Industry Committee on April 17th, 2024

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

That's perfect. Thank you.

With regard to the technology itself—I understand that there might be proprietary know-how here—could you speak in layman's terms about how the technology works? What stage of the process of making aluminum is it primarily targeting?

[Jérôme Pécresse]

When you do aluminum, the first step is to mine bauxite. Typically, bauxite mines are close to the equator. Then, you put this bauxite in an aluminum refinery, where you do some processing, cleaning, washing and heating. From that bauxite, you produce alumina, which is what we are doing in Saguenay—Lac-Saint-Jean and Vaudreuil. Then, when you have alumina, you put it in a pot for an electrolysis process whereby, using a carbon anode, you produce aluminum.

You have CO2 emissions all over the chain. However, by far the biggest part of emissions is from the electrolysis process, with two sources. The first is the massive use of electricity needed for that process. For this reason, the source of electricity matters, and we have clean electricity in Saguenay—Lac-Saint-Jean. The second is the carbon itself dissolving, which releases CO2 into the atmosphere. This is what you are trying to tackle with ELYSIS.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Great. Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Gaheer.

Before giving the floor to Mr. Brunelle‑Duceppe, I would like to say something. As you can tell, colleagues, we are now hearing the division bells for a vote in the House. The bells will sound for 15 minutes. If the committee agrees, I think we can continue the meeting for about 15 minutes and we will have the time we need for voting.

[Some hon. members]

Agreed.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Mr. Brunelle‑Duceppe, the floor is yours for two and a half minutes.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Thank you, Mr. Chair.

The Conservatives vote for a motion and then complain that the motion passed. Welcome to our world, Mr. Pécresse.

First, I want to thank you for being here, Mr. Pécresse.

In April 2007, we were promised Alma II. There were even collective agreements negotiated based on the investments in Alma II, but it never came to pass.

Recently, ground was even broken for the billet casting centre in Alma, but the project then fell through and it has gone back to the drawing board.

[Jérôme Pécresse]

No, no—

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

Hold on, I am going to give you an opportunity to respond, but I want to ask my question first.

Can you reassure the people of Lac-Saint-Jean today and tell them that the billet casting centre will definitely be in Alma, and it will be done quickly?

[Jérôme Pécresse]

I want to give the committee the right information.

The billet centre is one of the first projects I looked at when I took up this position. What that project involves is carrying out projects that are downstream in the value chain, which is important. When I took up this position, work had already started on that project, but given the state of the art, it was going to cost about two times more than had been projected. In a case like that, I think a responsible manager's usual duty to their shareholders is to put the project on pause and try to see whether it can be resized while preserving the number of jobs.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

That was in the fall of 2023, is that right?

[Jérôme Pécresse]

Yes, it was in October, and I took up the position in September.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

So in the fall of 2023, you shelved the project so it could be redesigned.

[Jérôme Pécresse]

No, no. I arrived on October 23. I put the project on pause in November. We are currently determining whether it has to be resized, and, if so, how to do that intelligently. On the one hand, we want to preserve the objective of creating jobs. I want to point out to the committee that we are talking about several dozen jobs here. On the other hand, we are looking at how we can do that while creating value for the shareholders. That is what we are currently doing.

The project has not been abandoned, it has been put on pause. It is currently being reworked. I am optimistic that we will find a way to do that on terms that make sense for everyone. On the one hand, we have to think about the Rio Tinto shareholders, since, if we continue to invest in Lac-Saint-Jean, we also have a duty to stick to our budgets and carry out projects that make sense. On the other hand, we also have to think about our employees in Lac-Saint-Jean, because I know how important this project is for them.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

In November 2023, you said the project had been put on pause because it was costing too much to pour concrete in the winter, and the work would start back up in the spring. Today, you are telling us that you decided, in the fall, to redesign the project.

Is it possible to be transparent, for the people in the region?

[Jérôme Pécresse]

It's because we were pouring way more concrete than what was anticipated in the initial plan. You may say that's surprising, but it surprised me too.

The project isn't on hold. It's being revamped. What everyone's intending to do is find a way to do it in normally healthy financial conditions.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

We weren't told the same reason in the fall. Now you're telling us you've put it on hold in order to redesign it, but we were told in the fall that work would start up again as planned. You didn't want to pour concrete in winter because it was too expensive.

[Jérôme Pécresse]

You may have been told that, but not by me.

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

It was your company. I can show you the press release.

[Jérôme Pécresse]

Look, I—

[Alexis Brunelle-Duceppe, Bloc, Lac-Saint-Jean, QC]

There's an obvious lack of transparency here.

[Jérôme Pécresse]

No, there's no lack of transparency. Objectively speaking, the union partners from Saguenay-Lac-Saint-Jean are remarkably transparent.

Once again, we don't want to do projects that undermine our credibility. We want to do projects in a way that's smart for everyone.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Mr. Masse, go ahead.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

In Windsor, we had a plant called Nemak. It was a Mexican company. It received millions of dollars from Navdeep Bains and the Province of Ontario as well. Then they actually needed to cut the wages of the workforce in order to keep the investment to modernize auto manufacturing, with some new models. The Corvette was in there and a few other things for some of the components. They did this through research and development. Then the company, Nemak, decided to take that research and development and production and move it to Mexico. They threw the workers out. The workers actually had to go to court and, very recently, they got a settlement.

The reason I'm telling you about this is that I want to ask if there are any clauses in the grants and subsidies you've received from the federal and provincial governments that prohibit you from moving that technology and innovation to another country for manufacturing.

This took place at a time of a lot of angst in Windsor, especially when we subsidized the relocation of those jobs. I'm just wondering whether there are similar clauses, because I've been promised by the minister's office, most recently, that that type of agreement was a model to change things, but your agreement may not include that because it might have come before the time of the change. That's what I've been told.

[Jérôme Pécresse]

I need time to come back to you on that. Clearly our intention is to do it in Saguenay. We at Rio Tinto also have smelters elsewhere in the world, so I don't think we are prevented from developing and using the technology elsewhere in the world in our smelters. Clearly—