I think you're going to hear some common themes this morning.
I want to start by thanking you on behalf of Vale for this opportunity to speak to you this morning on natural resource development in the north. It's a topic that's important to us as an organization, to mining as an industry, and I think to Canadians more broadly.
I'll start by telling you a little something about our company. Vale is the world's second-largest mining company by market capitalization, second only to BHP. We're present in 38 countries around the world and employ some 134,000 people.
In our Canadian operations, our employee base is 6,500 people strong. We're in four provinces with our operations and have exploration activities in many more areas. Apart from the 6,500 direct employees, we employ approximately 10,000 contractors, suppliers, and service representatives.
Our primary product is nickel, of course. We're the second-largest producer in the world after Norilsk.
As a primary producer we don't often talk a lot about end uses of the product, but I always try to bring that into conversations. Nickel is used to produce stainless steel and metal alloys, which are then used in the production of airplanes, automobile engines, surgical instruments, and batteries, as well as new batteries for hybrid cars. There's so much impetus to be green these days and so much discussion around that, and mining is often viewed as antithetical to that, but I often say that none of us wants to fly home in a biodegradable plane.
We also produce copper, cobalt, and platinum group metals. With our potash project in Saskatchewan, we'll soon be in the fertilizer business and adding an important contribution to the world's global food chain.
Outside of Brazil I would say that no single country is more important to Vale's fortunes than Canada. Our base metals business, as it's called, is headquartered in Toronto. It's divided into three geographic regions: North Atlantic, South Atlantic, and Asia Pacific. The North Atlantic, of course, is focused on Canada.
An important point is that the North Atlantic team is headquartered at our operations in Sudbury, Ontario, in the north. This means that the team of people who lead the mining operations in Canada live in the north. We raise our families in the north, and most of us are from the north. The point there is that we care about the north.
The entirety of our base metals business in Canada is in the north: northern Labrador, northern Manitoba, and northern Ontario. Our exploration activity takes us even farther north to Nunavut in search of the next metal discovery to sustain our business.
At Vale, our vision is to be the world's best mining company. It's a pretty lofty ambition, as it should be, and it's important to articulate what the best means to us. It doesn't mean being the biggest. It means aspiring to be the best. It means aspiring to be the best on values that are fundamental to us, such as: life matters most; health and safety; a respect for the natural environment; responsibility to communities in which we operate; and generating sustainable benefits for this generation of Canadians and the next. Put simply, to me it means that we need to take responsibility and act responsibly.
How will we achieve our vision? It's difficult to reconcile a sustainable platform with a mining company. After all, as a non-renewable resource, it doesn't grow back once we take it out of the ground. But I would say that an industry that has survived and prospered over the better part of a hundred years is the very essence of sustainability, and that's how far back our roots in northern Canada extend.
In Canada, we've embarked on an aggressive strategy to see the next generation of miners. In November of 2010, we announced a $10 billion investment in Canada. It's one of the boldest and most aggressive investment packages in the country and certainly, without question, in our company's history.
The program includes: a $3.6 billion investment in a hydrometallurgical processing plant at our operations in Long Harbour, Newfoundland; a $2 billion investment to retrofit our smelter in our Sudbury operations, called the Clean AER project, with AER standing for atmospheric emissions reduction; a potential new mine development in Thompson, where we're closing down our smelter and nickel refinery and transitioning to a mining-milling operation, so we're investing money in mine development there; and a potash development in Saskatchewan, at a spend of between $2.5 billion and $3 billion.
We're investing in Canada because we believe in Canada. The country is, as we all know, blessed with an abundance of natural resources, with, importantly, a stable political environment, and with some of the most highly skilled miners on the planet.
But we do have our challenges. Vale's future and the future of mining in Canada depend on finding and developing viable mineral deposits that will lead to the next mines. I echo the concerns of Karina that exploring in the north is fraught with risk and instability. It's costly, given the lack of infrastructure, vast distances, remote locations, harsh climates, and decentralized regulatory environment.
I have a number of examples of the complexity of permitting and regulations in the north, largely recent examples from our exploration in Nunavut. There, setting up a small tent for exploration work requires three permits from three different entities.
Permitting for early exploration can take anywhere from three months up to a year. Bear in mind that early exploration work is light, low-impact work that is the least intrusive part of the mining cycle. We're just looking to see if there are mineral deposits there worth exploiting, yet the system seems to mitigate against that with a three-month to one-year delay.
In another instance, it took the better part of three months to get a permit to land a helicopter in the north. So, it takes three permitting entities to peg a tent, three months to land a helicopter, and we're just checking to see whether there are minerals there.
These are but a few examples. When tallied today, the amount of Vale's investment program exceeds the $10 billion announced in 2010, and therein lies the problem. Permitting delays, project interruptions, and rising costs result in projects being over-budgeted, over-scheduled, downsized, or worse, shelved entirely. We call it capital paralysis.
The permitting and regulatory environment is an important part of that equation. What we want from government is a regulatory environment that promotes, rather than hinders, responsible and sustainable development. We support your efforts to streamline the regulatory review process and adopt a one-window approach.
Critics of that approach would suggest that it's a shortcut. I disagree. I think some people may not appreciate that complexity and volume do not necessarily impact quality or precision on topics like environmental assessment. You can have one without the other. A strong regulatory environment should maximize both effectiveness and efficiency to drive responsible benefits.
I was fortunate enough to hear a talk by an individual from the Treasury Board of the federal government. He introduced this concept of a world-class regulator. When I asked him what that meant to him, he had a very succinct answer. He said there were five things. A world-class regulator is one that acts on facts and scientific evidence, not the politics of the day, and takes a risk-based approach to regulation. Second, it is aligned with systems in other jurisdictions—internationally and provincially. Third, it allows for periodic reviews of its regulations to ensure that the regulations on the books are relevant. Fourth, it's one that views regulatory instruments as instruments of last resort, only for when education, awareness, and other efforts don't work. Last, it's a regulator that seeks to minimize administrative burden and is mindful of that as they are introducing new regulations.
I happen to agree with all of those points. The benefits are obvious—jobs, investment, and an enhancement of Canada's image as a centre of mining expertise and excellence.
I'll wrap up by saying two specific things. Tomorrow is a big day for us at Vale. We're launching our $2 billion Clean AER project, demonstrating our commitment to the environment. That's $2 billion on an environmental project designed squarely to reduce air emissions by some 95% over 1970 levels. That's not another ounce of nickel or copper out the door but purely an environmental investment.
We're also signing our first Ontario impact and benefit agreement tomorrow, with the Sagamok First Nation group with respect to our new Totten mine development.
In my view, these things demonstrate that mining, environment, and community can coexist, and we look to the government for support on these things.
Thank you for the opportunity for input.