Natural Resources Committee on Feb. 22nd, 2021

[The Chair, Liberal, James Maloney]

Thanks, Mr. Deith, and thanks, Mr. Patzer.

We'll move on now to Mr. Weiler for five minutes.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Mr. Chair, and thanks to the witnesses for joining us today for some very interesting discussions.

My first question is for Mr. Bubar. You mentioned that you have a number of exploration projects for a number of rare earth elements. You mentioned that demonstration projects funded by the government on different topics would help with this. What is needed to bring these projects into production, beyond simply going through the regulatory process?

[Donald Bubar]

As I mentioned earlier, the Saskatchewan Research Council has created a very positive precedent there for a modest-scale demonstration plant to process rare earth minerals and also a facility to do the separation part of the processing required to make the individual rare earth oxides. That's where a lot of the costs and challenges are for aspiring new producers.

Getting that started is actually helping us with our project in the Northwest Territories, where we have an Australian company now as a partner. They are now working directly with the Saskatchewan Research Council on getting that started. Once we do, then we see the potential there to grow production over time as we get the market established and can expand production capacity. That's the way you have to look at these things.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Just as a follow-up to that, apart from China, what other countries are doing this effectively right now, and what can we learn from them?

[Donald Bubar]

Not many. China has been way ahead of us on this all along, recognizing that they have to build out the downstream to justify the development of the upstream side. It looks like the EU is now starting to really take the reins on it over there, from what Simon was saying earlier and from what I've been witnessing.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

My next question will be for Mr. Moores. I understand that one of the ways Europe is looking to source inputs for batteries is actually recycling batteries that are at the end of life. I was hoping you could comment a little bit on that and what Canada could learn from that as well.

[Simon Moores]

Battery recycling is a really important part of this ecosystem, not just to be responsible in closing the loop, but simply to get rid of these batteries; otherwise, at their end of life you're going to have mountains of lithium-ion batteries down the line. This is a post-2025 thing.

The other key thing is, if you're recycling the battery, it doesn't necessarily mean you can use the lithium out of there or the cobalt out of there in a new lithium-ion battery. I think that's kind of a misunderstanding. That stage of taking out lithium and putting it back to use in a battery hasn't really been cracked yet in a consistent way.

There are still challenges to remain, but the Europeans are pushing ahead with battery recycling and the amounts of recycled components reused in a battery, just because they want to set the tone on making a responsible supply chain. I think right now that's where we stand.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thanks for that clarification.

I was hoping you could maybe speak to the level of risk that's out there right now when a country like China controls.... Maybe it's not a monopoly, but a controlling stake in a particular mineral, having the ability to shift the price and oversupply the market. When another country looks to get involved.... How can countries like Canada respond in a situation like that?

[Simon Moores]

Certainly in our industry, I think it's really about controlling the capacity in the supply chain and what I call the sway of industrial power. I think Canada's response is simple—you build the industry, and you build the competencies and capacity for yourself. Batteries and electric vehicles are going to have a huge market in every continent of the world. They're replacing pretty much every car on the road. There are going to be energy storage systems.

You've seen what's happening in Texas with the snow storms. Cities are going to build battery capacity as backup power and for more flexible grids. These are all lithium-ion batteries, so I think the response should be that you just have to build regional domestic capacity, not just for the country but for the continent.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

This last question is for Mr. Hartland. You mentioned some of the challenges in this, but I was hoping you could speak a little bit more to the challenges of extracting and processing critical minerals in remote and isolated or northern communities.

[The Chair, Liberal, James Maloney]

Give a very quick answer, please.

[Samson Hartland]

I'll do my best.

We do have a complementary road network. However, there are access points that need to be built in order to be able to get into the most strategic areas of Yukon. We are strategically located close to an open-water port. Skagway is only a couple of hours away from Whitehorse. Getting minerals to markets and refinement is quite advantageous for where we are in relation to Alaska. Of course, we do have domestic deepwater ports available to us as well in the port of Stewart.

With all that said, typically our stuff does get transported down to Trail, British Columbia, where it is right now. There's a particular project that is extracting a critical mineral, indium, out of the Keno Hill project, but it doesn't get a payback for it, and I don't understand where that mineral goes. This is the whole downstream effect that we're talking about in terms of where the critical minerals can be extracted and how they can be refined. There are some opportunities, and I know some people online here know more about that than I do.

