Good morning. I will address you in French, if I may.
I would like to begin by thanking members of Parliament for the work they do, regardless of political affiliation. I have a great deal of respect for their work.
I am an exploration geologist and have been working in mineral exploration for 43 years as an independent consultant. I will have to condense my presentation somewhat, so I apologize in advance to the interpreters.
Canada is recognized for its expertise and leadership in mineral exploration. Unfortunately, that expertise stops at the exploration stage. We have an extremely low batting average when it comes to bringing mines into production. This aligns with statements made by previous witnesses.
Remember that the only way the mineral industry can create wealth is by casting ingots. Stock market speculation of junior exploration companies does not generate wealth; there is only growth when mines are producing.
I've had the opportunity to work on hundreds of projects, many of which have reached the feasibility stage. After 43 years, none of these projects have been completed. In Quebec, the last critical mineral mine, if we exclude gold, copper and nickel, is over 40 years old. It's a graphite mine in Saint-Aimé-du-Lac-des-îles. Since then, not a single project has come to fruition. There's no denying that we have a problem.
Given the current profitability of mining projects, their development costs are too high to justify. The majority of critical mineral projects are not in large mines. A lithium mine, for example, will produce 50,000 to 100,000 tonnes a year, which is not a lot. These are small mines.
In terms of development costs, we invest about $10 million in resource definition and development, and about $20 million in metallurgy, feasibility and environmental impact studies. To get to the feasibility stage, you generally do pretty well with a budget of about $30 million.
The problem starts when the feasibility stage is reached. You have to conduct an environmental audit and a market study, in addition to ensuring the project's acceptability, among other things. If there is a modification, you have to start all over again. Ultimately, project development costs can easily reach $80 million to $100 million.
In Saguenay, for example, the BlackRock project has cost $400 million to date. Arianne Phosphate has invested nearly $100 million in its projects, which are still not developed. When the development and construction costs of a mine reach $500 million and it costs $100 million for the studies, there's a problem.
It's therefore unrealistic to ask junior companies to go through all those stages of funding and work, because they don't have the in-house expertise for it. They're unable to do that. The only way companies can succeed is by partnering with major players, multinationals that partner with the projects.
One of the problems in Canada is that just about every diversified mining company has disappeared. Mines Noranda and Falconbridge, among others, no longer exist, which means that very few players are able to carry out rare mineral development projects.
One problem facing junior companies is that most of them have little expertise and aren't able to build a technical team capable of carrying a project through. Managing environmental and metallurgy issues requires a lot of qualified staff. Naturally, they then have to turn to engineering companies, which don't always have the same goals as the mining company itself. As a result, the cost of conducting studies is exploding.
When we say that metallurgical trials usually cost $5 million for the mining sector, it's to produce the concentrate. That doesn't include primary processing, smelting and hydrometallurgy, among other things. To develop such projects, you will easily need a further $100 million. That's what it took for the Nemaska Lithium and Nouveau Monde Graphite projects, for example.