Thank you very much, Mr. Chair.
My name is Pierre Gratton, and I am president of the Mining Association of Canada, as you said. I'm here with my colleague, Brendan Marshall, who is vice-president for economic affairs.
To help frame the issue, it's important to differentiate between the two general categories of critical minerals at the heart of the supply chain security-sustainability nexus: rare earth elements and clean energy materials. Materials from both categories are listed on Canada's critical minerals list, but the policy actions required differ.
Nickel, cobalt, lithium, manganese and graphite are the predominant battery minerals presently. Canada is in possession of all these materials, some at production scale and others being developed. In the case of nickel, we have world-leading upstream and downstream nickel extracting, smelting and refining capacity. We produce the second-lowest carbon intensity nickel in the world. Relatively significant volumes of low-carbon cobalt are also produced in Canada. Manganese and graphite are produced in smaller volumes, while manganese, graphite and lithium advanced projects are all in various stages of development.
Being in possession of the minerals and metals needed for battery production, however, does not equate to having the capacity to produce value-added battery-grade materials. Canada does not as of yet manufacture battery-grade nickel, cobalt, graphite or lithium. All of its current production goes into other uses.
To position ourselves for success, we need government policies like enhancing targeted public geoscience, increasing incentives for exploration of critical minerals to find new mines, reducing bottlenecks in the regulatory approval process, and incentivizing the production of value-added battery-grade materials that address the entire value chain. We also need to avoid unintended policy outcomes such as climate change actions that put Canada's current and future off-grid mines at risk when those very mines supply the feed to grid-connected world-class smelters and refineries that export metals with the lowest carbon content in the world.
Beyond battery minerals, a recent McKinsey report on critical minerals and clean technology identified 17 materials, including uranium—of which Canada is the second-largest producer and without which getting to net zero is impossible—copper, zinc and steel—coking coal and iron ore—many of which are on Canada's critical minerals list. Without vastly expanded quantities of critical minerals, the desired carbon transition will never materialize, and the world is frankly better off on climate when they come from Canada, because of our carbon advantage.
No set of materials characterizes the security of supply dilemma more than rare earth elements, used in a wide range of essential battery, medical, energy and advanced manufacturing applications. To date, China has dominated the market for these key materials, controlling the majority of production and distribution, and that's creating an overreliance on one country for procurement.
Unlike battery minerals, Canada does not have a pre-existing supply chain for REEs and has fewer established strengths in this space than with battery minerals. Canada has deposits, with companies seeking to develop them, and it produces some rare earths as by-products from the smelting processes of other metals. Much of the rest of the world is similarly import-reliant on China and lacks a pre-existing world-leading mining industry to build upon.
While more work needs to be done to establish an REE supply chain in Canada than with a battery supply chain, Canada should not be deterred from leveraging its competitive advantages to create greater supply of REEs for domestic use and export. Doing so presents a significant opportunity for the country.
Development of the critical mineral strategy presents an opportunity to solidify a recognition of the essential nature of Canada's mining industry to the government's broader climate change, clean technology and reconciliation objectives. It will position Canada as a reliable, secure, sustainable critical mineral supply chain partner over the long term, while simultaneously increasing our domestic attractiveness as a destination for sought-after large-scale downstream clean-technology manufacturing investments. The sooner these signals can be sent to the market, the greater Canada's overall propositions for these investments become.
In the interest of time, we have distributed to you our key recommendations, which I will thus refrain from reading out to you. Brendan and I both look forward to your questions.
Thank you.