Natural Resources Committee on Nov. 15th, 2016

[Angie Robson]

Thank you for the question.

I would say in terms of cap and trade and reducing our carbon footprint that Vale globally recognizes the need to be part of the solution there. We've actually set a target to reduce our carbon footprint by 5% by the year 2020, and we're certainly in play in Canada. As I mentioned, with our Clean AER project, we will be reducing greenhouse gas emissions by 40%. Then there are technologies like the hydromet facility in Newfoundland and Labrador. Again, when you look at our pan-Canada emissions, they are going to be much lower than they were.

I would say that when you look at mining and you account for greenhouse gas emissions in the province of Ontario, the mining industry as a whole only counts for 1%. We're actually quite low, relative to other industries. When you look at mining globally, you see that the carbon footprint of the mining industry in Canada is very low, so from a global perspective it's in our interests to keep our mining processing facilities here, because our carbon footprint is much lower than that of other jurisdictions, such as China. I think we need to keep that in mind when we're setting policy.

We're very much in play in cap and trade, which, as you know, takes effect next year in Ontario. As for the effects it'll have on our company, for the first compliance period we estimate that it will be about $5 million to $10 million, but beyond the first compliance period, we're looking at potentially $15 million to $40 million. It is going to have a dollar impact for us, and there is some uncertainty beyond the first compliance period, because when you look at flow-through costs, like fuel, electricity, and so forth, there's no question that it's going to have an impact on our business.

That's why I think it's important that companies like Vale and governments at all levels look for solutions to help us reduce our carbon footprint. It's not going to happen overnight in an operation like Sudbury, where our mines are 100 years old. It's going to be a journey, but we're certainly willing to do the work. Moving forward, we hope to work with the federal and provincial governments so that again we can be proud and create a Canadian success story when it comes to reducing our carbon footprint.

[The Chair, Liberal, James Maloney]

Thank you very much.

Mr. Cannings.

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

Thank you.

Thank you, Ms. Robson, for being here. I'd like to thank you for bringing up the topic of indigenous training and employment, especially in Thompson and in Voisey's Bay. You also mentioned that federal funds went into some of that in Voisey's Bay.

Could you comment on the need for us to continue our expanded federal investment in K-12 education in indigenous communities, and also in post-secondary training, including trades and apprenticeships? How would that affect indigenous employment opportunities in your operations?

[Angie Robson]

Yes, absolutely. Again, we really appreciate the government's participation in terms of helping us train our indigenous workforce in Voisey's Bay, in Manitoba, and also in Ontario. Recently, there was training for the Sagamok First Nation, who we have an IBA with for our Totten Mine, and the government helped to fund an underground mining training program there, which was very successful. I think it's very important that the government continue to invest in education and indigenous communities and to work with the mining industry in terms of helping to promote what a career in mining could be and also the benefits of a career in mining.

I also think it's important for the government and industry to work together in terms of building more capacity in indigenous communities, to make sure they have the capacity to engage in things like meaningful consultation and to help educate youth in first nations communities. We certainly see youth in indigenous communities as very important as we look to the long term in terms of skill and development training. We want to integrate them more into our workforce. I think it's very important.

In addition to education, I think it's important as well that we work together to build capacity in terms of indigenous businesses. We're seeing this more and more. Again, as an example, Sagamok First Nation is looking to build an industrial park so that they can support not only our operations but operations throughout northern Ontario, and certainly, access to funding is a challenge for them.

I think the more we can work together, focusing not only on education but also on building those broader capacities and skills in the communities, it's going to be good for everyone.

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

Changing gears a bit, you've mentioned the hydromet processes that are used in Long Harbour. You've also mentioned the 100-year-old processes that are used in Sudbury, or at least the 100-year-old smelting plants.

I know that the price of nickel has been challenging lately, but are there any plans or thoughts to use that hydromet technology in your other operations to help reduce emissions there?

[Angie Robson]

Thank you for the question.

In Long Harbour, they were starting from scratch and were able to utilize that technology. Unfortunately, because of the capital constraints and the costs, implementing that technology in Sudbury is not feasible. This is why we are investing in things like our Clean AER project and looking at new technologies in order to limit the emissions that we have there.

As another example, we are moving from two furnaces to one furnace in Sudbury. That's not going to affect the nickel output at the operation, but now that the hydromet facility is built, that feed will be processed in Long Harbour as opposed to Sudbury. That's going to have some benefit for overall emissions reduction as well.

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

In the time remaining for my questions, perhaps, you can talk about the long-term view on nickel supply and nickel pricing in the world. We've heard a lot about how the government can help in terms of finding new sources of these metals. Do you want to talk about that in a broad sense?

[Angie Robson]

Sure. The market has been very challenging, as you see in the prices and the supply and demand. I think this is probably one of the longest down cycles we've ever experienced in the mining industry. What's somewhat scary about it is that a lot of the analysts got it wrong and thought that by now things would have turned around. That hasn't been the case.

There is a lot of uncertainty in terms of the world, such as what's going to happen in China and so forth. It does cause companies like ours to have to come up with ways to be competitive and profitable, both in down cycles and in up cycles. You could usually rely on the cycle to be about three years, down and up, and we simply can't do that anymore.

It is incumbent upon us to work together with government to make sure that we can be successful in both the down and the up cycles. In terms of what's going to happen in the market, I have no idea. The hope is that things will start to rebound quickly. We are focused on being as competitive as we can as we try to weather through this cycle with our other industry partners.

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

Okay.

[The Chair, Liberal, James Maloney]

You still have a minute if you want to use it.

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

No. Thank you.

[The Chair, Liberal, James Maloney]

Okay. I think that works well with our schedule. Thank you, Mr. Cannings.

Ms. Robson, thanks very much for taking the time to join us today. As I mentioned at the outset, this is a very appropriate way for us to conclude the mining portion of our study. We're all very grateful to you for travelling down from Sudbury, and we wish you a safe journey home. Thank you again.

[Angie Robson]

Thank you very much.

[The Chair, Liberal, James Maloney]

We're going to stop for two minutes, and then we're going to go in camera and deal with some committee business.

[Proceedings continue in camera]