Natural Resources Committee on April 12th, 2021

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Okay, I'll just thank the witness for our great back and forth. Thank you.

[The Chair, Liberal, James Maloney]

Thanks, Mr. Lloyd.

We will go on now to Mr. Lefebvre.

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

Before I ask my questions to the great panel we have today, I would maybe rephrase it.... As a member of the sitting government, we believe that climate change is real, and we see that clean energy—and certainly this study we are embarking on about critical minerals—is a huge opportunity for Canada. There is an economic opportunity. There are jobs. This is the way of the future, and we want to be leaders in this sector.

That being said, I really want to thank the panellists. It's been very informative.

I'll start with Ms. Houde. We haven't talked much with you, unfortunately, nor with your colleague Mr. Thibault. We know you have a lot to say. We want to hear from you about the solutions we can provide.

[Technical difficulty] the world leader that we should be in this sector. I'm talking about Sudbury today. Behind me, there are nine mines operating right now, with more coming on stream. There's more research, but at the same time, we realize the importance of nickel, copper and all the rare minerals that are found.

You talked about a Canada-wide alliance and a North American coalition. You talked about circularity and traceability. These are all extremely important things in terms of the national strategy that we are designing.

I would like you to give us some more examples of how important they are and then compare them to other countries or other regions, like Europe. I find all of this very interesting.

You have one minute; I'm listening.

[Sarah Houde]

In Canada, several provinces are part of the answer. When the provinces are put together, we can win. That's why the federal government must coordinate each province's share to ensure that we have a complete set.

The nickel that comes from your mines in Sudbury and that you're talking about is an excellent example. You're producing nickel in Ontario, which could complement the Quebec mine supply and allow for cell production and all the components required for this production.

These same cells could then be assembled into battery packs and integrated into vehicles in Ontario. We could continue the research and development with all the expertise in Nova Scotia, for example.

In addition to automotive manufacturers, there are non-passenger vehicle and electric vehicle manufacturers in Quebec. There are also some in Manitoba. From this perspective, the role of the Canadian government is to coordinate the provincial shares in order to establish continental autonomy in North America. We could then ultimately emulate Europe's approach to battery production.

Europe is developing continental autonomy, and Asia has already established it. We mustn't be dependent on other parts of the world or dependent on various conditions, such as a pandemic or difficulties in trade relations. It's important to have full control over this strategic resource that will help millions of Canadians move into the future.

[Paul Lefebvre, Liberal, Sudbury, ON]

I completely agree.

A few weeks ago, we met with a witness from Europe. I asked him about the number of critical and rare minerals in Europe, which made him laugh.

I find it interesting that Europeans want to develop the chain there, but they'll come and get the minerals here. They'll take the minerals from somewhere else and bring them back there. We won't have any left.

My next question is for Mr. Cleary from BlackRock Metals.

You said that more federal and government support was needed for investment in the mining sector. We're talking about mineral extraction in particular.

In your business plan, in terms of the smelters and the whole process around that, where will this happen?

Are you planning to refine your rare minerals?

[Sean Cleary]

In the case of the BlackRock project, the vanadium and titanium and the iron fraction will be refined in Saguenay. An important element of our project is that it's an integrated project and we will be able to send these to market.

We are fully permitted for an additional ferrovanadium plant to be located in Saguenay, which would supply both the steel industry and the battery industry. That is phase two of our overall construction plan. We would look to have that put in place a couple of years after the start of production. Initially, we will process some of these materials at existing facilities that are partnered with us out of Europe.

[The Chair, Liberal, James Maloney]

Thanks, Mr. Cleary and Mr. Lefebvre.

Mr. Simard, you have two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

My question is for the representatives of Propulsion Québec.

Mr. Thibault, you ended your brief remarks earlier by talking about value-added components.

A few weeks ago, we met with a representative from Torngat Metals, which processes rare earth oxides to make permanent magnets. This process is similar to the production of aluminum by electrolysis, which requires a great deal of electricity. I thought that this factor was quite interesting.

Can you give us other examples of value-added products that we can manufacture in Quebec?

[Simon Thibault]

Yes. Torngat Metals is a good example. The company, which is also a member of Propulsion Québec, works in the rare earth industry.

