Natural Resources Committee on Oct. 18th, 2016

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Mr. Weatherell, you mentioned a new system that could reduce the amount of energy used for crushing rock by 50%. It sounds pretty exciting and incredible. Could you expand on that? I don't know how much detail you can provide us, but what are the timelines, perhaps, for rolling this out and it being adopted by the industry in general?

[Carl Weatherell]

As I mentioned, we're launching phase one in November. Our technology group spent two years basically searching globally for technologies that could potentially reduce energy consumption. In grinding circuits, our target was a 50% reduction. We've identified three possible technologies, and this is the most promising and the one that's most advanced. Phase one that we're about to launch is essentially looking at the fatal flaws. There are some specific technical issues we're trying to identify about the system. That's a joint project with seven mining companies, UBC, and the SME that owns the IP. That's going to be done at the end of June this year.

The second phase of the project would be launched in September 2017. Essentially what we're doing is building a one-metre demonstration grinding circuit and proving it out using aggregate, using material from a mine. That's approximately one year.

The next part of that, which is the most difficult, we're thinking now will probably take two to three years. Again, we haven't done the full engineering yet; that will come after June. That will be a full-scale grinding circuit that's implemented in a pilot system at a mine site.

The total cost estimate of phase one is relatively small; it's about $80,000. Phase two is closer to $1 million. Phase three is going to be $5 million to $10 million.

Does that answer your question?

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

That's fine. Thanks.

Mr. Robitaille, you mentioned issues around first nations, especially in a lot of the remote communities that mining occurs at or near in Canada. I wonder if there is anything the government could do to encourage partnerships between first nations and the mining industry, such as increasing the capacity of these communities in terms of education from elementary school right on up to post-secondary. Could you comment on where we could help?

[Jean Robitaille]

I will try to answer your question directly. I might pass along a few comments at the same time.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

That's fine.

[Jean Robitaille]

If you look at the development of the resource, for me it's linked with the development of people. I will speak about Nunavut; I know Nunavut well. We have mines operating and we're looking to develop more mines. You cannot have forestry out there. There are no trees. It's cold. There is no energy.

However, with mines you can develop people. We have good truck drivers, they are Inuit. They are not just men, they are men and women. If you look at the apprenticeships, we are working on developing plumbers, electricians, mechanics, carpenters. You give a wish to people, a reason to work. I saw the community of Baker Lake when we started and compared to now. One thing we have to do is continue.

I know over the last seven to 10 years regulations have become a little more difficult. I'm not complaining. I'm saying we have to compress the time. I'm not asking to try to bypass any regulations or to minimize them. We have to accelerate. A good example is the Meadowbank mine where we tried to bridge with another discovery, but the permitting process.... We have good collaboration. I'm not here to complain about collaboration. Through anything you can do at the government level, regardless of your party, you have to find a way to make this more acceptable because there are jobs and people. When we create opportunities for people you cannot let them just drop in their community. This is one point.

Another point is a university in Nunavut. We're pushing and have worked for a university. Innovations have to be linked with this. These people have their tablets, their phones. They are like everyone else. They want the technology. You need to bring fibre optics. Maybe it's through the mining industry.

Natural resources will permit the development of select regions in Canada. Innovation will maintain this because now you will have better operating costs. You will be able to have a reason to say, eventually I will be able to maintain my costs or I will be able to mine more of what is in there. This is something that we can contribute. It's not just valid for Nunavut, the Ring of Fire, and other communities that I don't know. I'm certain that it's definitely a reason.

A last point, just like Agnico, we are investing $5 million per year in Nunavut in training. That's one company. Imagine if you can push and we can have new technology, lower costs, and instead of 35¢ per kilowatt have 5¢ per kilowatt. How many other projects will move forward? There is an incentive to build roads. We go through innovation, we use other technology to build roads. You will develop a territory.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thanks.

I have a quick question, perhaps to Mr. Weatherell. We've heard in this committee from COSIA, Canada's Oil Sands Innovation Alliance. Is there any idea of building that kind of model out into parts of the mining industry?

