Industry Committee on April 24th, 2023

[Catherine Cobden]

I would only add that, in steel, we need to choose our collaboration partners carefully, given the broader context that we have in steel around unfair trade and practices, which can apply to the supply of recycled input materials into our processes.

As long as we're mindful of the broader perspective in choosing those collaborations—and I think the U.S. is a very good example of working with a key ally and integrated economy player in the North American context—this is a great suggestion. However, for us, we would have flags for with whom, how far and how wide we may take collaboration.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Ms. Lapointe.

Mr. Lemire, you now have the floor.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Mr. Mugerman, Geomega built a demonstration plant in Saint-Bruno‑de‑Montarville to recycle rare earth magnets. You also have a partnership with Rio Tinto to recover bauxite residues, in Boucherville.

Why is it so important for Quebec and Canada to succeed in recycling these metals, in a market that's largely dominated by China?

[Kiril Mugerman]

Mr. Lemire, just to clarify, we haven't yet built the permanent rare-earth magnet recycling plant yet. We are building it now. That's an important distinction to make.

Rare earth recycling only began about 10 years ago. In 2012, China wasn't even recycling rare earths. In 2018, about 30% of rare earth production was from recycling. That shows that if you take concrete action, you can create a rare earth production industry just from recycling. It's very significant.

We are now making an effort to bring the electric vehicle industry to Canada. However, it's not just a matter of bringing electric motors built in China to Canada; everything should be made here. To make all the components, rare earths are essential; for rare earths, you need oxides. Right now in Canada there are no rare earth mines that produce final oxides. Without enough mines, that option isn't available. So the best and fastest approach is recycling.

Not only that, but in China today, recycling is not done properly. That's not what we want to do here. We therefore need to develop better methods that will not create toxic or noxious residues. As you mentioned, we have a plant on Montreal's South Shore. We would never consider installing a rare earth recycling plant that pollutes the surroundings. Our plants do not create residues. Our environmental requirements are so strict that if we can develop reasonably-priced processing plants, we would be able to convince the rest of the world to use the same methods as us.

Bauxite residue is an interesting case in point. In Quebec, we have been extracting alumina, from which we produce bauxite residue. Bauxite residue contains several metals, including alumina, iron, rare earths, scandium, titanium and several other metals that should be recovered.

If the residues just sit there for years and don't contribute any value, then we are losing out. We now have the opportunity to create a circular economy, which would give us a chance to create new sources of value.

I think that Canada can become a world leader in mining residue recovery.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Definitely.

Thank you for your answer.

How important are scientific research and grants for your research?

One example is the Horne Smelter, here in Quebec, which could develop links with institutions like the Centre technologique des résidus industriels, the CTRI, or the Université du Québec in Abitibi-Témiscamingue.

Decentralization, through matching with a potential mining innovation zone, or even a Canadian government of centre of excellence for critical mineral batteries, could further integrate our industry.

Do you also think that you would need support from leading scientific centres?

[Kiril Mugerman]

I think that what's required is a collaboration between industries, research centres and universities.

Industries have very different goals from research centres. Research centres offer their assistance, whereas industries contribute their problems. When industries have a problem, it's more likely that research will more quickly and more directly get to work on developing the final product, process or procedure.

Universities play a different role. They contribute a lot of knowledge and train new students and new researchers who will eventually work in the research centres and in industry to move things to the next phase.

In short, investment is very important, because traditional industry doesn't invest in new and completely different methods. They invest in improving existing methods by 5 to 10%, whereas research and development centres like ours try to completely change things. That's the advantage.

What we are trying to do is completely change the way residues are processed and perceived, how metals and recycling residues are processed, and how the reagents and acids needed to produce metals are used without generating the problems of the past 50 years. There was processing, but the residues still contained acids. That's something we no longer want.

It's 2023 now. The approach to metals extraction is different.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

It certainly is.

I've run out of time. Thank you for these very constructive answers.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Lemire.

Before I turn to Mr. Masse, I just want to point out that I've heard a lot of noise around this table and in the room. Please, colleagues, and everyone present, be mindful of the noise when we have witnesses testifying.

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, Mr. Mugerman, for your intervention. I'm sorry I missed it. I had to take an important call, so I apologize.

I do want to follow up on one topic you mentioned—wind turbines and recycling. In my area, Windsor-Essex County, there have been a significant number of wind turbines added over the years. I don't think there's really been much of a plan.

Ms. Cobden, you might have some comment on this too. Logistically we've had to bring them in. They're huge. I'm just wondering how far in advance we need to plan for recycling. The way we brought them in was via ship, rail and trucks. I'm wondering whether or not we should be looking at a process of recycling them onsite versus shipping them out somewhere else.

Maybe I can get both of your opinions on that. I never even thought of that. I think they have a 30-year or 40-year life cycle, or something like that.

[Kiril Mugerman]

The wind industry is a very interesting sector. You are absolutely right that it's appearing everywhere. We need to understand that for wind turbines, the life cycle is anywhere from 15 to 40 years. It depends on the type of wind turbine, whether it's offshore or onshore. From our discussions and working with the wind industry, we see that they have plans and they do have companies internally that are already developing the process for recycling.

The recycling is fairly straightforward. They dismantle it. They want to recycle the blades. They have their own R and D groups that are working on how to recycle those blades and what to do with them. Of course, then it's a question of who pays for all of this. We find that if you look within the structure of the entire wind turbine, you see that one of the components that has the most value is the magnet, where the rare earths are. Of course, they do want to capture that magnet and to use companies like us to go to recycle that magnet and get paid for it, which covers the cost of dismantling.