There are several examples in the Quebec ecosystem alone. However, we can also look at the examples in the Ontario ecosystem, as Mr. Lefebvre suggested. There are lithium mines, such as Nemaska Lithium, Sayona Mining, Critical Elements Lithium Corporation, Galaxy Lithium and North American Lithium. As for graphite, there are Nouveau Monde Graphite and Mason Graphite. Lastly, there's nickel on the Ontario side, but some Quebec mines that supply Ontario nickel plants could re-supply plants on the Quebec side. There are several examples, such as Torngat Metals, whose process could easily be developed in Quebec or even across Canada.

Based on our studies and various meetings with our members, which are the mining companies, no projects in Quebec or Canada are unable to carry out secondary, tertiary or quaternary processing in Canada. Right now, no technological barriers prevent us from doing something of this nature in Canada. In my opinion, it's really a matter of incentives. We need to support companies in order to develop these types of processing here, in Canada.

[Mario Simard, Bloc, Jonquière, QC]

I believe that Ms. Houde pointed out earlier that the best way to put these incentives in place is for the federal government to play a coordinator role. Beyond that, in terms of funding, there's no Canadian strategy for the processing of these critical metals.

[Simon Thibault]

The Investissement Québec model is quite good in Quebec. I would like to share it with you here.

Clearly, it would be very good to see a similar entity created in Canada, or an increase in the budgets of the Canada Infrastructure Bank, in order to strategically and specifically support flagship projects throughout the battery and critical and strategic minerals, or CSM, industries. Of course, this all fits in with the ultimate goal of having electric vehicles on our roads, and wind turbines and solar panels made entirely with Canadian materials.

[The Chair, Liberal, James Maloney]

Thank you, Mr. Thibault and Mr. Simard.

Mr. Cannings.

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

Thank you.

Mr. Blondal, throughout this study, we have been hearing so much about the value-added chains that we need to create in Canada. You mentioned the battery value chain. I talked previously in this study about the graphite mine in my riding that really would like to produce graphite for battery anodes manufactured in Canada instead of in China.

Can you expand on your comments as to what the government can and should be doing to incentivize those value chains and integrate them? What really needs to be done in the short time we have to make this move?

[Dan Blondal]

Thank you very much for the question, Mr. Cannings.

We hear a lot about the mining end of it. We hear a lot about the electric vehicles, charging and everything, but there's a lot of stuff that happens in between. That's all the value-added. You mine the ore and then it has to be refined into a useful metal. Then it has to be converted into a useful battery chemical, and all that comes together combined into a cathode material. The anode's a little bit simpler because it's just graphite. It might get mixed with silicone, but the same kind of thing happens on either of the electrodes. That's all before it ever gets into a battery cell, battery module or battery pack, and then into an electric vehicle. There are many transformation steps throughout this whole process.

I'm here as a witness to talk about critical minerals and the transformation of those critical minerals. My agenda, of course, is the transformation of those critical minerals into something useful in a battery. What I want to underscore is that we need to fix that middle supply chain. We need to be making cathode materials and anode materials for assembly into a battery cell here in North America, and preferably in Canada, if we're going to avoid shipping our raw materials overseas and having them come back in the form of a battery. I think, ultimately, that's critical.

What can the government do? The government is already supporting a company like Nano One through SDTC and a variety of other mechanisms to commercialize their technology, to pilot it and prove it. I believe we can do it with a pan-Canadian effort. We can bring together the nickel miners and the lithium miners, and the graphite miners for that matter on the other side of things, to form a completely integrated supply chain.

The value to integrating the supply chain is not only just creating the—

[The Chair, Liberal, James Maloney]

Thank you, Mr. Blondal. I apologize again but I do have to cut you short there.

Thanks, Mr. Cannings.

Mr. Patzer, we'll go over to you.

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

Thank you very much, Mr. Chair.

I'm going to start with Mr. Cleary here. It's great to see that you have a mining project under way. I'm just curious to know how long of a process it takes to go from the beginning phase to the operation phase. How long is that process and what's that journey been like for you and your company?