[Carl Weatherell]

We have to look at the oil and gas and mining industries. They're a little bit different. The COSIA model is fairly centrally located. The processes are fairly homogeneous. In the mining business, the hard rock business, it's significantly different. Even tailings in a mine site is different per mine site. So it's a little difficult to focus on technologies in one space.

In terms of a model, as Jean alluded to earlier, when we took a hard look at CMIC about three years ago, we looked at COSIA as a potential model. We looked at COSIA and international organizations. We also looked at innovation organizations outside of the mining industry in micro-electronics and aerospace, and we adopted a combined model. So in some respects our model is similar to COSIA but it's different in the sense that we're more open. We're using open innovation. The intellectual property is not contained within nine or 13 companies. It's open to whoever was participating.

For example, our first project in exploration was the largest geoscience consortium in North America. There are 54 organizations sharing the intellectual property, from universities all the way through to Fortune 500 companies. So the model is a little bit different. We looked at it. We're rolling out something that we think is better for our industry.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Weatherell.

Thanks, Mr. Cannings.

Mr. Massé.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

First of all, I would like to thank you, Mr. Weatherell and Mr. Robitaille, for taking part in our committee's work as witnesses. We greatly appreciate it. This is the first opportunity I have had to participate in this committee. I find your comments very interesting. Perhaps I will make sure I attend this committee's meetings more often.

Mr. Weatherell, you piqued my curiosity earlier when you spoke about the complexity of the innovation system in Canada. You said that, in this context, some companies had put all their innovation eggs in a basket abroad. Could you describe this complexity and why these companies have placed their eggs outside Canada?

You also spoke about the Australian model. Could you tell us about the situation there and briefly describe their model?

[Carl Weatherell]

That's perfect, thank you for the question. I'm glad you brought that up. If you hadn't, I would have.

As I mentioned at the start, in Canada approximately 7,000 different programs fund research, development, and innovation. It's significant. It's all across the board. There are multiple organizations and new programs come on stream constantly. The programs are not always connected. They're focused only on universities and research. As I mentioned in the opening statement, we have to delineate the two. They are two different activities. They're linked, but we need to fund both. That makes it very difficult for a mining company, for example, to invest in innovation. If you look at the statistics provided by the tri-council, the amount of money invested that is tracked and matched through tri-council programs is insignificant. I think the comparison is the same as dead languages. It's a scattered, large number of programs.

The Australian government chose four strategic areas for the government to invest in, and mining was one. Actually, it wasn't mining, it was METS, which is the mining and the supply chain sector, the whole system. They selected the METS sector as a critical area to invest in, number one. Number two, they made focused, direct investments of larger amounts of money in non-profit organizations, and they were not competitive, when you have to write proposals and compete and build transactional relationships. They were going to invest in the challenge defined by the industry.

For example, in Australia a couple of organizations called CRC ORE just received a new investment of $35 million. About $70 million in CRC ORE is now exclusively focused on processing. That was matched by mining companies, so the government is there with matching money, and mining companies say they can just go right in and throw their money on the table. It's that easy.

They have a similar one called Deep Exploration Technology CRC. The government said that exploration in undercover, etc., was very difficult. They were going to make a significant investment—I don't know the exact numbers, forgive me, I can try to find them—explicitly in exploration run by a third party organization led by industry. The most recent one was approximately 12 months ago. The Government of Australia and the Government of Queensland combined forces. I think the federal government put in $14 million, Queensland $6 million, for a total of $20 million over three years, to start a new organization called METS Ignited, which is doing essentially the same thing we're doing: building technology road maps for the industry, getting the supply chain hooked up, and moving forward to create a more sustainable industry and promote the development of new technologies for sale outside Australia.

It's very focused, run by industry-led organizations, third parties. Universities and others are involved, but they're not running it, so it's focused versus a competitive and a scattered approach.

Does that help?

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Yes, absolutely. Thank you.

You spoke about the 7,000 different programs available that are not connected. I'm astounded. I have a better understanding of the Australian model.

