Contract workers are clearing out of Vale's Frood mine in Sudbury — an industry observer says will impact mining supply companies as the nickel giant tightens its belt on spending by shutting down its century-old mine.

A spokesperson with Vale said the company's own employees will move into the positions vacated by the contractors who have been working in the Frood section of Stobie mine

Vale’s announcement is not cause for alarm, said Dick Destefano, who is with the Sudbury Area Mining Supply and Service Association, which represents contract firms.

“I have not looked at the volume of work that our contractors do in there, but I would suspect that it would not be a major consequence, but it is going to impact them,” he said.

The Frood section at Stobie Mine is expected to close by the end of this year. No Vale employees will be laid off as a result of the shut down, however 85 workers will be relocated to other Vale operations.

Rich history

Although there aren't any job cuts, Rick Bertrand from the United Steelworkers Union said, members are still disappointed with the news.

“You've been working in a certain area for a long time, you build a lot of great relationships with your coworkers,” he said.

"It's like a small family and to hear that their area is being closed, it's always difficult to take.”

The company says Frood is the only area where it will suspend operations.

However, Vale spokesperson Angie Robson said it will also look for other ways to cut costs, thanks to a sharp decline in metal prices. Prices have dropped 50 per cent since 2006, when Vale took over Inco.

Locking the doors on Frood Mine will mean closing a chapter on the mine’s rich history.

"We've had two royal visits to Frood Mine,” Robson said.

“During the war, Frood supplied about 40 per cent of the nickel that went into artillary weapons."