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.
2:30 p.m.
Liberal
The Chair Liberal James Maloney
Thank you, Mrs. Falk. You're right on time. That's always appreciated.
Mr. Lefebvre, it's over to you for five minutes.
2:30 p.m.
Liberal
Paul Lefebvre Liberal Sudbury, ON
Thank you, Mr. Chair.
Again, thank you to the witnesses for being here. This is something that is dear to my heart, as I've said before, being in the nickel capital of the world. We call ourselves the mining innovation capital of the world as well.
Before I ask some questions of the Vale folks, Mr. Fung, you talked a lot about China and their role. The challenge we have is that China's economy is not like Canada's. We're a market-driven economy and they're a state-owned economy. They get to pick and choose which lane they're going to go in and basically put all their efforts and control into their markets.
That being said, you mentioned as well the importance of multilateralism in this file with Australia, the U.S. and the EU. What are your thoughts on where we're at in that space now, and where do you think we could put more effort into that?
2:30 p.m.
Chairman, Torngat Metals Ltd.
That's a really loaded question. I think the first thing we did was we essentially recognized that there is an issue. I mean, how was it possible that we could actually let ourselves get into a position where one state controlled so much of a product that is vital to all economies? The first thing we did was to recognize that there is an issue.
The second thing we're doing, which I think is correct, is essentially trying to strategize with respect to who has what, in what markets, and where our strengths and weaknesses are. We know where the two big demand markets are. The first big demand market is the United States. The second big demand market is essentially the EU. Then you can pick up wherever else you want to pick up.
A lot of the manufacturing today, especially in this particular issue that I'm talking about, the making of electric motors.... Essentially, most of that is done in the east. America has recognized its vulnerability. The Europeans have recognized their vulnerability. They're beginning to put in place the new supply chains. Those multilateral conversations are taking place.
From Canada's point of view, I am trying to point out to Canada that within that entire spectrum, we have a very, very unique opportunity. That's the opportunity that I am trying to point out that we have to focus on.
2:35 p.m.
Liberal
Paul Lefebvre Liberal Sudbury, ON
Thank you. I appreciate that.
Ms. Concepcion or Mr. Merlini, perhaps I can ask you to opine on that as well. Your company is international. You have assets not only here in Canada but around the world. How are you seeing these market forces? Again, in my first intervention I talked about having a made-in-Canada solution. Having everything here would be the best-case scenario from a Canadian perspective, but from a market perspective, that's not always the case due to market forces and certainly the multilateralism that comes into play.
In your experience, certainly being an international company, how do you see this space developing on the nickel side, the cobalt side and the copper side in the building of that value-added chain? What challenges and opportunities do you see because of this world structure that we have now with the geopolitical situation?
2:35 p.m.
Head, Sales and Marketing, Vale Canada Limited
Thanks, Mr. Lefebvre, for the question.
Yes, we are seeing a lot of movement in different regions. As an example, in the U.K. there is a battery hub being developed. There is strong support from the U.K. government in order to foster that industry.
2:35 p.m.
Liberal
Paul Lefebvre Liberal Sudbury, ON
Let me stop you there.
How many minerals and metals does the U.K. have on their lands to produce those batteries?
2:35 p.m.
Head, Sales and Marketing, Vale Canada Limited
It is very, very, very limited.
2:35 p.m.
Head, Sales and Marketing, Vale Canada Limited
That's the point we have been telling them. It's not about fostering a battery hub there. The issue is, where is the upstream part of that? Another example that is very strong, and that most of you have heard about, is Indonesia. The Indonesian government is really fostering big support, as they have very large resources of nickel, competing with our Canadian nickel, and a whole investment in the supply chain for the EVs.
Yes, we are seeing that. I think this will continue, as the supply chains will become more critical for the auto industry.
2:35 p.m.
Liberal
Paul Lefebvre Liberal Sudbury, ON
I could go on and on, but again, I really want to thank the witnesses on this.
Thank you.
2:35 p.m.
Liberal
The Chair Liberal James Maloney
Mr. Simard, we'll go over to you for two and a half minutes, please.
2:35 p.m.
Bloc
Mario Simard Bloc Jonquière, QC
Thank you very much, Mr. Chair.
Mr. Fung, I know we've had a lot of questions for you today, so I'm sorry, but I have some more.
As you may know, under U.S. law, aluminum is a national security consideration there. The U.S. typically sources its aluminum from Canada and especially from Quebec.