How could we help the industry move from the existing Canadian model, which includes 7,000 programs, to a model like the one you described, using the Australian model as an example? How could we transition effectively to a more appropriate model?

[Carl Weatherell]

I think we need to. If you're looking at research and fundamental discovery, you do need that sort of opportunity where you have numerous programs where people with good ideas can apply, so we do still have to do that. If we want focus, we need to identify the strategic areas of importance to Canada and invest in them at specific levels versus a new program where you apply, and things are relevant. That's one way to do that.

Also, part of this government's innovation agenda is looking for ideas and looking for models. With Towards Zero Waste Mining and CMIC, we're proposing a new model for innovation. This is how we're doing industry-led innovation that reduces the risk. We've already identified; we've got a technology road map telling us where we're going to be in 10-plus years, so try a different model.

We're not the only ones. Others are out there as well, but let's test drive it.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

That's good. Thank you.

[Jean Robitaille]

I would like to add this.

As I have already mentioned, there are currently many programs and organizations. The CMIC's mandate is actually to consider the whole and to try to align the organizations to industry needs. That's the difference we are currently proposing.

Rather than operate like the other groups, which target only the sector in which they specialize, we consider the needs in order to seek the expertise where it really is and adapt it within the industry across Canada. That is the difference. We are talking about an umbrella, an organization that will be able to align mining innovation investments in Canada to ensure results.

No other organizations currently play this role. I think that's an important difference to point out. It takes nothing away from these other organizations, far from it. We are working and will continue to work with them. They have the advantage of being specialized. The idea is that a group can see all the initiatives to be taken.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Robitaille.

Do I have any time left, Mr. Chair?

[The Chair, Liberal, James Maloney]

That's seven minutes. I'm sorry.

Thank you very much.

Ms. Stubbs, we go now to you.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you both for being here today.

I'll just elaborate along the same path of my colleague. I think we're in a really interesting area of the discussion. For us, I think it's important to get a specific sense of the ways in which government could change either fiscal tools or policy frameworks to help unleash innovation.

I would invite you both to elaborate more on two fronts. First, what are your reflections with regard to Canada's position globally and how we measure up against other countries in terms of competitiveness and investment and the deploying of innovation in mining? Thank you, by the way, for the information about the Australian model.

Then, second, if it's applicable, do you have any reflections on differences within Canada from territory to province or differences between jurisdictions? Do you have any comments on either best practices or barriers on this front and any specific recommendations for initiatives that could be undertaken to enhance and improve the development of and the investment in and deployment of innovation in mining?

[Carl Weatherell]

That's a great question.

I'm going to take some of it, and Jean and others will jump in as well.

On the competitiveness front, we're actually losing ground for the first time in decades. We rank number two, after Australia, as a place for exploration investment. We're losing ground very quickly. In that sense, we have an opportunity again with what we're trying to do to reclaim that and to turn Canada into a global leader, not only in mining, but also in mining innovation. We have that opportunity. The model we're proposing has never ever been used in natural resources. Since we are driven by being open to innovation, we borrowed the model from other sectors and put together something we think is better.

In terms of global competitiveness, we're falling behind. We have to do something quickly. I already mentioned our innovation rankings. We have to do something on that. Again, as we heard in the opening statements, having a myriad of funding programs shows that it doesn't work to the level we need it to.

With regard to differences in Canada, we work with a number of organizations across Canada. I should mention, as Jean said, that we're the umbrella organization. I chair a group of what we call the leaders of research, development, and innovation organizations. These include organizations across Canada. In Quebec City, there's COREM. There's the Centre for Excellence in Mining Innovation in Sudbury, referred to as CEMI. MIRARCO is another centre in Sudbury. CAMIRO is in Sudbury as well. COSIA is also part of that. C-CORE is in the Atlantic provinces. CanmetMINING is part of that, as is the NRC. We are seeing how we can collaborate and who's doing what, and we are comparing what we're doing and looking at how we can collaborate and adopt best practices. Within our own industry we're trying to get some of that collaboration and some of those best practices going. We and other organizations are looking at some things going on in some areas.

