Natural Resources Committee on Oct. 6th, 2025

[The Chair, Liberal, Terry Duguid]

We are back in session.

Pursuant to Standing Order 108(2) and the motion adopted Thursday, September 18, the committee resumes its study of the development of critical minerals in Canada.

I would like to welcome our witnesses and thank them for their patience while we did committee business.

I'd like to make a few comments for the benefit of our witnesses. Please wait until I recognize you by name before speaking. For those participating by video conference, click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. For those on Zoom, at the bottom of your screen you can select the appropriate channel for interpretation: floor, English or French. For those in the room, you can use the earpiece and select the desired channel. All comments should be addressed through the chair.

Again, I'd like to welcome our witnesses.

We have Eric Desaulniers, founder, president and chief executive officer of Nouveau Monde Graphite. We have Professor A.E. Williams-Jones from the department of earth and planetary sciences, McGill University. We have Olga Vasyukova, research associate, also from the department of earth and planetary sciences, McGill University. We have Carl Laberge, president and chief executive officer, Saguenay Port Authority. On Zoom, we have Louis Ouellet, president, Union des Préfets-Saguenay-Lac-Saint-Jean.

You will each have five minutes for your opening remarks.

Monsieur Desaulniers, you have the floor.

[Eric Desaulniers, Founder, President and Chief Executive Officer, Nouveau Monde Graphite]

Thank you very much, everyone, for hosting me today and allowing me to discuss this very important topic.

I am Eric Desaulniers, president and founder of Nouveau Monde Graphite. Nouveau Monde is a company that started 14 years ago right across the river in Gatineau. The goal was to discover the next big graphite deposit, and we did that in 2015. We now have maybe about 110 employees, about 30 engineers, many Ph.D.s and a lot of well-paid jobs. We're planning, once the project financing has been completed and we have the final investment decision on both our projects, to have over 500 direct employees in the company.

We have as shareholders six important insiders. Investissement Québec has 17%. Canada Growth Fund has 13%, their first investment in a mining project. We have also The Pallinghurst Group. We have Mitsui from Japan, and we also have Panasonic and General Motors as important shareholders in the company.

For a president of a new company, it was quite an accomplishment to have assembled such strategic shareholders.

Currently, we are working on three major projects. The first is the Matawinie mine, which is two hours north of Montreal, in the village of Saint‑Michel‑des‑Saints. We have all the project permits, and we've signed agreements with the community and the first nations.

In the coming months, once the project financing is in place, we will be able to complete construction of the Matawinie mine, which will be able to produce 106,000 tonnes of highly pure graphite concentrate. The bulk of the concentrate will be taken to the site of our second major project, located in Bécancour. There, it will be used to produce anode material, mainly for our clients Panasonic Energy and General Motors.

Our third major project involves the acquisition of a graphite deposit on the North Shore, near the Manicouagan reservoir. The acquisition is part of an expansion plan for the future, and the project is known as the Uatnan project. We will be able to build something five times larger than the Matawinie mine. It is currently the largest graphite project in development in the world.

Quickly, here is a bit of history on NMG.

For 14 years, NMG has been taking all the different steps, so if you have questions about any of the steps from early exploration to a discovery in 2015 or about how to help relationships with communities and first nations and how to help with permitting, we've been through all of this. If you want to know how to deliver a viable feasibility study on critical mineral projects, we did that in 2018 for the first time.

Also, on building the full process, it's one that is 100% currently done in China. If you want to know how to develop this process locally, we've done that over four years qualifying with Panasonic Energy to get the product on specs. Now we are in the project financing mode. The next step could be very helpful for the government, as well as this step of helping the top line and securing the supply chain.

This is really where we are at: being relevant in the value-added products we do for the EV transition but also now for other markets, because graphite is also useful in defence applications and other strategic applications for our economy.

We're quite happy to answer questions from the committee.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Desaulniers.

Your cellphone has been buzzing while you've been speaking. If you don't mind, put it away from the microphone. It is hard on the interpreters' ears and sometimes our ears.

Thank you for that.

Now we will go on to Professor Williams-Jones.

You have five minutes.

[A.E. Williams-Jones, Logan Professor of Geology and Geochemistry, Department of Earth and Planetary Sciences, McGill University]

Thank you.

I'm actually here to represent IEP, which is a small company operating out of Timmins, Ontario. They have an interesting prospect called Lackner Lake. It was explored back in the 1950s. A resource of something like 150 million tonnes of niobium, Nb2O5, at a grade of about 0.2 weight per cent, was identified, and then basically abandoned. The prospect also has tremendous potential for the rare earth elements.

