Natural Resources Committee on Nov. 25th, 2013

[Kelly Block, Conservative, Saskatoon—Rosetown—Biggar, SK]

Thank you very much. Perhaps this is a good segue.

It was just one short week ago that we all learned about the MPMO, or were updated on the work of the MPMO. I'm wondering if you can tell us if all or any of these projects are under the supervision of the MPMO.

[Christiane Villemure]

Mr. Chairman, one project has completed the environmental assessment process, and that's the Avalon Rare Metals project. All the other projects on that list have not yet gone through the environmental assessment process. They are at the pre-feasibility stage.

[The Chair, Conservative, Leon Benoit]

Thank you, Ms. Block

I'd like to ask a question for clarification.

In your slide on page 10 you have the tonnes per year of heavy rare earth elements listed. Those, you say, have come from the mine sites. But when the mining companies are doing estimates like that, it's with current technology, and often as time goes on new technology allows for more production.

Is that accurate? Is that the case here, as it is in most mining projects?

[Christiane Villemure]

Mr. Chairman, I would say that you are absolutely right, that as knowledge and technologies evolve, there is an opportunity for mining companies to take advantage of them and refine their reserve projections or improve their mining processes.

[The Chair, Conservative, Leon Benoit]

Okay.

Mr. Trost, you have up to five minutes. Go ahead, please.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair.

In follow-up to a question that Mr. Gravelle asked earlier about the refining capacity, I was looking at the rare earth elements supply chain and the list here.

Could you give us some idea, to the best of your knowledge—because different companies do different things—as to what elements of the supply chain and the mines that are proposed for Canada are looking at in developing their mine sites or other places in Canada?

I want to differentiate between refining, separation, milling, and the different stages, because some mines, I can see, do more milling, while others proceed all the way to refining in Canada.

Could you clarify and put some nuance into that answer?

[The Chair, Conservative, Leon Benoit]

Mr. Habib, go ahead, please.

[Magdi Habib]

Mr. Chairman, the process for the milling and hydrometallurgy separation and leaching for all rare earth elements is the same. If the technologies that we are developing are able to resolve this separation issue between the different elements, the technology would be applicable to all the elements we have. The five most critical ones, which we talked about earlier, are the five heavy rare earth elements gadolinium, dysprosium, terbium, europium, and yttrium. These are the five heavy rare earth elements that we are focusing our research on.

This would also be applicable to the suite of other rare earth elements that we are considering, but for now we're focusing on the heavy ones.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

But in general, from what you know of what the companies are planning to do, are they planning to do most of this processing? You noted in one of the answers that refining will probably be done somewhere in the States; I forget where. I was reading an article in The Financial Post saying that for the Avalon project, they were planning to do a fair number of the steps, I believe, right on the site in the NWT.

At what stage is the ore or are the ore concentrates going to actually leave Canada? Will it be right at the end, for refining? Will it be different for different projects? How much of the value added is going to be done in Canada, based on what you know of the companies that are most advanced?

[Christiane Villemure]

Mr. Chairman, the further you go in the separation process, the more value is added to the product. So it's advantageous for companies to develop grinding, milling, and processing processes that go as far as possible and come as close as possible to the pure oxides, which are the materials that are needed by the manufacturing companies. Depending on the availability of technological facilities, the ease of constructing that equipment and those facilities on site, it is possible that ore could leave at different stages, depending on the company and depending on the ore type as well. It's a very difficult question to answer. It's very ore-specific.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

So it's very much an open question, depending on the company and the site, and it depends very much on the local geology. Did I get that right?

[Christiane Villemure]

Yes.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you.

One thing I remember from several years ago, if not at least a decade ago, was that one of the majors had a major deposit in the South Pacific, a nickel deposit whose mineralogy was rather unique. They were unable to actually get the nickel out of the sulphide ore, at least in any economical way, and possibly even in some physical way. The matrix of the nickel was very different. This was a major technological problem that they were unable to solve.

At this point, knowing that science is not perfect and looking into the future, is there any anticipation that there is going to be a major hurdle that it may not be possible to solve with the general science and engineering that is being looked at? Do we not have specific answers because this is so new, or is there some major question right now that leaves us concerned that we may not be able to get over this hump and get the concentrates and the ores we want?

