Evidence of meeting #13 for Natural Resources in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was lithium.
A recording is available from Parliament.
Conservative
Bob Zimmer Conservative Prince George—Peace River—Northern Rockies, BC
Yes, exactly. Let's move on.
I think we are all concerned by that. We see it again with Tanco in Manitoba, with cesium, and the potential that's there for us domestically, but we're basically handing that over to a country that may withhold that product in a world that's going to desire that product.
I guess my question really is about getting to the bottom of what we can do. We all know that capital is important. We all know that even foreign investment can be very important to the mining sector. The reason why mining companies go for capital outside our borders is that they can't find it inside, domestically.
I'm sure that most of our companies would love to be Canadian-only companies, have investors from Canada, produce products for Canada and see that success, whether it's developing the raw resource or the refined product. We already talked about the value. Mr. Deith talked about how graphite can go from $1 to $5 just based on some refinement and some value adds here in Canada.
What can we do so that our mining industry is domestically healthy, so that the mining sector and the related raw and refined materials aren't so much at risk? I know that many of you have spoken to this already, but can you be more specific? This is where we can change things. We can make it more competitive. We can look at what the regulations are for you. We know that the regulations around mining are, I would say nicely, extreme.
Maybe you can speak to that. What can we do in a positive way to best strengthen our industry and protect ourselves from that foreign takeover?
Let's go to Ms. Lappin, Mr. Moores, Mr. Deith or the Yukon chamber. Any one of you can go ahead.
President, Battery Metals Association of Canada
Some folks had their hands up, so I will let them go first. Then I can jump in.
President and Chief Executive Officer, Avalon Advanced Materials Inc.
If I may, I'd like to comment on your question on China.
Conservative
President and Chief Executive Officer, Avalon Advanced Materials Inc.
We have to be careful not to overly generalize. Not every Chinese company is controlled by the Chinese Communist Party. I happen to know for a fact that the company that took control of the Cabot Corporation and the Tanco mine in Manitoba is an example of a very entrepreneurial publicly traded company in China that is not controlled by the Communist Party.
Many companies like them are open for collaboration with Canadian companies. Because we're still at the very early stages of starting these supply chains, we need to be able to have that door open, too, to be able to work sometimes with Chinese companies.
Conservative
Liberal
The Chair Liberal James Maloney
I'm going to have to stop you there, Mr. Zimmer, unfortunately. Your five minutes are up.
I was mistaken earlier. We have another half hour. We're not stopping at 12:15 p.m.
Mr. Lefebvre, you have the floor for five minutes.
Liberal
Paul Lefebvre Liberal Sudbury, ON
Thank you, Mr. Chair.
It's a very fascinating discussion today. I'm joining you from Sudbury, Ontario. We call ourselves the mining innovation capital of the world, with everything going on here. There are nine operating mines.
Before I get into my questions, I find Mr. Zimmer's comments very interesting, because he was going down that road about takeovers here last week as well. Here I am in Sudbury, and back in 2007 we had two Canadian companies—Falconbridge and Inco—that were taken over by foreign companies. It was actually the Conservative government at the time that allowed it. Minister Clement actually said that Sudbury had to do that because it was the “Valley of Death” up here and there was no future in mining. Anyway, I just find it.... Thirteen years later, look at how our role has changed. We all realize the importance of hardrock minerals and metals and the importance it will have in our economy.
Again, thank you so much for joining us. There's so much I want to talk about.
I liked that expression, “from mine to sale”. Mr. Moores, I think you're the one who mentioned that.
Mr. Moores, what we're hearing a lot about here today is that we need to put in measures or regulatory policies to say—and I think most Canadians would agree—that we need to have a made-in-Canada solution and a supply chain that is in Canada. Now we're trying to determine what the gaps are, where the opportunities are, and what measures we need to put in place. That's what Mr. Zimmer was asking you about. What concrete measures do we need to put in place that we can provide in our report and give to Parliament?
What are countries other than China doing? I know that Australia is also looking at this very seriously. I know that they have engaged with Canada to see how we can collaborate. Very quickly, I want to know what other countries are doing in this space that we're not doing.
Mr. Moores, do you want to start?
Managing Director, Benchmark Mineral Intelligence
Yes, sure. I would look at what the European Union just announced two weeks ago, $3 billion into the battery value chain, as they call it, the supply chain. That is direct federal investment into, say, the top 10 companies in each stage of the chain: mining, chemicals, cathode/anode, battery cells. It's coherent. All those companies are talking to each other through various mechanisms like the Battery Alliance. The funding as well, and the legislation, are all linked up together in one. I think that would be a success as a result. I don't think Canada has done anything at that level yet.
Liberal
Paul Lefebvre Liberal Sudbury, ON
Thank you for that. It means we should probably get the EU representative on that file to come to this committee to explain their policies and what they're doing.
What is Europe's intention of getting their minerals and their metals to do the batteries? Obviously, they have some in Europe, but not all of them, I would guess, so what are the intentions there? Where are they going to be extracting or purchasing these resources?
Managing Director, Benchmark Mineral Intelligence
Yes, lithium, for example, from countries like Australia, countries like Canada—
Liberal
Paul Lefebvre Liberal Sudbury, ON
Exactly, and with that, I'll talk about the elephant in the room here. If Canada says, “Well, you know what? We're not going to be exporting anything. The minerals and metals, we extract them here and process them here, and we want the value added to be done here with the measures we would put in place”, how would a region like Europe react to that?
