Evidence of meeting #16 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 investment.
A recording is available from Parliament.
2:05 p.m.
Liberal
Ken McDonald Liberal Avalon, NL
Thank you, Mr. Sidhu, for that kind gesture.
I have just a quick comment, I guess, and a question for Mr. Merlini from Vale.
You operate a facility in Labrador, a mining operation, and a processing facility in Long Harbour, which is actually in my riding. I visited the facility and was quite amazed by what goes on there.
Could you comment on the future that you see for that facility and the impact that it has made on a very rural area of my riding and the surrounding communities?
2:05 p.m.
Head, Sales and Marketing, Vale Canada Limited
Sure. Thanks for the question.
In terms of the mining activities, we are now investing in an underground mine in Voisey's Bay. This was an investment of approximately $1.6 billion. It's coming online this year. This is a very important investment in order to keep producing material to feed our plant in Long Harbour. This plant, which is a hydrometallurgical plant, is very important because it produces very green nickel and cobalt. It will continue to be fed by this material coming from our underground mines and will produce for a long period the nickel and cobalt that we take there. This is our plan, and we will continue looking for other opportunities from the mining side to feed our plant in Long Harbour.
2:10 p.m.
Liberal
The Chair Liberal James Maloney
Thanks, Mr. McDonald.
Up next for two and a half minutes is Mr. Simard.
2:10 p.m.
Bloc
Mario Simard Bloc Jonquière, QC
Thank you very much, Mr. Chair.
Mr. Fung, I want to make sure you can hear me properly through the interpretation.
2:10 p.m.
Bloc
Mario Simard Bloc Jonquière, QC
I listened closely to what you said, and you piqued my curiosity with your remarks about rare earth oxides. If I understand correctly, a process similar to the electrolysis used in aluminum production can produce permanent magnets. Here's my concern: often, when a particular country is the only country that has this kind of rare earth oxide, the material is extracted and sent to other countries for processing.
A while ago, a witness recommended setting up a critical minerals reserve so that the processing part of the supply chain could happen here in Quebec or in Canada.
I'd like you to comment on the specific potential of rare earth oxides and the possibility of producing permanent magnets.
2:10 p.m.
Chairman, Torngat Metals Ltd.
I'm very happy you asked that question. That's exactly where I'd like to go.
We can produce the rare earth oxides for sale in Bécancour, Quebec. If we stop there, while in essence other countries or other places have the ability to develop further along what I call the value chain....
I am suggesting that we not only produce and sell the rare earth oxides at Bécancour, Quebec, but we go further downstream where we produce the actual magnets. Then, if possible, we produce the actual electric motors in Quebec to sell to the world.
That's where I am coming from with respect to this. The further downstream we can go, the better off we are. I am not a supporter, frankly, of us producing rare earths and selling them all over the world to other places. I would like to see us developing as much of a downstream operation in Canada as possible.
2:10 p.m.
Bloc
2:10 p.m.
Liberal
The Chair Liberal James Maloney
Mr. Simard, you only have about 20 seconds for a question and answer.
2:10 p.m.
Bloc
Mario Simard Bloc Jonquière, QC
Mr. Fung, would it be possible for you to send your documentation to our analysts? I'd like to dig into this issue.
Thank you for your testimony.
2:10 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you.
I'm going to turn to Mr. Bahar.
We've heard a lot about the rare earth metals, but it strikes me that when we're talking about electrification of our whole energy system, one of the elements we have to talk about is copper. If we're going to move that electricity around, we'll need a lot of wire.
I wonder if you want to spend some time commenting on Canada's opportunity in copper. I know copper mining built my riding 100 years ago. There are still some big mines just outside my riding.
Could you talk about copper, our opportunities there and what we can do?
2:10 p.m.
Managing Director and Co-Head, Global Metals and Mining, BMO Capital Markets
Sure, I'd be happy to.
I completely agree with your comments. Copper is critical for this transition. Think about charging stations alone and the need for copper to support electric vehicles. Canada has a great skill set in copper. There are many mines throughout the country in various provinces. We're a big producer.
Mr. Merlini spoke about Vale's copper production. We have mines on the west side of the country and mines throughout. As well, a large number of junior companies are looking for funding to either explore for mines or develop mines.
We have a clear skill set. I think the capital markets are well aligned across base metal companies. The world will absolutely need more and we're well positioned to deliver it.