[Sean Cleary]

We started as a greenfield project in 2008 and have worked all the way from, essentially, discovering the deposit to developing the geological dataset, to going through feasibility and environmental studies over the years. We garnered local support with the natives, municipalities and the province, and we worked and reworked various studies to make sure that the project would meet the ESG requirements that we set out as an organization.

We travelled the world to sell the project in terms of finding investors, because there aren't a lot of them in this space and it requires speciality expertise to understand some of the details of projects like this. It's not as simple as maybe a gold project or a copper project. There are many steps to it.

We reworked the business plan a number of times to make sure that the economic returns to those investors were sufficient, and we worked with government in terms of related infrastructure. We have power that goes by our project, about 25 kilometres away, but it has to be brought to site. There are other things that have to be done. We had to build a management team that was capable of managing the construction and then doing the ramp up in operations.

It's a long journey. We've invested over $150 million to date in this project, and we expect to see its fruition in the next couple of years.

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

You're looking, probably, at around 15 years as a timeline.

[Sean Cleary]

I would say 10 to 15 years.

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

If you were in the United States, Australia or some other jurisdiction around the world, would it be 10 to 15 years as well?

[Sean Cleary]

It could be, depending on the political incentive.

A lot of this is about social acceptance and political will. You have to have the rocks and minerals to be able to do that. In Canada, we're blessed with this.

What could reduce the timeline from conception of a project to its commercial production would be, from my perspective, if the government had a strategy to allow big projects to come to market. I think this is partly what Canada is missing. We have all the rocks and we have most of the minerals. We have a tremendous amount of expertise. We have some—but not all—of the capital, but we really don't have a plan.

It's not easy to see how these things can be done, without just the sheer will of the entrepreneurs who have backed me and my team at BlackRock Metals.

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

One other thing that you said earlier that I found interesting was that, when you're seeking capital for this project, you're going around the world looking for it because there's expertise in other regions of the world. Does that leave the Canadian industry susceptible to nefarious players like.... We know that the Chinese government, per se, is involved in a lot of operations and taking over companies. They do that for a strategic advantage for China, but it leaves the rest of us at a disadvantage.

Are there any potential problems with that scenario, where, because we don't have the production capacity and the timeline approvals here in Canada, we're susceptible to takeovers from other countries or companies that don't have the best intentions at heart?

[Sean Cleary]

Intentions aside—because it's always hard to see what those are—we have all the expertise here to be able to do it. We should be building our own projects. We should be developing and growing our own companies. We know that's what creates economic wealth in our country.

As a management team, we've been to every country in the world looking for capital for our project. It does open us up to the agendas of others, which aren't necessarily aligned with our national agenda. I would say it's a give and take. We want to bring in foreign direct investment. This project alone is bringing over $700 million of foreign direct investment into the country. We want to be sure that we're dealing with credible and responsible players who are bringing that capital.

That's just what responsible Canadian companies should be doing and, in fact, are doing. We have rules around that.

[The Chair, Liberal, James Maloney]

Thank, Mr. Cleary. I'm going to have to stop you there, unfortunately.

Thank you, Mr. Patzer.

Mr. May, I believe you're next.

[Bryan May, Liberal, Cambridge, ON]

Thank you very much, Mr. Chair.

I'll be directing my questions to Mr. Cleary from BlackRock.

Before I get into that, I want to remind my colleagues who just asked a few questions there that they were in government for most of that time, for the scenario that we're talking about. There were a series of acquisitions from foreign countries under their watch. I'm not sure they want to be throwing too many stones there.

I will suggest, Mr. Cleary, that one of the reasons we're doing this study right now is that we recognize that a plan is necessary. I agree with you that getting to the point of getting to a plan is something that we all agree would be beneficial, providing certainty and recognition for the industy.

My first question is going to be very specific. The members of this committee won't be surprised as my interests lie very much in the nuclear industry, having ATS, BWXT and others in my riding. I was very interested in your opening comments about vanadium, specifically. I recognize that it is a very critical element within the nuclear industry.

I'm wondering if you have any insight on potential threats, with expansion and with the refurbishment projects at say, Bruce Power, if we don't have a proper supply chain of this particular mineral.