I hope that helps provide some perspective.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Hartland and Mr. Weiler.

We have Mr. Simard for two and a half minutes, and then we will finish with Mr. Cannings for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Something piqued my curiosity earlier. I think it was Mr. Bubar or Mr. Deith who made the comment.

You said that a reserve of critical minerals could be a solution. This raises the question of the percentage of extracted minerals that are exported. What percentage of the minerals isn't processed or treated here?

Mr. Bubar and Ms. Lappin, do you have any statistics on this? What percentage of the extracted critical minerals is directly exported without processing here?

[Donald Bubar]

There aren't very many being produced now, and if you do, you have to ship them offshore because there is no refining capacity at the present time. I think a lot of the problem is that this has been the culture of the mining industry historically, to just make the concentrates and then ship them somewhere else for all the downstream value added. It's never been a part of the culture of the industry in Canada to create value added. It's still a learning curve for everyone to climb on this.

[Liz Lappin]

To add to that, if I may, specifically with respect to Nemaska, Nemaska was going beyond the concentrate to a battery-grade material. That was something that was specifically new to Canada's mining industry, and there's also the direction that the lithium industry in Canada is considering, to make battery-grade materials that can meet the spec of OEMs.

[Jamie Deith]

Speaking for our own operation, our primary offtaker is in the United States, and I would estimate that this accounts for about 85% of the value. That's unprocessed material from the concentrate level, but that's not made for battery input. It's actually for an indirect steel input.

There are some materials to which we have been able to apply some value added, and they are actually shipped domestically. We have a couple of customers domestically, including a graphene customer, and I would describe that as more thorough value added than even battery minerals would be.

[The Chair, Liberal, James Maloney]

Thanks.

Thank you, Mr. Simard. I'll have to stop you there.

Mr. Cannings, you are last in the batting order today.

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

Thank you.

I'll go to Mr. Bubar again, to get some more details on these really rare minerals, metals, things like germanium and indium. You mentioned cesium. I know Mr. Hartland mentioned indium that goes for processing to Trail, British Columbia, in my riding. I know the tech smelter there is a big world producer of germanium and indium, largely I think from its lead-zinc smelting out of the Red Dog Mine in Alaska.

I'm wondering if you could finish by commenting on Canada's potential for these types of metals. Maybe you're only producing 20 kilograms of it, but you can become a big producer at that scale. Where are we in Canada for those materials?

[Donald Bubar]

We're in the very early stages, frankly.

Indium often occurs with zinc, and that's why it's recovered from the zinc ponds at the Trail smelter, but it occurs at higher concentrations in other types of mineral deposits. One of them is tin greisen, of which we have a classic example in southwestern Nova Scotia, where it is very highly enriched. There's also zinc there, but these elements can be recovered from the same resource.

As I mentioned earlier, there's also all sorts of lithium in the country rocks to the tin mineralization there, and similar resources in Europe—in Cornwall, England and in the Czech Republic—are now being looked at as an opportunity to recover lithium, as well as indium and tin.

Tin is an electronic metal now, too. Most people think of tin as in tin cans, but no, it's a tech metal. It's used in renewable energy applications, too, and there's no supply chain on it in Canada or North America.

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

Mr. Chair, I'll just leave it there.

Thank you very much.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Cannings.

That's unfortunately all the time we have for questions today.

I reiterate my thanks to all the panel members, our witnesses. I have to say, that was a very entertaining and very informative panel. I want to add, too, that it was maybe the most polite panel I've ever seen, because I've never seen witnesses use the “raise hand” function with that frequency before. Maybe we should consider that as a committee and adopt that going forward. I don't know what you guys think, but it's just a thought.

Again, thank you. We appreciate it. You can all sign off now.

We have to carry on with some of our own ongoing business. Enjoy the rest of your day—or, for Mr. Moores, your evening.

[Greg McLean, Conservative, Calgary Centre, AB]

Thanks, gentlemen and ladies.

[Jamie Deith]

Thank you, everyone.

[The Chair, Liberal, James Maloney]

Moving back, then, to the discussion about the motion, the amendment and whatnot, I think where we left off I had indicated that I am accepting the amendment as appropriate, and then we were going to see if there is any more discussion now on the amendment before we vote on it.

Mr. Cannings.