I realize that's a difficult question, but let me ask for the best guesses from talking with the scientists involved.

[Magdi Habib]

Mr. Chairman, as you know, in R and D there is a lot of uncertainty in doing the science. There is no guarantee that the science will go as we expect. We try, through science and innovation, to develop technologies while reducing the risks of technological barriers, and with the advancement in technologies in different areas of mineralogical characterization, wherein we look at field emissions spectroscopy, scanning electromicroscopy, and new state-of-the-art equipment that we have now for detection and analysis, I think we can reduce the high risk associated with one of the steps going wrong.

But again, despite all that, there is always the risk that something would not go according to plan. As we are developing the technologies and looking at the uncertainties, we'll be able to determine the success of the initiative. But certainly there is high risk associated with any type of science that we do in our laboratories.

[The Chair, Conservative, Leon Benoit]

Thank you, and thank you, Mr. Trost.

We have Mr. Julian, followed by Ms. Crockatt and Mr. Clear for five minutes each. Those are the last three names I have on the list for now.

Go ahead, please, Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair, and thanks to our witnesses for being here today.

I'd like to start off by asking how, within NRCan, you organize your work around rare earths. Could you give us a sense of what budget and staffing are allocated specifically to rare earths and how it is organized within the department?

[Christiane Villemure]

Mr. Chairman, I can start, and I will ask my colleague to complement the answer.

In the past three years, we've had about $1 million over the three years to conduct research activities. This is seed money that was provided to kickstart the science and the study of rare earths. The majority of this amount and this effort is with the scientific laboratories.

On the economic side, which is the one I manage, there is the equivalent of one resource that is allocated to the study of rare earth economics and of understanding the international global context of supply and demand associated with rare earths.

[Magdi Habib]

Thank you, Christiane.

The $1 million that was allocated, the seed money to do the rare earths element project, included a good portion for scientific R and D, and the project that you see in the slide deck was a result of the gaps analysis we have done in consultation with industry, provinces, and territories.

Based on that gap analysis, we were able to identify the five areas of research that you see. We have shown good success in the past year at the separation phase—which is the milling phase, the beneficiation stage—when, with the very small amount of money we have, we were able to develop a small pilot plant in our laboratories to obtain a high concentration of the mineral, improving its concentration up to 98%, with a recovery of some of the rare earths elements of up to 87%.

So within a short period of time we were able to produce a pilot plant at laboratory scale and improve the grade of the concentrate, from the seed money we got from the department.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

We're talking about $1 million that was spent over three years. My first question is this: when will that amount run out? And have you renewed that agreement or do you have another agreement for the coming years? My second question is: what is the total possible value of rare earths in Canada? Do you have an overall estimate of the total value of rare earth deposits in Canada?

[Magdi Habib]

I can answer the first question. Funding will end in March 2014, and we hope that companies, universities and provinces will be interested in continuing this kind of initiative so that we can meet the project's overall objectives.

As for your second question, about the total possible value, I'll ask Ms. Villemure to answer that for you.

[Christiane Villemure]

Mr. Chair, I would like to get back to the honourable members of the committee with that answer.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you for that.

It's interesting to note that money dries up in March 2014. So obviously, unless there's a renewal, we'll be going backwards.

I was interested in knowing whether or not NRCan, through the Geological Survey, is able potentially to help with these projects across the country. I note that, if I'm not wrong, we're basically looking at two different ends of the country: the Quest development is in Labrador, it appears from the map, and then the Avalon development is in the Northwest Territories. So we have companies now looking at both ends of the country.

To what extent is NRCan available to provide supports for exploration?

I think I'm running out of time, so I'll put my last question out to you as well.

In terms of the environmental issues, to what extent is NRCan able to do some work either within the ministry or with other ministries to determine what the environmental issues are going to be, so that we tackle those first off, even before the development of the sites occurs?

[Magdi Habib]

Mr. Chairman, as I mentioned earlier, we just began to work in the area of environmental toxicity and environmental impact a couple of months ago, so we cannot comment at this point in time as to the results obtained so far on the study. But we are committed to developing technologies that will have no impact upon the environment and our ecosystem.

[The Chair, Conservative, Leon Benoit]

There was another question there, wasn't there?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Yes, the second question was about geological surveys and to what extent NRCan is helping facilitate these sites and others.