When I say I'm representing them...I'm obviously a professor at McGill University. I don't have a consulting relationship with the company. In fact, our relationship is entirely a research relationship funded by NSERC—in other words, funded by the federal government—in a company-industry partnership. They wanted me to represent them here to basically answer questions about the geology of the deposit.

I focus on the processes that concentrate metals, and particularly critical metals, to economically extractable levels. That's where we're coming from.

Our research group pioneered the field of rare earth element ore deposit or ore genesis. For example, our work led to the discovery of Strange Lake, which I'm sure you're all aware of because of Torngat Metals. We were also involved in the discovery of Nechalacho, another rare earth element deposit in the Northwest Territories, and most recently the scandium deposit at Crater Lake. We have also worked on Ashram. We've worked on some of the major deposits.

That's the background. Why are we interested in Lackner Lake? The reason is quite simple. The deposits I've been talking about have a huge infrastructure problem: They're all in the Far North. Your challenge, really, is to basically provide the infrastructure you need to extract the metals. I think this is a huge challenge. What I notice is there has been comparatively little exploration of systems that could be really exciting close to major centres. In the case of Lackner Lake, the deposit we're interested in is something like 100 kilometres from Timmins, so it's sitting in a major mining district. There are no infrastructure issues there at all.

I'll just close with the observation that if we're looking for rare elements or if we're looking for niobium, what we want to look for is carbonatite complexes, and what you have there is a carbonatite complex. If you looked at the whole story globally, what you would actually find is that carbonatite complexes are responsible for over 90% of the world's niobium and over 60% of the world's rare earth elements. If you want to find a deposit, go and look at carbonatites, but they're under-explored, particularly in the south of the country. For some damn reason, we geologists love to go north. It's fun.

[The Chair, Liberal, Terry Duguid]

Thank you, Professor.

Now we'll go on to Monsieur Laberge.

You have the floor for five minutes.

[Carl Laberge, President and Chief Executive Officer, Saguenay Port Authority]

Good afternoon.

Thank you for inviting me to appear before the committee today.

My name is Carl Laberge, and I am the president and chief executive officer of the Port of Saguenay, a port authority established by the Government of Canada. Like the country's other major public ports, we independently manage Government of Canada-owned assets.

An interesting fact about the Port of Saguenay is that it was originally located in downtown Chicoutimi. In the mid-1980s, it was relocated to a greenfield. The port is surrounded by a lot of land, so we will be able to develop it for industrial operations in the future.

Another of the port's interesting features is that it's located in the Saguenay fjord, which is very deep—so deep, in fact, that its port capacity is among the largest in the country. That means the Port of Saguenay can accommodate very large ships.

A third feature that sets the Port of Saguenay apart is its location on the Saguenay River, a gateway to northern Quebec that is connected to the St. Lawrence River. We are well situated geographically to support mining development sectors. We are currently working with a number of companies involved in mining projects.

Over the past few years, we've built a significant amount of infrastructure. A rail connection to the port was completed fairly recently, in 2015. We are in the midst of building a conveyor system for dry bulk cargo, mainly for large quantities of mining and metallurgical products.

In addition, we are working very actively with the Government of Quebec towards developing the industrial land around the port. We currently have 1,200 hectares of industrial land. We are working on building one of the largest port industrial complexes in Canada, in co-operation with our investors and partners: the Government of Quebec and the City of Saguenay.

Currently, the port is connected to a rail network that runs to the northern part of the Saguenay—Lac‑Saint‑Jean region. The network connects the Chibougamau-Chapais region and others. The region is home to a number of mining projects in development—especially in the critical and strategic minerals sector—and could also be connected by rail to Abitibi. There used to be such a rail line between Grevet and Chapais.

Restoring the rail line would make connecting Abitibi, the Chibougamau area and the Port of Saguenay a real possibility in the future. The port has the capacity to accommodate critical minerals processing thanks to the availability of industrial land. Logistically speaking, the port is very well equipped, rail-wise and marine-wise, for the transshipment of mining cargo.

These projects have been in development for a while now, and we are ready to begin work very soon, as early as next year, because there is an important opportunity here.

I would be pleased to answer members' questions.

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you, Monsieur Laberge.

Colleagues, we have Mr. Louis Ouellet on the screen, but unfortunately he doesn't have the approved headset. We will invite him back.

Colleagues, because we now have one panel of four witnesses for an hour and a half, would the committee agree to have two rounds of six minutes for each party and then the subsequent rounds as usual?

