Evidence of meeting #6 for Natural Resources in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was chairman.
A recording is available from Parliament.
Director General, Industry and Economic Analysis Branch, Department of Natural Resources
Yes.
On the revenues as projected, and this is really dependent on the deposit, we are looking at half a billion dollars—sometimes a bit less, sometimes a bit more—in annual revenues, not net original revenues.
I'm talking about gross revenue.
How do you say that? Gross revenues?
Peter Julian NDP Burnaby—New Westminster, BC
You are talking about gross revenue. Even still, if we're talking about half a billion dollars in spending and half a billion in gross revenue, the construction costs are one thing, but we are talking about the life of the mine. Is that half a billion the projected amount for the life of the mine?
Director General, Industry and Economic Analysis Branch, Department of Natural Resources
It's the—
Director General, Industry and Economic Analysis Branch, Department of Natural Resources
They are annual revenues.
Director General, Industry and Economic Analysis Branch, Department of Natural Resources
They are projected annual revenues. The construction costs are one-time costs.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Yes, I understand that.
However, we're talking about huge profits. It could be very useful. Do you have any figures you could give our committee about the sites where that information is available? I'm thinking of anticipated revenues, construction costs and site development. It might be interesting to establish an economic framework for these mines and the potential in that area.
I don't think I have a lot of time left, but there is another question I want to get back to. If the $1 million three-year grant within NRCan is used up by March 2014, what is the recommendation moving forward? Is it to renew it for another three years for $1 million, or is it to expand the actual funding within NRCan to provide support?
Over the next two or three years, how do you see the capacity on rare earth within NRCan being developed?
Director General, Industry and Economic Analysis Branch, Department of Natural Resources
Mr. Chair, this is a question that will be discussed before ministers, and it's information that I cannot provide.
Conservative
The Chair Conservative Leon Benoit
Thank you.
We'll go now to Mr. Regan, followed by me, and then we'll get to the other business we want to deal with at committee.
Go ahead, please, Mr. Regan.
Liberal
Geoff Regan Liberal Halifax West, NS
Thank you very much, Mr. Chairman.
Are you able to tell us, in relation to how much the Canadian government spends on research on rare earths, how we rank compared to the U.S., Japan, or the EU, for example?
Director General, CanmetMining, Department of Natural Resources
Mr. Chair, as we mentioned, Canada's investment is very small—about $1 million for three years. In comparison, the Critical Materials Institute in the United States is investing close to $120 million over the next five years. In Australia it's close to $80 million for the next three years. Although it sounds like a small investment, we are leveraging these funds from the work we're doing with the provinces and territories and through in-kind work with universities. But certainly the amount is not large enough to advance the completion of this initiative.
Liberal
Geoff Regan Liberal Halifax West, NS
What would be the full amount, including provincial dollars? Are you able to give me a figure for that?
Director General, CanmetMining, Department of Natural Resources
Mr. Chairman, I don't think I have that information, but certainly we can find that out.
Liberal
Geoff Regan Liberal Halifax West, NS
Please do.
As well, in terms of the research we're doing in a collaborative way with other countries, I assume we have reciprocal agreements to do that. How would those be impacted if the funding were not renewed in Canada in April?
Director General, CanmetMining, Department of Natural Resources
Mr. Chairman, if the funding is not there, that will certainly compromise the speed with which we would like to advance this initiative.
Liberal
Geoff Regan Liberal Halifax West, NS
I've heard that the Critical Materials Institute provides funding to companies that are trying to develop projects to develop mines for rare earth minerals, and that they do so on the basis of ten to one—in other words, $10 from the institute to $1 from investors.
How does that compare to Canada?
Director General, CanmetMining, Department of Natural Resources
Mr. Chairman, I don't have the answer to this specific question, but I know from the R and D work that Canmet within NRCan is doing that for every dollar we invest from our public funds, we get $5 back from the industry in terms of in-kind contribution.
Liberal
Geoff Regan Liberal Halifax West, NS
That would suggest we're the opposite way around: they're ten to one and we're one to five, which is a long way behind. But I'm not sure we're talking about the same thing. I'm not clear exactly what the Critical Materials Institute is funding, and I hope we'll hear from them about that.
What can you tell me about the difference between what they're doing in terms of funding companies directly, as I understand it, and what NRCan is doing or the Government of Canada generally is doing? Maybe it's through tax measures. I'm not sure.
Director General, Industry and Economic Analysis Branch, Department of Natural Resources
Unfortunately, Mr. Chair, we don't have the answer to this question. We would need to look it up.
Conservative
The Chair Conservative Leon Benoit
Thank you, Mr. Regan.
I have a few questions, and if someone else has just a few, let me know.
My questions come from questions that have already been asked here today. I think you indicated in some comments that the percentage of rare earth elements currently being extracted from hardrock is relatively small. China is a large producer of rare earths, and most of that comes from sand, silt, clay, and that type of material.
As well as you can answer, roughly what percentage of rare earths come from hardrock mining now? If that percentage is low, then just how proven or unproven are the mining techniques that are likely to be used in these projects in Canada?
Director General, Industry and Economic Analysis Branch, Department of Natural Resources
Mr. Chairman, currently the amount of tonnage from hardrock mining is minimal. China is producing over 90% of the world's production from its clay deposits.
This is why Canadian industry is looking at solutions to S and T challenges, to be able to extract rare earth from different kinds of deposits. The understanding is that other countries where they have hardrock deposits are in a similar situation.
Conservative
The Chair Conservative Leon Benoit
To follow up on that, has there been a study on tailings from mining operations that are in no way related to rare earths, to determine whether there may be rare earths available in the tailings that could be extracted?
Do you know if there's any potential in that regard, or anybody who has explored that?
Director General, Industry and Economic Analysis Branch, Department of Natural Resources
Mr. Chairman, I believe there are some projects along those lines.
Pele Mountain, in Ontario, was a former producer of uranium. This mine has tailings that can be reassessed to extract rare earth.
There's another project that is also on the list that we provided to the committee, and that's the Orbite Aluminae project, located in Cap-Chat, Quebec. It's basically a chemical company that is in the process of producing alumina from red mud tailings. Red mud tailings contain a number of materials, and they do contain some rare earth elements. Through the electrochemical process in place at this company, it is believed that small tonnages of rare earth could be extracted out of the tailings.