Evidence of meeting #26 for National Defence in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was mineral.
A recording is available from Parliament.
Founder, Centre for International Governance Innovation, As an Individual
I would say control is a complex thing. As I said, FDI should be carefully monitored, not only for economic spillovers but for security spillovers.
Owning the minerals does not in and of itself give you leverage if you do not own the ability to turn them into something. It is the beginning of the potential for leverage, but in and of itself, it's not leverage.
Conservative
Director, Energy, Natural Resources and Environment, Macdonald-Laurier Institute
I wish I could say it doesn't depend on the context, because sometimes people just need a number they can work with to be predictable, but it depends on the context. I think the most susceptible are junior miners and small projects. If they are looking for investment and would take it from anywhere they can get it because they might not go ahead if they don't get some investment from some kind of investor, then they're susceptible to Chinese investment.
The other aspect is that for some of the niche metals we talked about, China has a basic monopoly on processing and refining. At some point, you have to work with some Chinese interests because they're going to be the only person taking your offtake.
I don't want to do this on a case-by-case basis, but 20%.... I think Australia does 10% as a threshold. It's very different depending on the size and whether something is publicly owned or privately owned.
This is absolutely a way the Chinese have influenced junior mining operations. There's another consequence of that that people are concerned about. If you had a project, for example in the Arctic, and there was Chinese influence, they could use their leverage to do monitoring or jamming or have some presence in the Arctic that might interfere, for example, with NORAD.
Conservative
Scott Anderson Conservative Vernon—Lake Country—Monashee, BC
Thank you very much. These are more broad-based questions.
Mr. Boyd.
Chair, Board of Directors, Agnico Eagle Mines Limited
I agree with Heather. It's about context, and a lot of this will depend on the opportunity and the deposit, and the importance of the deposit to the country. We're the beneficiary of a foreign investment review that resulted in us owning a project on our northwest coast, which we talked about, at Hope Bay. This was important for ensuring that that property, given its location and its benefit to the region, was in Canadian hands. We're the beneficiary of that.
When you look at critical metals, though, you have to balance the need for capital and the need for skills in the context of whether a project can be an important part of the country's economic future. You have to weigh and measure that. As the government looks at that, it should also take into consideration the skills that exist in the country in moving those particular projects forward.
It also bears on where the country plans to invest in infrastructure. As we open up new areas, we should be mindful of where the critical projects are, of the impact the infrastructure is going to have on investments, of making them more investable and of understanding where the ownership currently lies with those major projects.
Conservative
Scott Anderson Conservative Vernon—Lake Country—Monashee, BC
Mr. Boyd, what is the one thing the federal government can do to encourage companies to invest in mining in the north?
Chair, Board of Directors, Agnico Eagle Mines Limited
Mining is difficult and challenging, particularly in the north, so I think it's to improve certainty. The government has gone a long way in moving the permitting and approval process forward in a timely fashion. If we look at something like our Hope Bay project and the restart, it's taken multiple years and we still have permits, so it's tough.
It's about anything we can do to work in partnership with the government to understand the opportunity, but as we see it, the key to unlocking it all is going to be skills. It's not only about procuring skills from outside of Canada, but also about training to make sure we have the skills to realize the potential.
Conservative
Scott Anderson Conservative Vernon—Lake Country—Monashee, BC
Mr. Boyd mentioned regulatory certainty. Mr. Balsillie, could you pick up on regulatory certainty as a driver of economic certainty?
Founder, Centre for International Governance Innovation, As an Individual
Of course, economic certainty is critical, but you also need the certainty that you have the ability to turn it into something that gives you the economics and leverage you're looking for. Regulatory certainty for a mine is one thing, but the regulatory certainty that you're creating products that are anchored into the global supply chains and value chains is equally important, or you're only competing on the commodity part of the economy.
Conservative
Scott Anderson Conservative Vernon—Lake Country—Monashee, BC
Dr. Exner-Pirot, how exposed are northern mineral projects to single points of failure, those being roads, ports, one power source and those sorts of things?