I see agreement. We'll see how far we get.

Mrs. Stubbs, would you like to lead off?

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Chair.

Thank you to all the witnesses for being here, and thank you to our virtual witness for attempting to join us. I wish there weren't time limits so that we could ask questions of all of you and have very substantive conversations about all these important issues.

I'll start with some questions to Professor Williams-Jones. I know that colleagues will ask questions of other witnesses later on in the meeting. I look forward to all of your information that's so critical to natural resources development, which underpins the entire Canadian economy, something that we on this side have consistently argued.

Professor, you talked a little about the geological challenges faced by Canada. I wonder if you want to expand on the geological challenges that Canada faces in terms of establishing secure supplies of critical minerals.

In doing that, do you have any added comment on what the federal government can do to advance that development and what barriers exist to exploration and development?

[A.E. Williams-Jones]

I'll start off with an example.

I made a point about carbonatites, which are basically complexes made up of calcium carbonate and magnesium carbonate. I won't go into the details of the geology, but it's a particular type of geological setting. We probably have about 90 of them in the country. Most of them are remote, while some of them are actually fairly close to infrastructure, and they're grossly under-explored.

If I think of the carbonatite complex that is best explored at the moment, it's probably the Ashram deposit in northern Quebec. Resources have been defined and the company has gotten in there, but the challenge now is to provide the infrastructure needed to get it out of there.

The next challenge is how to tell the difference between a good carbonatite and a bad carbonatite. We have 90 of them. It turns out that our research has shown that there are key signatures that will allow us to distinguish carbonatites that have the potential for a mineral resource.

I don't want to bore you with a lot of science, but let's take this idea very simply. If I take a carbonate liquid and I look at the concentration of niobium and rare earths in it, it turns out that this liquid dissolves huge concentrations of these elements, so our challenge is actually to get them out.

How do we get them out? The model that we've been developing shows that if these carbonatites interact with their host rocks, the carbonate part is consumed, and you end up with a residue that concentrates these rare metals, so we can actually go in now and start to see the signatures that will distinguish between fertile ones and barren ones.

The whole challenge for the exploration community is that we haven't been exploring for these elements for a long time. In the case of copper or nickel, we've been doing it for years, so we have good exploration models; we don't have them for rare earths and niobium.

I'm suggesting that our group is developing them. I'm excited about Lackner Lake simply because we see the right signatures there, and it is close to infrastructure.

[Shannon Stubbs, Conservative, Lakeland, AB]

Would you say it's fair to suggest that the government is speaking effectively a lot about the concept and the ambition of developing Canadian critical minerals and rare earth metals, but so far has not done enough to advance and facilitate that exploration and development?

[A.E. Williams-Jones]

I'm going to go out on a limb here.

I was quite surprised when I learned the federal government.... I woke up in bed one morning, and there was Mark Carney in Germany announcing that Torngat Metals was going to ship rare earth elements to Germany. I started my career on Strange Lake; I know where it is, and the logistics are huge, so I'm wondering where all the money is coming from to actually build this project, but that's me being surprised—

[Shannon Stubbs, Conservative, Lakeland, AB]

No, I think that's you being an expert and being very clear about the realities of competitiveness between Canada and the other major mining jurisdictions around the world that don't have the same kinds of challenges that Canada does in terms of distance, climate, lack of ability to develop 24-7 access, land access issues, the uncertainty of policy and red tape that blocks exploration and, in the long run, development.

[A.E. Williams-Jones]

That's it exactly, so what we need to do is consciously support companies that are exploring interesting properties in the southern part of the country. Let's really focus on deposits where we already have infrastructure. There will be good ones and bad ones, but at least put your focus there instead of putting your focus in the Far North. That's my simple-minded view.

[Shannon Stubbs, Conservative, Lakeland, AB]

It was this same government, of course, almost five years ago now, that launched their much-vaunted critical minerals strategy, and then announced it again a couple of years later, and missed some elements that clearly should be on the list. Would it be your view then that this strategy hasn't really done very much to expand the development, exploration or export of Canadian critical minerals and rare earth minerals?

[A.E. Williams-Jones]

I think that would be my view. I think that what the government could do now is really invest in exploration in the southern part of the country.

[Shannon Stubbs, Conservative, Lakeland, AB]

Are there any other regulatory or fiscal measures that you think would help attract and expand critical mineral development in Canada, especially compared to other competitive jurisdictions?

[The Chair, Liberal, Terry Duguid]

Please give a quick response, Professor.

