A deal has been struck that will move the processing of thousands of tires north of Ponoka.
Ponoka County council, at its Oct. 25 meeting, approved a deal with National Tire Recycling that will see the county offer up to $700,000 to help the company make the capital purchases it needs.
The contract, which is similar to one the county struck years ago with CCI Wireless to construct towers, will allow the company the leeway to buy other equipment necessary to process the 4,900 giant mining tires (GMTs) currently on the site located on Bobtail Road.
CAO Charlie Cutforth, when speaking to council, feels this is the best way to not only deal with a long-term problem the county has had, but also a chance to provide help to a company that needs a bit of a jump.
“We have a terrific opportunity here to deal with these GMTs and establish a going concern that can last for many years to come. As long as (National Tire) keeps progressing, this is a legitimate and real opportunity to do something and I’m absolutely convinced that the right people are now in place to do it,” he explained.
“We front-ended the funds for the necessary equipment to get the program tire processing done and the county is getting paid back through that contract, so we have no issues there. It’s just been figuring out how to deal with the GMTs and right now capital is the challenge.”
The agreement will see the county become National Tire’s lone and preferred creditor, through paying off what remains of the mortgage on the property and maintaining ownership of all the equipment on site until the money is paid off. The deal will span 15 years with annual payments estimated between $50,000 and $65,000.
Currently, the county has a contract with the Alberta Recycling Management Authority that pays it for the processing of passenger (program) tires — a deal worth $775,000 and the invoices are beginning to flow in. That agreement will also help pay the county back the various costs front-ended to National Tire, which the county is contracting to do the processing.
“There has been no down time and the operation is working well, so the goal is now to deal with the GMTs,” Cutforth said, adding other options including going after the owners of the former operation at the site just weren’t viable.
“One way or another, we have got a situation to deal with and there is no way to come out of this unscathed without going through a protracted legal process. Even then, any potential resolution could be years away.”
Another development that has so far proven beneficial has been discussions between the county and the owner of the GMTs, Suncor Energy.
Cutforth noted the company has accepted its responsibility for these and has indicated a willingness to work with Ponoka County and National Tire in getting the GMTs properly processed.
“Talks are ongoing and remain very positive with a great potential for them to become a long-term partner with National Tire,” he stated.
“The risk, however, is the need for Suncor and other partnerships to pay for the needed capital to handle these tires. That’s why the need to get a contract like this done.”