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.
1:55 p.m.
NDP
Richard Cannings NDP South Okanagan—West Kootenay, BC
Thank you.
I want to jump from there to Mr. Fung.
You talked about the Australian commitment to develop these value chains and these critical mineral activities. Could you expand on what Australia is doing and what Canada should be doing along those lines?
1:55 p.m.
Chairman, Torngat Metals Ltd.
What I find interesting so far is that in Canada we've been talking about batteries. Everybody has forgotten that a car needs something to power it, which are the permanent magnets to build those electric motors.
What is happening in Australia is in reaction to what the United States has been trying to do. The U.S. is trying to get itself in a position to be a major supply chain for all of these products in the United States. The two countries that supply these particular rare earth elements are Australia and Canada. Australia jumped on the former American president's request to build a supply chain. Australia moved very quickly.
What Australia has done, in fact, is formed a specialty office in the Australian government to deal with these critical metals. Any small Australian company can go to this particular government office and it will assist them to get funding. That's the first piece of it. The second piece of it is essentially what I was suggesting we do in Canada. They have essentially said they will make their $1.3-billion modern manufacturing front available for this particular sector to access.
The Australians have been moving very quickly to get their supply chain in place, as a competitor to Canada. In fact, the Australian government says it intends to hardwire itself to what in essence is the new supply chain to develop these rare earth elements.
The Canadian government and this committee should remember that, even though we've been talking about batteries, a vehicle needs two things for it to operate. You need a motor and a battery. We've been focusing on batteries.
Interestingly enough, Canada has a very unique position in the permanent magnet sector. We have a material that the U.S. does not have, these particular rare earth elements which are needed for the permanent magnets in electric motors. That is one thing I would like to remind you of in Ottawa. We have something the United States does not have, and it is critical to the industrialized world. We have to develop it.
1:55 p.m.
NDP
1:55 p.m.
Liberal
The Chair Liberal James Maloney
We will get back to you.
We're in the five-minute round now and we're starting with Mr. Patzer.
1:55 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Thank you very much.
Thank you, everybody, for being here today.
Mr. Fung, I'm going to jump back to you and ask you some questions.
You're talking about the critical minerals we have here in Canada that the U.S. doesn't have. Am I correct in understanding that we are currently not actively producing those materials?
1:55 p.m.
Chairman, Torngat Metals Ltd.
There are only two production operations outside of China. One is in Australia. The ore in Australia is sent to Malaysia to process, and that ore goes back to Australia and then to China for use. The second operating mine outside of China is in the United States. The interesting part about that particular mine is that it does not have the rare earth elements that are needed for making the permanent magnets in electric motors. It has one or two of the numbers that are needed. We in Canada have them all. That is the unique opportunity for us here. We're in the process of trying to finance this operation and bring it into production.
2 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Let's say that you started the process today. How long would it take, starting today, to get to the point where you would have a mine or facility that is actually producing that material?
2 p.m.
Chairman, Torngat Metals Ltd.
Sir, if we started today, we could be in production providing rare earth oxides to markets in 2025.
2 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
We're looking at about four to five years from start to finish.
2 p.m.
Chairman, Torngat Metals Ltd.
That's absolutely correct, but it's not only the money. We're talking about the mine, process and facility, which is really where skilled labour comes into play.
The mining part of it is the easy piece. The piece where the benefit is added to Canada is in the processing and selling of the individual rare earth elements. In Bécancour, Quebec, is where the real value is added to get the supply chain.
I believe that if the industrialized world really recognized that Canada is serious in doing this, you would see those who need these particular rare earth elements setting up operations and supply chains to make permanent magnets very close to the supply source.
2 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Are there any issues or concerns about having companies that are under state control, interference from China, from the CCP, in trying to set up shop in Canada to secure those critical minerals at the peril and risk of Canada's interests?
2 p.m.
Chairman, Torngat Metals Ltd.
Today China controls something in excess of 75% to 80% of that market. Essentially, they have the mines and they have the processing. Not only do they have the processing, but they were smart enough. They have what, in essence, is the manufacturing to produce pretty close to the entire supply chain down to the permanent magnets.