2:15 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
To continue on with that, in terms of developing these new mines, both you and others talked about getting more clarity and more efficiency in moving these mines along. Several people have talked about the role of indigenous people in the mining industry.
I wonder if you could comment on how implementing the principles of UNDRIP might bring some of that clarity to the industry and help us in that regard.
2:15 p.m.
Managing Director and Co-Head, Global Metals and Mining, BMO Capital Markets
Obviously, a number of competing factors are at play. Capital markets like to see processes streamlined and like to see investments advance exploration to development to mines. Certainly that's what investors like to see.
Government obviously has to weigh a number of factors in allowing development to happen to make sure that those factors are considered appropriately, while at the same time satisfying investor needs.
I think there's a balance at play. For us, I come back to what I said initially, which is that whatever can be done to streamline processes is constructive and positive for supply chains in Canada.
2:15 p.m.
Liberal
March 12th, 2021 / 2:15 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Thank you, Mr. Chair.
This question might be best directed at Mr. Fung from Torngat.
You were talking about dirigibles and things like that. It's one thing to get the mines approved. It's one thing to get the production going, but if we don't have the supply chains to connect these mines, many of which are in remote areas, to the networks, then we're not going to get the kind of production and growth that we need.
I would note that with countries like China with their one belt, one road initiative and numerous countries, it's really the governments that are investing huge in the infrastructure, sort of with the mentality of “if we build it, the companies will come”.
I wonder if you could comment on what Canada's strengths or weaknesses are when it comes to supporting the mining industry through infrastructure.
2:15 p.m.
Chairman, Torngat Metals Ltd.
First of all, I won't comment on the mining sector as a whole, but I will comment specifically on the rare earths.
The issue on the particular rare earth situation is that when you have a country like China controlling so much of the world's supply, they can move that commodity price up and down, as they did in 2011. They have the ability to move it from what in essence is a profitable entity into a losing entity. That's why you need the government to step in to go alongside investment and say they understand what's going on, but they are saying to the marketplace that this is going to happen. We are going to be a producer of these particular rare earth oxides, which are needed to make the permanent magnets for electric motors. Once the government steps in alongside the private investor to get this done, the marketplace will then step in.
What the marketplace is concerned about is the fact that when you have a state like China controlling so much of that market, they can move that commodity price up and down. That is the issue with the rare earths. That is not the issue, as I understand it, right across the mining spectrum.
2:15 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Then the manipulation of the prices of these rare earth commodities is destabilizing investment in this industry. Do you think it's being used as a political power tool to prevent other countries from effectively developing their own rare earth mineral industries?
2:15 p.m.
Chairman, Torngat Metals Ltd.
I won't comment on the fact that it is being used as a power tool. Let me suggest something, a way for you to take a look at it as the Government of Canada.
Think in terms of, let me say, a triangle. You have trillions and trillions of dollars of industry sitting on one particular point. What is that one particular point? It is literally the key piece of all the technological industries. It's the rare earths. We happen to have them here in Canada, which is why I'm imploring the Government of Canada not to lose this opportunity.
This is not something that's occurring all over the world. Outside of China, it's us in Canada and Australia. The Australians have taken the lead. They're maybe a year to two years ahead of us. We have the ability now, as we're sitting right next to the largest market. If the Government of Canada steps in, as an example with Torngat, and says to the marketplace that we are going to supply this material by 2025-26, whatever the time frame is that you decide, industry would look at that and step up.
2:20 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
You broached a really important point here. You're talking from an economic perspective, sitting on this very important pillar, the rare earth metals. I'm wondering if you could comment on this from a national security perspective. This is the natural resources committee, but we know access to these minerals is critical for our national security and the national security of our allies, especially in NATO.
I'm wondering if you can comment on how the failure to get this right could impact our national security.
2:20 p.m.
Chairman, Torngat Metals Ltd.
That's the image I just tried to paint for you in, let me call it, too subliminal a manner. Again, think of all these industries sitting on this pinpoint, the rare earth industry. That rare earth industry is today controlled by China. We have the ability in Canada to step in and be that pinpoint, right next to this massive economic juggernaut south of the border.
From a national security point of view, I would like to remind this committee to think back to about a year ago when we had the issue when essentially we were looking for PPE coming from south of the border, when we had to throw everything on the table. We had to put all the chips we had on the table to make sure we had this PPE. This is a very serious chip.
That's what I'm trying to implore you to think about.