Thanks, A.J.
Members of the committee, good afternoon.
As we look to the future, Vale's base metal strategy is to shift 40% of our total class 1 production to the emerging EV industry to meet growing market demands for our products. Nickel, copper and cobalt are important components of the EV supply chain. To meet Canada's aspirations to be a North American and global leader in the EV battery and critical minerals market, we must address several issues.
First, while Canada is well positioned with its nickel reserves and producing mines, we must bring more supply to the markets to meet demand for EV vehicles. Meeting the demand will be a challenge, particularly for nickel and copper. Bringing new nickel, copper or cobalt deposits online is capital intensive and it takes a considerable amount of time. Even in the most stable and favourable mining investment jurisdictions like Canada, it takes at least 10 to 12 years from the discovery of a viable deposit to reach commercial production.
We also need to develop strategic, long-term partnerships with leading academics, institutions, customers and OEM producers that support long-term and significant investment. These innovation and supply chain ecosystems are essential and have already begun to formulate.
Coordination across government jurisdictions is also essential, as the supply chain will need federal, provincial and local coordination to respond to this generational opportunity. Provinces such as Ontario and Quebec are focusing significant attention on this, but we cannot stress the importance of multi-level government coordination that provides new investment, policy certainty and permitting support.
Finally, I would like to discuss the localization of supply chains. While the battery supply chain is still formative in Europe and North America, automakers prefer a localized supply that helps them lower their scope 1 and scope 2 emissions and provides security of supply. It is great to see the recent announcements surrounding investments of various supply chain actors in Ontario and the province of Quebec.
Moreover, COVID and recent events in eastern Europe, as well as supply chain disruptions in Canada, reinforce the need to reduce supply chain risk. We believe this pressure has had a lasting impact on emerging battery supply chains and we must ensure that we build in sufficient resiliency in order for Canada to be the strategic supplier of choice.
If we were to leave you with one key message, it would be to focus your attention and efforts on increasing the upstream production and tonnage needed to support battery electric vehicles. While hundreds of billions of dollars have been spent on developing the battery supply chain, Canada must make significant investments to expand the raw material supply of battery materials. Given the lead time needed to bring new mining capacity online, such action must start now and it must be supported by prices that stimulate private investment. Without the battery metals in the right form, creating battery hubs with domestic raw materials will be very challenging.
Thank you very much. We welcome your questions, and we are happy to provide any further information that the committee requires for this study.