We have the ability to do exactly that. We can do it here. We have all of the materials needed. We know how to mine. We know how to get it into the process facility. We know how to do it. In fact, Torngat is probably the most advanced of the developing companies to produce this material right across the spectrum of the world outside of China.
March 12th, 2021 / 2 p.m.
Conservative
Jeremy Patzer Conservative Cypress Hills—Grasslands, SK
Mr. Austin, it's great to have another person from Saskatchewan joining the committee. Thank you very much for being here.
Cameco is a great success story for Saskatchewan. Unfortunately, there have been a couple of closures over the last number of years. I'm just curious. To get those mines reopened, what's the outlook for that, and what would it take to get those mines functioning again down the road?
2 p.m.
Head, Government Relations, Cameco Corporation
The first instance, our Cigar Lake Mine, will come back on as soon as the pandemic conditions allow it. It was taken down last year and also this year in response to trying to keep the pandemic out of northern Saskatchewan. We didn't want to inadvertently become a site for community spread. As soon as the pandemic conditions relent, we'll be in a position to think about opening Cigar Lake. There are no immediate decisions on that, but that is the one that will come online first.
With respect to McArthur River, that was taken offline in 2018 as a result of low uranium prices. In order for that to come back online, frankly, we're going to have to see a rebound in those prices and have that uranium delivered into long-term contracts. We see light at the end of the tunnel. It's been a bit of a trough, a long trough, for uranium prices, but we see some improvement in the future.
2:05 p.m.
Liberal
Maninder Sidhu Liberal Brampton East, ON
Thank you, Mr. Chair.
Thank you to all our witnesses for being with us today.
My first question is for Mr. Bahar.
You mentioned that BMO has won awards and is recognized as one of the most sustainable corporations in the world. Can you walk this committee through BMO's sustainable investment portfolio, possibly pointing to similar investments in critical mineral projects around the world, and inform us of what the results of those investments are?
2:05 p.m.
Managing Director and Co-Head, Global Metals and Mining, BMO Capital Markets
Thank you for the question.
Just this Wednesday, BMO announced a net zero policy. As part of that, BMO also has a fund focused on sustainable finance. We also have a portion of BMO asset management overall in BMO GAM that has an ESG-focused investment arm. I admittedly don't have in front of me the particular investments that each of those have made, but there's certainly a focus in various parts of BMO to make investments focused on sustainability.
The fund itself is a fund that the capital market is close to. It is in the early days of being developed and is developing its strategy going forward.
2:05 p.m.
Liberal
Maninder Sidhu Liberal Brampton East, ON
Thank you for that.
Mr. Fung, you mentioned the importance of processing the material here in Canada. I really appreciate your insights into what Australia, the U.S. and other countries are doing. What is the hesitancy by the industry in adding processing capacity here in Canada? I know it's nothing new, but can you provide some insights into that?
2:05 p.m.
Chairman, Torngat Metals Ltd.
I assume that you are focusing strictly on what I'm talking about with respect to the rare earths. Essentially, the big issue of course is that when you have a country as dominant as China controlling that industry—they've done it before—they see a competitor getting involved, so they collapse the prices.
It's one of the interesting things about—let me call it—the particular rare earth situation. What I understand from the different studies that have been done by NRCan is that once we are able to produce the rare earth oxides and the individual rare earth elements that we're talking about in Bécancour, the process of going from that to, in essence, the particular alloys to make permanent magnets is very similar to the aluminum sector. It requires a lot of energy, and that energy is abundant from Quebec hydro. It's a process that is very similar.
What we have to do in Canada is to really say to the world that we intend to do this. If the Government of Canada would say that we intend to put a facility that is going to manufacture or produce these particular rare earth oxides by a set date, industry will recognize that. Industry today recognizes that they're stuck with a 75% to 80% production out of China. Industry is looking for another source. We have the ability to do it. We have a very unique ability here in Canada to do something. This is a once-in-a-lifetime shot at being in a position to have a degree of control in a very large market.
2:05 p.m.
Liberal
Maninder Sidhu Liberal Brampton East, ON
Thank you for that, Mr. Fung.
Mr. Chair, can I share my remaining time with Mr. McDonald, please?