Managing Director, Benchmark Mineral Intelligence
They're also beginning to invest in their own domestic sources, but they're very early-stage, not in production. That's a long-term game as well. They know what the long-term solution is: They have to produce at least some minerals themselves. That's a big step for a region like Europe.
Liberal
Paul Lefebvre Liberal Sudbury, ON
For sure, because they're not there yet, and that's why a country like Canada with an abundance of that.... I think we've been a bit slow or a bit indifferent, because we're happy to extract and, in certain cases, to process, and after that, the value added is basically sometimes shipped around the world.
Mr. Deith, I really enjoyed your presentation as well, because you're at the forefront of that. You're developing a mine and you're feeling this right now. Certainly, as a Canadian, you want to see how we can do this all in Canada and how we can all benefit from this from coast to coast to coast. I know you talked about some measures, and I'd like you to maybe re-emphasize the challenges that you're seeing and what the federal government could do to really enhance putting in the measures to create this supply chain across our country.
Chief Executive Officer, Eagle Graphite Corporation
First, to summarize the issue, we can develop the capacity to extract the minerals, as you rightly point out. At the moment, there is no further processing domestically that we can sell to, so there is no value-added processor that we could sell to. That leaves us with the choice of developing it ourselves, which we're happy to do, but, like everything, it requires capitalization, and the framework is not there to encourage that capitalization. In part it's because a value-added processor currently has nobody to sell to further on.
There are two or three stages in this. You have to have initiatives that encourage all of those things to be put into place so you see the processing developing at multiple stages all at the same time. Then everybody can come online and start feeding through a system.
One other comment I'd like to make—
Liberal
The Chair Liberal James Maloney
I'm going to have to interrupt, Mr. Deith. I apologize, but we're beyond our time, so we have to move on.
Liberal
Bloc
Mario Simard Bloc Jonquière, QC
Thank you, Mr. Chair.
Mr. Deith, in your presentation, you said that Canada has two options: either we remain a supplier of raw materials or we move into secondary or tertiary processing. You said there's a gap in Canada in that regard. You ended by saying that there were many good ideas, but you didn't have time to list them.
My question is for everyone.
Can you briefly tell us what your first steps would be to develop this critical metal sector in Canada? In the short term, what could be done to advance the Canadian ecosystem around critical materials?
Chief Executive Officer, Eagle Graphite Corporation
In terms of concrete suggestions, I know it takes time to set up new programs. It even takes time to thoroughly analyze them. In the way of a specific suggestion, there is a successful framework under the METC grant program for encouraging prospecting and the actual finding of minerals. That has proven to be a very strong incentive to quickly bring investors online in order to encourage the finding of minerals.
That program currently does not help us in terms of developing the secondary and tertiary processing that has to go after that. One of the recommendations that I would have is to either expand or redirect some of the resources dedicated to the METC grant program into developing this sector.
I would encourage that it be very targeted. I don't think we want to be subsidizing every industrial facility that people have in mind. I think we have to decide, as a country, that this is a priority item, so therefore we will encourage specific development of this type of process. That is one solid thing.
I would emphasize that it is going to have to be a coordinated effort. It's going to require stakeholders from all across this sector in order to have a fully coherent program that gets political buy-in almost universally.
I hope that helps.
Liberal
The Chair Liberal James Maloney
It does. Thank you.
We'll have to stop there and move on.
Mr. Cannings, it's over to you, for two and a half minutes.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
I'm going to turn to Mr. Bubar, who finished up his presentation talking about tailings extraction and the opportunities there. Tailings fields are scattered across Canada. They are certainly all over parts of my riding.
Can you expand on that particularly, not just the opportunities but what percentage of the production of various minerals might come from reprocessing a tailings field?
President and Chief Executive Officer, Avalon Advanced Materials Inc.
There is starting to be more interest in this from the federal government. There's a national organization for abandoned mines sites. Traditionally, they are viewed as perpetual liabilities and no-go zones, but they are starting to do some research on them to see what's there. In most cases, we don't really know until we go in, do some sampling and analyze some material to see what's there, and how it occurs. After you've done that, you can start to develop some ideas on what can be done there.
That's just getting started, actually. I've been able to get into a few sites that have allowed us to do that. I'm very inspired by how many possibilities there are now. Some major companies are also starting to think about this. You may have seen the news that was published by Rio Tinto on how they are now recovering the rare element scandium from titanium mine tailings from their operation in Quebec.
It's now starting to get thought about by other current producers, too, as a means of producing these non-traditional minerals that are in the waste streams from existing operations. It's an exciting opportunity. As I said earlier, it's a matter of creating a new precedent for doing this to show everyone else how this is possible, what kind of an opportunity it represents, and then allow entrepreneurial companies, like us, to start evaluating them.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
What are the barriers for that action? If you have an abandoned mine site with a lot of cost, which a lot of the time the government has taken on, especially north of 60, and perhaps various provinces, do companies like yours, which want to go in there and look for these elements, have to assume some of those risks? What are the barriers to actually going in and doing that analysis?