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.
2:45 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
It is me.
I have a lot of questions here.
First of all, let me go to Mr. Austin from Cameco.
Mr. Austin, can you tell us how much of your current supply goes toward Asian markets? Break that down, please.
2:45 p.m.
Head, Government Relations, Cameco Corporation
Certainly. Our major Asian markets would be South Korea, Japan and China, and I would say probably in the neighbourhood of 25% of our sales go into those markets.
2:45 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
Broken down by South Korea, Japan and China, how much is it for each?
2:45 p.m.
Head, Government Relations, Cameco Corporation
For South Korea, Japan and China, Japan is about 14%; China is 10% and South Korea, depending, is somewhere in the neighbourhood of 5% to 10%.
2:45 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
As for your forward growth perspective, as for what you see on the horizon here for when you restart McClean Lake and McArthur River, where do you see that supply going?
2:45 p.m.
Head, Government Relations, Cameco Corporation
Our largest customer continues to be the United States at about 30%. They have the highest number of reactors operating in the world right now. The largest growth opportunities, frankly, are in China and India. Both have announced significant nuclear power growth programs, and that's where the markets are leaning.
2:45 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
Most of your competitors who are building mines in Saskatchewan in your resource belt there, how many of those...? Were you seeing competition from Chinese-owned or Chinese-financed entities?
2:45 p.m.
Head, Government Relations, Cameco Corporation
That's a very good question. I know they're actively pursuing opportunities there. The foreign investment considerations come into play, so it's hard to say at this point
2:45 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
They're actively looking. When those companies are established in Saskatchewan, does the supply go directly to the owner then, or does it go on to a market for clearing?
2:45 p.m.
Head, Government Relations, Cameco Corporation
It would depend on the offtake arrangements that were in place between the entities, so it's hard to say. We wouldn't have a look-in on that.
2:45 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
Okay, thank you.
Mr. Fung, I have a question for you.
I really appreciate that you understand and were able to illustrate to us that battery storage is only energy storage, whereas what you're talking about is electromagnetic power, so a much different concept than a battery-powered car. That's an important distinction.
If you actually move toward an electromagnetic engine producing power, how much would you be able to provide from a mine such as yours, or anything else, outside of the major dominant party right now, which is China?
2:45 p.m.
Chairman, Torngat Metals Ltd.
I can't tell you with respect to China, but I can tell you when we really take a look at all the resources outside of China, that the resources available in our particular mine, or our particular mining area in northern Quebec, is greater than all of the rest of the projects combined.
2:45 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
Okay.
Ms. Concepcion, I think I have time for a question for you.
Can you talk about battery electric vehicle supply? As Mr. Brosseau indicated earlier, with costs going forward that are going to increase because of the finite supply, can you actually talk about what the costs look like on a forward-curve basis for these key elements?
2:45 p.m.
Executive Manager, Global Product Marketing Manager, Vale Canada Limited
Thanks for the question.
It's not necessarily about the cost of the individual materials that go into the battery specifically. I'll focus my discussion on costs there. I'm not sure if that's what you meant.
What's happening in the market is that the costs of those materials fluctuate based on supply and demand, certainly, but the cost overall of the battery has been going down and has dropped significantly.
2:45 p.m.
Conservative
Greg McLean Conservative Calgary Centre, AB
I'm talking about the costs for the supply of the metal that's going to go into the battery as it becomes more and more finite.
2:45 p.m.
Executive Manager, Global Product Marketing Manager, Vale Canada Limited
The cost of the raw materials, then, will obviously vary depending on the raw material. In the case of nickel, there is a wide variety of costs depending on the product, the quality of the product, the jurisdiction of the product and the type of environment in which it was mined. It can vary widely.
Naturally, as we progress forward, we would anticipate those costs to fluctuate somewhat as well, as new supply comes on board. A lot of it has to do with if the product has to be processed, if it has to be processed further. Some products need more processing than others.
Those costs can be all over the board. I think if we look at forward projections and we anticipate the market being in a significant deficit, of course we would expect the price of the product to increase. What we as an industry really would like to do is to assure the market that the product will be there, and control the price to the point that we don't scare the OEMs away into investing in new technologies and moving away from nickel.
We want to ensure that the supply is there.
2:50 p.m.
Liberal
The Chair Liberal James Maloney
Thank you, Mr. McLean.
We'll go over to Mr. Sidhu to conclude the questioning.
If you want to have less than your full five minutes, I'm sure everybody would be grateful.
2:50 p.m.
Liberal
Maninder Sidhu Liberal Brampton East, ON
No problem. Thank you, Mr. Chair.
Mr. Bahar, you didn't get a chance to say much about your field here, but what types of private sector investments need to be made in the mining industry to fully realize critical minerals development potential?
I'll also give you some extra time to add any points that you didn't get to mention today.
2:50 p.m.
Managing Director and Co-Head, Global Metals and Mining, BMO Capital Markets
Thanks for the open-ended question. I appreciate it.
I think we're fortunate. We're at a moment in time where everybody realizes that electric vehicles are here. There's no question that they're here. If it's a question of when, there are a variety of forecasts around of when exactly various parts of the world will adopt electric vehicles, but it's coming. We all know it is. The markets are attuned to it. Investors know that this is coming. They know that commodity prices should perform well on the back of it, and they're actively looking for opportunities.
I think the capital you need, whether it be institutional investor capital or whether it be private equity, is, generally speaking, available to the sector. Ultimately, it's a question of investing in the assets that are most attractive and investing in the assets that have the management teams that can actually deliver on building those mines.
I think the components are all there, is my answer to you. I think the capital exists. It is about incenting investment. As I mentioned consistently in my comments, it's about as best as possible providing the most reliable, transparent regulatory system for investors to feel like they can put their money where the projects are.
I hope that answers the question, but as I said, I think the market knows this is here, and investors are keen to put their capital to work.
2:50 p.m.
Liberal
Maninder Sidhu Liberal Brampton East, ON
Thank you, Mr. Bahar.
Mr. Chair, I'll take this opportunity to thank all our witnesses for taking the time to be with us today. Quite a lot of insights were provided today. I learned a lot.
2:50 p.m.
Liberal
The Chair Liberal James Maloney
Thank you.
Yes, let me add to that. This was a great panel. You can see we never have enough time. We could go on for much longer, but we're restrained by the time limits we have. We want to thank all of you for taking the time today to share your knowledge with us on a very important topic. You're free to go.
If everybody else would stick around for a few minutes, I'd be grateful. Thank you.
2:50 p.m.
Vice-President, Investment, Strategic Capital, Energy and Environment, Fonds de solidarité des travailleurs du Québec
Thank you very much.
2:50 p.m.
Liberal
The Chair Liberal James Maloney
There are two things.
One is that last week everybody should have received by email a copy of the budget proposal for this study. It's $4,350. Essentially it covers the cost of the headsets and all the technology associated with getting witnesses here by Zoom. There's no magic to it. There's no food on it, so we don't have to discuss important things like that, but we need to approve the budget.
Unless anybody has any questions, could I see a show of thumbs, maybe?