Thank you, Mr. Chair. We'll stay within the seven minutes.
Let me begin by expressing my sincere gratitude for the invitation to appear today. We have tremendous respect for the work of your committee, and in particular, we are excited to contribute to your study on rare earths in Canada.
My name is André Gauthier. I'm the president and CEO of Matamec Explorations, and I'm accompanied by Mr. Michael Roche, the director of marketing of rare earths and specialty metals at our company.
I will continue in French.
Matamec is a mining exploration company headquartered in Montreal. Since 1997, it has explored mining properties in Quebec and Ontario, primarily for gold and rare earths, which Matamec considers its priority.
Matamec owns the Kipawa rare earths deposit in partnership with Toyotsu Rare Earth Canada, also known as TRECan, a subsidiary of Toyota Tsusho Corp. (TTC) from Nagoya, Japan. The Kipawa deposit, to the south of the Témiscamingue area in Quebec, is rich in heavy rare earths.
After over 16 months of work and $16 million invested, the IN 43-101 feasibility study was completed in the summer of 2013. The report has been available on the SEDAR site since last October.
The Kipawa project is currently in the predevelopment stage and requires an additional investment of $6 million. It is one of the most advanced heavy rare earths projects outside China.
Why heavy rare earths? Heavy rare earths are essential for the green technologies that we use on a daily basis, such as hybrid and electric cars. In 2011, after assessing over 400 other rare earths projects around the world, TTC, through its subsidiary TRECan, chose our project because it could meet Toyota's demand for dysprosium. That rare earth, and a light rare earth called neodymium, are essential for the production of permanent magnets, which are key components in cars with electric engines.
In addition, heavy rare earths are the rarest. Right now, China produces more than 95% of the rare earths used in the world. If the demand for heavy rare earths continues to go up, we are anticipating a shortage in the next 5 to 10 years. We also feel that China will have no choice but to limit its heavy rare earths exports and keep its production for its own use. In turn, Western industrial users will be faced with a shortage of heavy rare earths.
However, the Kipawa heavy rare earths deposit is one of the most advanced mining projects. It is well positioned to become a secure source of heavy rare earths for the western world.
The one very important thing to remember is that Canadian heavy rare earths projects are facing major challenges, technical and economic alike. Mr. Cashin, from Quest Rare Minerals Ltd., represents one of those deposits. For instance, we have the economic challenge of setting up a western supply of heavy rare earths for specific markets competing with China, whose production costs are very competitive, environmental constraints aside.
In the early 1980s, when China started to produce rare earths, it had a market share of 8,000 metric tonnes, which is very little. In 2013, it produced more than 120,000 metric tonnes. Not only is China the leader in production, but it is also unequivocally the leading expert in downstream processing. That includes all economic spinoffs from secondary processing, meaning individual oxides, and even from tertiary processing, meaning metals and alloys.
In our view, whether we are talking about Canada or any other country trying to develop those markets, government and industry must attract investments in order to ensure the development of activities that complement the rare earths mining production. The Canadian government must promote this industry in our country, because other countries, such as Brazil and Vietnam, are planning the development of their own rare earths industry and they are making it a priority.
Let's not pass up the opportunity to become a leader in heavy rare earths production and the research and development of related applications. The real benefit for Canada is to create jobs by attracting industries that use heavy rare earths produced in the country.
We continue to believe—just like this committee, I hope—that the pace of progress is gathering momentum in the development of technologies that use rare earths, especially heavy ones. In addition, available research on applications deals with refrigeration, which is a huge potential market.
In terms of the social acceptance of mining projects in Canada, both at federal and provincial levels, rare earths projects are now being systematically subjected to a complete environmental and social impact study. Our notice of proposal has already been submitted to the Canadian Environmental Assessment Agency. In May 2013, we received about 50 pages worth of guidelines indicating the required content.
Even though the processes of the two levels of government are slightly different, they still have similarities and they cover at length all aspects of quality control and environmental standards. As an environmentally responsible and conscious country, Canada must set an example for the entire world as it explores those elements on its territory. Canada's mining industry is one of the best regulated industries in the world.
I thank the committee once again for the invitation.
I will be pleased to answer any questions you may have.