Of course, for them it's very important as well to reuse the base, because that base gives the roots for the next one they will put in 20 years later. They have an integrated circular economy, but they are missing that key piece of where the magnets will go. If the magnets go into steel recycling, just for the steel value they don't get paid as much. What we are trying to offer goes hand in hand with the steel recycling industry, because for them it's very important to capture the steel, but the steel industry cannot pay what a magnet recycler will pay for that.

[Brian Masse, NDP, Windsor West, ON]

Okay, that's a great start. Thank you.

Madam Cobden, please.

[Catherine Cobden]

I would add to that if we really want to ensure that we capture value when we're recycling the materials at end of life, we should ensure that we're using the highest quality materials within it. We were talking about this in the prelude to our appearing here today, just on the margins of the meeting.

For example, Canadian steel—all of the benefits of Canadian steel, not just its jobs but also its strength, its inherent content—would help support the recycling of those turbines, etc. As we are decarbonizing, we'll have more and more need for that material that's being returned into the recycling loop.

At the end of the day, if there are additional minerals in there, we have to make sure that we have enough value overall to be extracted in order to go at those additional minerals.

I would like to put in a plug that we are mindful about where our raw material is sourced from as we're building those turbines. It's not just for turbines, but solar panels and what have you, that we need to ensure that we are thinking comprehensively about the circular economy and, frankly, rewarding those who are participating in that and giving those higher value streams an opportunity to develop.

[Brian Masse, NDP, Windsor West, ON]

With that, does anybody know if they can do on-site recycling there of the wind turbines or do they collect them and then...? I'm just wondering because we have hundreds of them. They're all going to sunset around the same time.

Are they melted down? Are they broken down? Are they chipped?

I'm just curious about the logistics of this in terms of the....

[Catherine Cobden]

I'm not sure what they would be doing on-site. That is maybe a really good question for the Canadian Association of Recycling Industries.

From our vantage point, we would use that steel because you can melt down steel from anywhere and basically, through metallurgy, repurpose it with additional properties for use in other products. That goes on in an infinite loop. Every time we melt steel, we improve the recipe or make the recipe according to the next product, and we just keep going like that.

[Brian Masse, NDP, Windsor West, ON]

Okay.

Please go ahead.

[Kiril Mugerman]

Turbines are usually dismantled on the spot. There are companies who specialize in doing that. Again, we are only entering the end of life for some turbines, considering that a large volume of turbines really started appearing around the early 2000s. By the way, those originally did not have magnets; they were done with a different technology, because did not have rare earths.

Once they are dismantled, the blades, for example, will go through a specialized process where they are shredded or used for some sort of composite material or additive materials. The steel will get processed and get shipped towards the nearest recycling centres. There are steel scrap centres everywhere. Then, what's happening now more and more whenever there are magnets is that the magnets are usually collected separately into containers and get shipped to a company that can recycle the rare earths.

[Brian Masse, NDP, Windsor West, ON]

This is really interesting. I know I'm running out time, but when the Gordie Howe Bridge was being built.... In fact, my first public meeting was in 1998 about building the new bridge. They are finally it. Also, we did a whole new route to the new bridge. What we didn't do was plan properly. We actually shipped dirt hundreds of kilometres away when we could have actually had a proposal to save.... I was working with the contractor and the government just wasn't interested at the time. It was too new. We could have used it for trails and other earth works and stuff and not put it into a landfill, and also not have the trucks with all of their carbon emissions. So we're importing dirt from somewhere else and shipping it out another way.

I know I'm out of time, Mr. Chair, but I'm looking for a lesson to be learned from that, because I don't think anybody has really thought it through, other than for what was just said.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Masse.

That concludes our first round. We're moving into our second round. I recognize Mr. Perkins.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you, Mr. Chair.

My first question is for Ms. Cobden.

Your members are obviously competing on pricing here in Canada with a lot of imported Chinese steel. The recycling process that you outlined a moment ago to Mr. Masse, I presume adds some cost to the process. It's a cost that, I'm assuming the Chinese steel isn't incurred in the home country, China.

[Catherine Cobden]

I would add that the Chinese steel isn't as reliant on the recycling process as we are in Canada. We have really embraced it. What that basically means is that our production is about five times less, I think, greenhouse gas intensive overall than Chinese steel.

Again, another import point I was trying to make to Mr. Masse is that's why we need to be mindful about what types of steel we're putting in at the beginning at the front end, and at the back end when that we're recycling close to home where we're geared up to take that steel.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Is that also because of the metallurgical coal we use? Is that of a higher grade than what they're probably using in China to produce...?

[Catherine Cobden]

This is a different part of the production processes. We use met coal and iron ore in a different type of facility from the electric arc furnace, but of course that's another factor in why we are so much better from a greenhouse gas perspective.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you.

My next question is for Mr. Mugerman.

Regarding rare earths, it sounded like you were describing a process that is in development, or that you have created for extracting rare earths right now from our electronics and that kind of thing. Right now we're very dependent on China for rare earths in all electronic manufacturing.

Have you developed a process where we can mine recycled materials and reduce our dependence?

[Kiril Mugerman]

Correct. We started developing a process around 2017 for extracting the rare earths from the magnets that go pretty much into all of the speakers you see in this room and into wind turbines. Those magnets are used more and more in everything. Getting the rare earths out of the magnet and back into a new magnet is the loop they are trying to close.

We are not going to be producers of magnets; we are just going to be getting the waste streams from where those magnets are, so that we can get the rare earths out and not have to depend on bringing those rare earths from China.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Are you doing this already in a production facility?