Director, Energy, Natural Resources and Environment, Macdonald-Laurier Institute
I'm sure Mr. Boyd can answer this too, but I will say there's one operating mine in the Yukon right now. It's a silver mine, so it's not a critical mineral that's obviously important to the economy. Because Yukon is lacking in energy infrastructure, especially electricity infrastructure, they've had to curtail their production many times this winter, and last winter as well.
Electricity is maybe the main bottleneck to expanding northern mines right now. Probably for Agnico—and Mr. Boyd can answer this—they bring in their own energy. They bring their diesel generators, but for some smaller projects, if that's not possible or if there are some policies that prevent relying on diesel, that is absolutely an inhibitor. I can think of a copper mine, Casino in Yukon, for example, where access to electricity is probably the biggest barrier for being able to move that project ahead.
Conservative
Liberal
The Chair Liberal Charles Sousa
I'm sorry, Mr. Anderson.
Thank you very much to all of you.
I'm going to pass it over to Viviane Lapointe for six minutes, please.
Liberal
Viviane LaPointe Liberal Sudbury, ON
Thank you, Chair.
I'd like to welcome Dr. Mykytczuk to the committee and thank her for her appearance here this morning.
Last week, many of us attended PDAC, the large mining conference that was held in Toronto, and the federal government announced the creation of the Canadian digital core library, which will digitize decades of drill core samples using advanced technologies and AI.
Can you tell us, from a strategic perspective, how improved access to this kind of geological data helps Canada better understand and secure its critical mineral resources?
Executive Director, Goodman School of Mines, Laurentian University
I'd be happy to answer that, MP Lapointe.
The announcement of the partnership, with CDL and Laurentian University being the academic leads on that project.... It is a very exciting nation-building project. We have millions of metres of drill core that has been, in many cases, held in private company libraries—some in the Canadian geological survey, the Ontario geological survey and other provincial repositories—but there has not been a large effort to digitize that data and make it available.
This project is ambitious. It is looking to scan that inventory of core, aiming to scan a million metres of core in the first year using a variety of multispectral and other scanning technologies to provide a broad cross-section of elemental characterization on the drill cores and to make that data available to digital and AI analysis. That will allow for us to go back to a lot of the deposits that were drilled maybe decades ago and overlooked. It will save per project even hundreds of thousands of dollars for drill campaigns that would otherwise still need to be done in areas where we may already have a lot of knowledge wrapped up in drill cores.
It will position Canada to very quickly reassess its potential for new mining development and to go back and look at core that was never analyzed for other elements that are now on the critical minerals list, like rare earths and others that might be associated with that mineralogy. It is a very important project and one that will quickly help Canada add to its knowledge of its mineral reserves.
Liberal
Viviane LaPointe Liberal Sudbury, ON
Thank you.
We know that Canada has the geology for many critical minerals, but a lot of the refining and processing still happens abroad. We heard from Vale, which was a witness here in a previous week, and it said it has to import nickel to keep its refining operations going in Sudbury.
In the geopolitical situation we are in now, what risk does this kind of dependence create for Canada's ability to secure the materials needed for its defence and energy systems?
Executive Director, Goodman School of Mines, Laurentian University
Is that also for me, Viviane?
Executive Director, Goodman School of Mines, Laurentian University
I'm sure Sean and others will speak to this as well.
The capacity we have is still underutilized. In the example you mentioned with Vale in Sudbury with our two smelters and the nickel refinery, there are times when there's not enough feed going through the process. We are starting to lose midstream processing capacity at operational mines. We are not building them fast enough. We are still relying, and have relied for decades, on exporting a lot of the raw materials and concentrates elsewhere.
There is a huge potential to maximize the usage of existing facilities by helping those facilities diversify processing capability to allow for a variety of custom feeds, whether they're for recycling or secondary material recovery, to make sure that our existing capacity and operations are used fully. They could then accept different types of materials during downtimes. That, I think, is a key piece for us to look at in shoring up domestic supply chain and midstream processing capacity.
Liberal
Viviane LaPointe Liberal Sudbury, ON
Mr. Boyd, I had an opportunity to talk to some of your colleagues at Agnico Eagle Mines last week at PDAC, and I want to applaud Agnico Eagle for being a partner in that drill core library that we were just mentioning.
