Natural Resources Committee on March 8th, 2021

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Thank you, Chair, and thank you, witnesses.

Grand Chief, thank you for being with us today. I appreciate what you've brought up. We have lots of potential here in Canada, and you talked about the potential investment and potential of indigenous communities benefiting from some of these developments, the mining developments.

I'm up in northern B.C. with oil and gas. It's huge. It dramatically affects our indigenous populations in a positive way, bringing economic activity to really everybody in the north, but we see this challenge. We heard from Mr. Coates, who talked about this endless delay in the regulatory approval process.

I have just a simple question: How can we do better as regulators to make this process better?

There have been other answers given in part to that question, but can I start with Grand Chief Bosum? How can we do better as regulators with these projects, to see us get across the finish line sooner?

[Grand Chief Abel Bosum]

One is that there needs to be a process where the information gets to the people who will be impacted. We have established what we call “pre-exploration agreements”. They are non-binding, but it allows people to understand the project, provide input into the project and build trust with the industry. Then it's a lot easier as you go along. You gain partnership as you do it.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Yes. I think we've come a long way with certain companies in Canada, too. It used to be that first nations weren't consulted until halfway through the process.

To me, it has come a long way. Again, it depends on the company, but in having those conversations with the indigenous communities that are going to be affected right from the start of those negotiations, I have seen the ones that do that have mutual respect for each other and success as a result.

I want to talk to Mr. Coates and Mr. Steward about the same question. We were talking earlier about this. Previously, in about 2011 to 2015, we had a pretty solid approval process that projects would go through, and they had a 24-month period as a timeline to get from start to finish. It was better for certainty, it was better for investment and it was better for everybody around, but we have slipped from that timeline quite a bit.

My simple question to you is this: Where is Canada in the approval process for projects globally? Certainly Canada is not the only country that has resources, but where do we stack up in terms of that timeline?

Mr. Coates, you referred to that first in your statement, so maybe I will ask you.

[Dr. Ken S. Coates]

Sure. I'll give you a brief answer.

There are some countries that have almost no regulations and controls. In fact, they allow almost a free market type of approach, so that the companies themselves put the limits. In fact, Canadian companies are very good at this. They notionally apply a Canadian standard to their activities and operations, but that's not the government imposing those limits. It's the mining companies doing it.

There are places like Scandinavia that are actually reintroducing their mining sector, and they are coming to Canada to see how we are doing. Australia is a lot faster. Russia is a lot faster, not a bad example. Mongolia and China, these countries are faster. They're not role models.

My point would be that we can do an awful lot better. We can basically do it by starting where you mentioned, letting people know how much it costs for these delays to occur and letting them know how many projects have disappeared because, in fact, the mining company looks at it and says that it is too risky for the kind of time frame they have.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Right.

Mr. Coates, you've talked about it as well, that a more lengthy process isn't necessarily a better one. We've seen this. It has been part of the project history where I'm from, where these projects sometimes go through a 10-year process, and finally, by that particular time, the project is no longer even viable.

Can you explain a bit about what you meant? I believe, as do probably many in this meeting today, the world needs more Canada, not less. Certainly we have the best environmental standards and the best human rights standards in the world. Again, we need to develop our resources here, not only develop them but value-add and do as many parts of that process in Canada as we can before we export that product.

Can you explain the statement you made earlier, that a lengthy process isn't necessarily a better one?

[Dr. Ken S. Coates]

Yes.

[The Chair, Liberal, James Maloney]

I can give you about 30 seconds to answer that.

[Dr. Ken S. Coates]

Okay.

Go fast. Be solid. Focus on outcomes. Don't focus on the decision-making process. Trust aboriginal folks. The aboriginal folks live on their territories and their land. They will look after it better than any regulatory process will ever do.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Thank you very much.

[The Chair, Liberal, James Maloney]

Fantastic. You went fast. Thank you.

Mr. Lefebvre, we'll go over to you for five minutes.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair, and thank you to our witnesses for appearing before us today.