[A.E. Williams-Jones]

You're probably putting me out on a limb there. That's way outside my expertise. I know how these things concentrate. I think I know the sorts of systems that we should be looking at, but what other attraction...? Well, I'd like to see more money going into research on these things.

For example, as I said, our group has just recently developed this model for niobium, and prior to that, we developed models for the rare earth elements, but the number of research groups around the world doing cutting-edge research is extremely limited. I'm probably tooting my own horn here, but I would argue that our group is leading it in Canada and probably around the world.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you.

I hope you'll also provide a written submission.

[The Chair, Liberal, Terry Duguid]

We'll go on to Mr. Guay.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you, Mr. Chair.

Mr. Desaulniers, I'd like you to comment on two completely different topics.

First, you offered to share the lessons you learned in working with first nations. What could the government do to help businesses like yours work with first nations in the future? For example, would it be helpful to create model agreements? Do you have any feedback in relation to participation and royalties?

Second, could you talk about the logistics of shipping the product between your city and the site of your second project, which is where the processing will take place? How will the product be shipped?

[Eric Desaulniers]

Thank you for your questions, Mr. Guay.

First, relationships with first nations take decades to build, as everyone knows. For our part, it's been just over a decade since we began our discussions with the Manawan community, and in December 2024, we finally reached an agreement with the Atikamekw nation. We worked on building relationships. We have employees who are community members, and we sponsor most of the events there, but what really made the difference was when we were able to put two important measures in place. One was providing the community with significant economic benefits, which was very important, and two was finding ways for the community to participate, not just through employment, but also through contracts. That was really important to the Manawan community. It didn't want to just watch the project happen, without developing any expertise. We really put a lot of hours, years, into figuring out which contractors in the community could participate meaningfully in the project and creating connections with companies outside the community.

Second, any federal program supporting the equitable participation of first nations in projects is a good idea. I know that a program was just introduced. It's a great initiative to help first nations build real expertise so they have competitive advantages when bidding on major projects, since they may not have all that expertise to start. Those two measures really helped us take our relationship with the community to the next level.

Many other things helped us reach that level: being present, having conversations, being respectful of their culture in our work on the project. Fundamentally, though, it's important to have something you can offer the community so that it can enjoy tangible benefits from the project, not just watch from the sidelines. That's really what made the difference in December. We were able to seek out those incentives. We are going to carry on that work under the program that was just introduced, so that the other indigenous communities we work with can participate equitably, whether it's the Innu on the North Shore or the Abenakis of the Wôlinak community, just outside Bécancour. That kind of programming is very helpful to us.

To answer your second question, which was about logistics, I will say that we are lucky to have a project in Saint‑Michel‑des‑Saints. We are a two-hour drive from the project site, so logistics-wise, we're spoiled. We are fortunate to have an incredible geological deposit very close to the major centres, which is in line with what Professor Williams‑Jones recommended. Social licence within the community was central to the project's development, and we have the support of more than 80% of the local population. People can see the benefits of the project because it is so close. There will be a fully paved road between the two sites, with about a dozen trucks travelling between the sites. In comparison with the lumber industry, that isn't considered a major use of the road. Logistically speaking, moving between the two sites is fairly simple in our case, as compared with other mining projects, where it's basically take it or leave it. In our case, the infrastructure is already there.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Where will that production go? Do you have agreements?

[Eric Desaulniers]

Originally, we projected that the majority of the approximately 100,000 tons of concentrate produced in Saint-Michel-des-Saints would go to the electric vehicle or the lithium-ion battery sectors. We have two contracts, one with Panasonic Energy and one for General Motors' supply chain. Historically, there has been an important market for graphite outside of the lithium-ion battery sector. Roughly 150 clients have been getting their supply from Canada for about 30 years. Canada has been the only producer in the G7 for more than a century. Our project is the only significant one in the G7.

It is important for us to diversify our supply agreements and to not only supply the lithium-ion battery market, regarding which we have a lot of competitive advantages thanks to our two pre-existing agreements, but to also supply every other strategic sector. We have been in talks for a long time with a company called Traxys to use our product as an input for the production of firebricks, which is still the number one market for natural graphite.

We are currently building direct relationships with several clients for strategic applications such as sheets for electronics, heat dispersion, lubricants or small carbon brushes used in electric engines. All of these applications are very important to our economy, but they do not represent huge volumes that can finance a mine's operations. We make sure to work with all of these clients.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Desaulniers. The time is up.

I'm sure we'll come back to you later, Mr. Guay.

Mr. Simard, you have the floor.