As I alluded to before, we prefer to look outside our industry, because it's very easy to look at what we're doing. We looked at AMIRA in other jurisdictions, in Australia, and we didn't like the model; it wasn't working.

We're borrowing from aerospace and defence and we're borrowing from microelectronics and software engineering. Our business model of an open innovation business ecosystem works exceptionably well in the software business. If you look at your phone, the Android operating system in most of your phones is built on a business ecosystem. Our business model is the same. For best practices, in terms of business model, we're borrowing from somewhere else and putting a spin of mining into it.

I want to come back to a few differences. As I mentioned, the mining industry is a little different from the oil and gas industry; it's not concentrated. We do have regional differences. Saskatchewan is a really good example. I didn't mention the International Minerals Innovation Institute out of Saskatchewan, which we work with very closely as well.

It's looking at what we're doing and seeing what's common to potash and uranium. There are some specific differences that innovation and research and development can address in uranium that are different from what's going to be happening in gold, or in base metals, or in diamonds. There are some regional differences, and that's one good example.

Jean, do you have anything else?

[Jean Robitaille]

Maybe. If you look at the competitiveness, you have to look at the industry going into South America, where the manpower is less expensive. We have to innovate; we need to have mines that are more automated. This is one component that will increase competitiveness.

I was on COREM, the Consortium de recherche minérale in Quebec. COREM was by the government at the beginning. It was a way to bring the industry more on board, and the success is substantial. I can tell you that the industry is using the outcomes of COREM, which are positive, and the contribution is substantial. This is not the same model, but it will be something that eventually, in five years, we will do with CMIC, having more of the industry after we make the demonstration.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Robitaille.

Thanks, Ms. Stubbs, we're out of time for that question. Maybe we can pick up on that with Mr. Harvey.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

We're going to sound like a broken record, but I'm going to follow right along the same line of questioning.

If you want to finish your response, you can, or if you're done, then that's good too.

[Carl Weatherell]

Just to bolster what Jean said and to answer your question, the best practices are industry-led. CMIC is industry-led, COREM is industry-led, IMII out of Saskatchewan is industry-led. Those are the best practices, and this is true in Australia as well. Best practices: industry-led.

[TJ Harvey, Liberal, Tobique—Mactaquac, NB]

First of all, I want to thank you both for coming. This is a really interesting committee, and we get a lot of good witnesses.

I think everybody recognizes that we need continued investment in innovation, no matter whether it's oil and gas, or natural resource development. I want to get your thoughts, both of you, on an idea that I also spoke to COSIA about. I'm going to use this as an example, it's kind of unrelated, but it isn't at the same time. The Atlantic Salmon Conservation Foundation is an organization that does investments. They invest in projects to see renewed vigour in the salmon population in Atlantic Canada, and it was originally funded by a $40-million endowment from the federal government. They can't spend the principal, but they're allowed to invest the proceeds. So the $40 million still belongs to the federal government—they can't touch it—but over the long term it builds.

It started out that they were investing a little bit every year, and now they're doing major investments every year, because they're allowed to reinvest those proceeds. I find with government that when we make investments in these sectors we do them on a very short-term basis. Five years is no time. When we're talking about mining, 10 years is nothing to a mining company. We should be talking about long-term strategic investments in mining and oil and gas.

Do you think that type of model, if it was presented at the right originating amount, would lead to a more stable base of funding over the long term?

[Carl Weatherell]

That's a great idea. We actually, with our former chair a couple of years ago, sat down with some high-profile individual investors looking at creating a foundation with their investments, versus those of the federal government, to make CMIC and the mining industry more sustainable.

So yes, we have thought about it. We never thought about going to the government for an endowment. At the time, we didn't think that would be the right way to go. We did not think any government would be interested in that sort of investment. However, we've thought about it, looking at different vehicles to fund it. Would it lead to more sustainability? Absolutely.