Mr. Coates, those were interesting comments you made about how we should proceed, certainly when we talk about assessments and regional assessments. I know that's one of the things that our government has brought forward. Actually, one of the initial ones is in the Ring of Fire in northwestern Ontario, where there is a regional assessment being done right now by ECCC to make sure that the baselines are there. Your suggestion is something that has been heard many times by the department federally, and it's certainly a way to move forward.

I know that Mr. Zimmer talked about how we can get indigenous participation up front, not at the tail end. I fully agree with him. That is the way. In any successful project, that's what they've done and that's what we've also tried to integrate into the impact assessment, the new review process. I don't want to get into a debate as to CEAA 2012 and the new impact assessment—as you said, it's early days—because we're here to talk about critical minerals, although this is part of it, certainly.

I'd like to chat with Mr. Steward with respect to Rio Tinto. It's an international company and a very large company. The purpose of the discussion here is how we ensure that the supply chain of our minerals and metals is secured in Canada and how we go about maximizing it, getting all the value added that we can in Canada.

Obviously, as an international company, that's not really your focus. Your focus is obviously on getting the best value for your efforts. Can you give us a sense of what's going on in Australia and maybe in other jurisdictions where they're having these discussions? Can you share that with us? These discussions are not just in Canada right now but all over the world.

We want to protect all of these minerals and metals as much as we can to ensure them for our renewables industry and obviously for our battery industry. As we electrify our world, this is so critical. Can you give us a bit of insight into what's going on elsewhere?

[Dr. Nigel Steward]

Sure.

As you've said, there's activity everywhere. I think there's quite a big rare earths play in Australia at the moment. Also, there's been a lot of interest in lithium there as well.

When you look around the world, you can see that the world's geological deposits aren't evenly distributed. We go to the countries where the minerals are, and every country has its comparative advantages because of that.

When I look at Canada, I think Canada has some unique advantages when you think about the future. We are finding a lot of these critical minerals within our ore bodies that we're exploiting already, so I think just continuing with that type of work, as I've explained.... Also, when we start to think about steel-making for the future, for example, and the zero-carbon steel-making process, this is something that's of big interest to us as a company, because we provide a lot of iron ore. One of the best iron ore deposits that's best suited to those future steel-making technologies exists in Newfoundland and Labrador at Iron Ore of Canada.

You can see that there are these sorts of relative comparative advantages, and they're geological in nature.

[Paul Lefebvre, Liberal, Sudbury, ON]

We've heard that from many witnesses. I think what it boils down to—and we have unanimous consent here, I think—is how we make sure that critical mineral processing and manufacturing capacity is increased in Canada. Certainly, we don't like it when we see certain of our minerals or certain of our natural resources exported and then manufactured elsewhere. Again, how can we increase that supply chain?

From your lens, what can we do or what should we do to ensure that processing? We have some, obviously. I'm the MP from Sudbury. We have two smelters in my riding, which is kind of rare. As well as the whole manufacturing process, there is all the upstream stuff. What are your thoughts?

[Dr. Nigel Steward]

The key thing is that, especially with the critical minerals, as I mentioned earlier, there's a lot of price volatility because these are new industries. We see the same thing with lithium. There is a lot of price volatility in lithium.

The only way you can ensure production at a particular mine site is to make sure you have the ability to absorb all of those fluctuations in price. In other words, it means being a low-cost producer. If you can be a low-cost producer in a country, in a commodity that has quite volatile pricing due to the supply-oversupply issues as demand grows, then you'll be a player in the long term.

Really, the key thing in the mining industry, if you're going to enter a particular market that you know will be volatile as it starts up—which is what we're talking about with these critical minerals in all of these new applications for a low-carbon future—is that you're going to need to make sure you're at the bottom of the cost curve.

[The Chair, Liberal, James Maloney]

Thanks, Mr. Steward and Mr. Lefebvre.

We will go back to Mr. Simard for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

I'll continue along the same lines as my colleague, Mr. Lefebvre.