Earlier, when you were talking about rare earth oxides and permanent magnets, I raised an issue that had come up during our first meeting and relates creating reserves of rare earth and critical minerals in Canada.
Shouldn't the government make sure that a significant portion of these types of natural resources stay in Canada and are processed here? Do you think we should we have laws about that?
2:35 p.m.
Chairman, Torngat Metals Ltd.
That's a tough question.
You have to balance essentially three things. You have to balance whether you hold the resource in the ground. The second thing you have to balance is what the marketplace is going to do. Will there be other sources of supply? The third thing you have to balance is the financial marketplace, because if you start putting too much regulatory in the way of the overall marketplace, the financial marketplace looks at that as a negative. It's a very delicate balance, but I think we've shown that we're pretty good at dealing with this balance.
2:35 p.m.
Bloc
Mario Simard Bloc Jonquière, QC
Thank you.
We know the U.S. is going to re-enter the Paris agreement.
Earlier, you told me about permanent magnets and how we can develop that sector.
It seems to me that, for transportation electrification, the U.S. would be more interested in sourcing its materials from Canada than from China. China is a big player, so shouldn't we see this as an opportunity for Canada to develop this market? That means making sure we have the resource. That's what I mean by that.
Do you think there's something to what I'm saying?
2:40 p.m.
Chairman, Torngat Metals Ltd.
We have the resource available, and essentially the big market is sitting to the south of us. It's very easy to access that market. In terms of our overall strategic development with that market, this is something that we have to balance. How do we develop it, how fast do we develop it and how much of the downstream do we retain here in Canada?
What I would like to encourage is that we have a very highly skilled workforce and we should develop a lot of that downstream here in Canada.
2:40 p.m.
Liberal
2:40 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you.
I'll follow up on my question to Mr. Bahar in my last round and pose the same one, more or less, to Mr. Merlini.
Vale is a big company with operations around the world. In your testimony, you talked about the need for more certainty.
I'm wondering about the Declaration on the Rights of Indigenous Peoples, which the federal government is moving forward on and which British Columbia has passed legislation on. This is partly in response to some pretty disastrous examples of resource extraction and their impacts on indigenous people—the Giant Mine in Yellowknife, for instance.
Some of the mining developments that have suffered real delays have suffered because they forged ahead without informed consent of indigenous people. Do you think that the United Nations Declaration on the Rights of Indigenous Peoples would help bring that certainty to mine development and investors and help us move forward more quickly?
2:40 p.m.
Head, Sales and Marketing, Vale Canada Limited
Yes, I do believe the mining industry is going through a big transformation, and it seems that all the ESG compliance is something that will become mandatory. Having the “S”, social, embedded in the companies is something we, Vale Canada, are taking as a very strong commitment, and I think that this will be differentiating companies in the mining sector.
We are moving in the direction, particularly in our operation in Voisey's Bay, with a partnership with the indigenous communities, of increasing significantly the number of employees from indigenous communities. We have been partnering in order to develop the communities. Just as an example, at Voisey's Bay, we have 43% aboriginal employment in our operations.
This is something that will be more than just a statement, something that we need to be putting into practice in the whole industry, and Vale is taking it very seriously.
I'd just like to comment very quickly on one point.
2:40 p.m.
Head, Sales and Marketing, Vale Canada Limited
Ms. Falk mentioned the number of women in the mining sector. I'd just like to share that Vale is on the other side and that in 2020, we achieved a 20% increase in women in our workforce. We provided technical training for more than 500 newly hired women to work in operational roles. Vale is also very committed to the D and I agenda, and we saw in 2020 the opposite trend from what we have seen in the industry.
2:40 p.m.
Liberal
The Chair Liberal James Maloney
Thank you, Mr. Cannings.
Members, it's 2:44 p.m. by my clock here. We're supposed to stop at 2:45 p.m.
We do have some committee business. We've allocated 15 minutes. It will probably take less than that. We have Mr. McLean and then Mr. Sidhu last, and I'm prepared to go ahead with them. I'll even cut Mr. Sidhu short, if people want to do that. Then we could finish this round and go into committee business, but it means we might be here until 3:10 p.m., if that's okay.
I'm not hearing any objections.
2:45 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
Thank you, Mr. Chair.
You can't see my video. Something has happened with the computer and it doesn't recognize my camera suddenly and—