B.C. and Ontario between local communities and the aggregate
industry; or environmental groups and First Nations and the aggregate industry.

The CSC’s initial focus is in Ontario because it has been the “hot bed of conflict and descent” in the industry and is where the demand is greatest.

The CSC’s board is comprised of industry, environmental NGO and community representatives, as well as Thomas Mueller, president of Canada Green Building Council (CaGBC), and few charitable foundations. The CSC purposely created a board with a balanced diversity of interests.

The organization’s standards development panel is comprised of 14 individuals from various groups, including: industry-related companies, environmental groups, local communities, municipal representation, the Ministry of Natural Resources and Six Nations.

The panel has been working for the last year and a half to create consensus-based, voluntary standards.
“Our task is to help them reach consensus on standards that cover environmental and social issues for the aggregate sector,” says Johnson.

The CSC is also trying to design a credible but cost-effective verification system that will allow third parties to assess a company’s compliance with those voluntary standards.

He says he expects to release a draft standard for consultation with the next few months and has a goal of launching into Ontario with the standards and verification systems in the summer of 2013.

“Dufferin Aggregates supports CSC with the belief that a certification system that encourages operators to push the envelope, as they explore what responsibility looks like, will create positive change for the sector,” says Persico.

“It’s one of the most innovative things that we’ve seen this sector do in many years,” says Johnson. “It’s never easy sitting down with people you have a history of disagreement with and conflict. It’s often the least instinctive thing for people to do and yet it can pay off handsomely in terms of reducing conflict and building trust.”

He adds that it can also strengthen a company’s ‘social license,’ or right to operate in their communities. “If adopting these best practices and going through these transparent audits improves relationships with stakeholders and
communities, and results in fewer complaints and stronger ties between the aggregate companies and the communities, then I think we will have done our job.”

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