I have a question for you, Mr. Steward.

You said earlier that you can't do secondary or tertiary processing because of the ecosystem, which is mostly based in the United States. My concern, in terms of critical minerals, is that the same ecosystem will be established again, where the transformation won't take place here. As a large company, you also have a responsibility. As a member of Parliament, when it comes to aluminum and critical minerals, I'm interested in the creation of jobs here.

You spoke about ELYSIS earlier. As we know, the new technology will require fewer employees. It's annoying for a member to make announcements that mean fewer jobs in the region. I imagine that you agree with me.

In your view, how can Rio Tinto ensure that, in clusters such as the aluminum or critical metals cluster, there are jobs in the communities where the industries are located?

[Dr. Nigel Steward]

Take ELYSIS, for example. It's a large collective investment of about $167 million. We're currently proposing something in Saguenay—Lac-Saint-Jean.

First, I'm not sure that there will be fewer jobs, since we need to create something new. We need to manufacture a new type of high-tech ceramic and high-quality sensors. These are completely different technologies. We have all these opportunities ahead of us.

Also, rare earths are used in very complex applications. However, the people who need them are already our customers. We supply these raw materials to our customers, who are often in the United States. We would like to encourage the manufacturing of this type of material or high-tech application in Canada, but most of our customers who want this type of product are currently in the United States.

[Mario Simard, Bloc, Jonquière, QC]

Yes, exactly.

I just want to point out—

[The Chair, Liberal, James Maloney]

Thank you, Mr. Simard.

[Mario Simard, Bloc, Jonquière, QC]

Okay, thank you.

[The Chair, Liberal, James Maloney]

Mr. Cannings, we'll go over to you, sir.

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

I think I will continue with Mr. Steward.

Unlike Mr. Lefebvre, I have only one big smelter in my riding, and that's the Teck smelter at Trail, a big lead and zinc smelter. It produces some rare elements in the same way that you were mentioning, Mr. Steward. I think it's mainly germanium and indium that they produce. They're one of the world's top producers of those commodities. Again, it's small amounts, but they're very important, very valuable commodities.

Rio Tinto is a big worldwide company—one of the biggest. I'm wondering if you have any examples elsewhere in the world that Canada could follow.

How does Canada's strategy around critical minerals, critical metals, compare with, let's say, Australia's strategy? What could the federal government be doing to make it easier for us to find these materials and to create those value chains, as you seem to be doing with scandium in Quebec?

[Dr. Nigel Steward]

From our perspective, there were conversations earlier about permitting and getting projects going, I think, at the very beginning. We're finding that actually Canada is very good relative to other parts of the world. What's particularly important in the speed is not so much the structure of the legislation, on which Canada is actually very good and very thorough. It is about building trust with all of the stakeholders involved and moving quickly there.

Building that trust and working collectively together, particularly with first nations in the case of Canada, is very critical. It's all about trust. It's the trust that actually builds the speed. This is why, when there are failures of trust, you have to go back and redo things, and that forms the delays.

I also think that one useful thing Canada has, which is pretty unique—and we applied it in Diavik mine—is that the operating permit right from the very beginning not only looked at the development of the mine itself, to get it operating, but also had to include what the plans were for the closure at the end. We're looking at the environment in a holistic way. I think that's the other unique thing we see in Canada.

In terms of encouraging the industry, really what it comes down to is the quality of the ore bodies. That means good exploration. Canada is very open to exploration. We find Canada to be very open and very good when it comes to exploration. We have many ongoing exploration activities in Canada.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Steward. I'm going to have to interrupt you again. You can't say that I didn't warn you at the beginning that I'd be doing this a lot. I apologize.

Thanks, Mr. Cannings.

Mr. Patzer, it's over to you for five minutes.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much.

I'll start with Mr. Steward as well. In looking at the underdevelopment of critical minerals in Canada. In your opinion, how long will it take for us to have everything in place for developing our own battery industry?