I want to ask a question. We know that climate change and increased accessibility are changing the strategic landscape in the Arctic. How does that shift affect the urgency of strengthening Canada's presence and economic activity in the north?
Chair, Board of Directors, Agnico Eagle Mines Limited
There's a definite sense of urgency around geopolitical concerns, obviously, and sovereignty in the north. As we look at global warming, it's certainly going to open up the opportunity to move around and create access. The challenge we have now, when we think about northern operations, is that we're dealing with a two- to three-month barge season. You effectively have to get your materials and energy supplies up in that small window. As that window broadens, I think it creates more opportunity. It does make it difficult in terms of road building, permafrost and construction. I think that has to be built in.
When we look at the question of how to take advantage of what we have, it's important, to your last question, to use existing infrastructure. The core scanning is a tool. When you think about it, a lot of the old mines were left with tremendous potential, with holes undrilled, due to commodity prices. When you look at the gap between what we're promising the world with our ability to deliver critical metals, there still needs to be lots of deposits discovered. A quick way to get started is to revisit old mining districts. Not only are you benefiting from infrastructure; you're also benefiting from the knowledge of deposits and using core scanning as a tool, and from dealing with and being able to leverage off of community partnership as well.
You have to build all of this into the mix when you're looking at economic opportunities and mine building. Mine building isn't as much a science as an art, particularly when you're working in the north. It will take tremendous partnerships, but using a lot of the history of what we've already built in Canada is an important start.
Liberal
The Chair Liberal Charles Sousa
Thank you, Ms. Lapointe.
Monsieur Savard-Tremblay, you have up to six minutes, sir.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
Thank you, Mr. Chair.
I'd like to thank all the witnesses for being here and for their presentations.
Mr. Turgeon, I've heard a number of presentations, and I think it makes sense to talk about how to optimize infrastructure, update it and improve how it operates. Clearly, the use of critical minerals set out in the defence strategy is crucial and will be a daily challenge. If I understood you correctly, you support that use, but not at the expense of human beings, the air they breathe, the water they drink and their rights.
What exactly are we talking about when we talk about industry and critical mineral extraction by a Canadian company? I'd like you to talk about that, because it seems so easy to register as a business and begin operations, claiming to be of Canadian origin. Having a post office box gives businesses the benefits of a flag of convenience, which could include tax benefits and even a listing on the Toronto Stock Exchange.
What are we talking about? Is it really beneficial to have a business that claims to be of Canadian origin but is actually foreign-owned? Setting aside the human side of things, is that beneficial from a strictly financial standpoint? Is it actually profitable?
Lawyer, National program Co-Lead, MiningWatch Canada
Thank you for your question, sir.
You're absolutely right: We need to define the terms. I think today's meeting is a chance to talk about critical minerals. One of the witnesses here today talked about how one of the biggest companies in the world does not extract critical minerals, or very little, at any rate. Critical minerals are not Agnico Eagle's main line of work; it actually produces gold, which is not on the list of critical minerals.
Let's review the definition of critical minerals that was established under the Canadian critical minerals strategy. The real issue is supply chain security. That leads to the following questions: What supply chains are we talking about? Are we talking about Canadian supply chains or those of our allies?
If you follow that line of thinking and actually look at the mines that are being proposed as strategic or critical interests for the Government of Canada and the provinces, you realize that many of them are being developed where massive investments have been made by foreign entities, foreign states and departments that are clearly linked to potentially threatening interests. That's why the Government of Canada and the provinces need stricter conditions for access to and control over minerals. That's what we aren't seeing in proposed legislation.
I'll reiterate what I said earlier. It sure looks like the government actually wants to fling wide the door to foreign investment. We really have to think about how we can control supply chains if we want to define them as being of Canadian origin.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
What exactly is the threat?
I remember the Department of Industry saying a few years ago that, this time, it would take this issue seriously and get Chinese capital out of the mining sector. You would know better than me whether or not that was done properly. I feel like it's complicated, because there are all kinds of ways to set up umbrella companies or fake head offices, to register a business and pretend that it's not actually owned by a foreign power. There are ways to hide connections. What are the most common strategies?