Rio Tinto Group RIO-N and the federal government are planning to invest a combined $737-million to modernize a large Quebec metals processing plant that could see the giant Anglo-Australian miner dramatically cut its emissions and become one of the first North American producers of the critical metal titanium.
Rio Tinto, one of the world’s biggest mining companies, said in a release Tuesday it will invest up to $515-million into the Sorel-Tracy, Que., facility over the next eight years. Ottawa is planning to kick in as much as $222-million for the project over the same time frame.
The plant in southwestern Quebec currently produces steel, scandium and titanium dioxide. The more than 70-year-old plant is a major source of Rio Tinto’s existing carbon emissions in Canada, largely because its blast furnaces burn vast quantities of metallurgical coal. The plant currently emits more than one million tonnes of CO2 a year.
“We cannot afford to keep running it as is,” Jakob Stausholm, chief executive of Rio Tinto, said in an interview. “We have to change.”
At Sorel-Tracy, Rio Tinto is testing a new processing method called “blue smelting,” which could replace coking coal with biochar and hydrogen gas. On paper, this is a far less environmentally-damaging process. The company says the technology has the potential to reduce emissions at Sorel-Tracy by 70 per cent. However, still at the testing phase, it is unknown whether the technology will replace conventional blast furnaces.
“There’s no guarantee that this will work,” Mr. Stausholm said, “But we have the confidence to make the investments now, and I will say to you, we have to sort it out.”
The federal government is investing in the Quebec plant as part of its plans to support the efforts of Canadian-based companies to build much-needed critical minerals infrastructure. In addition, by helping the mining industry decarbonize energy-intensive industries such as iron ore, steel and aluminum, it helps Canada meet its long-term net-zero emissions targets.
François-Philippe Champagne, the federal Minister of Innovation, Science and Industry, said in an interview that investments in projects such as Rio Tinto’s titanium and scandium plant are part of the government’s long-term push “to make Canada the supplier of choice” for critical minerals.
The funds from Rio Tinto and Ottawa will also allow the plant to increase its existing scandium production fourfold. Earlier this year, the company became the first North American supplier of the critical mineral, which is used in an alloy to strengthen and lighten aluminum.
Last year, the project received US$650,000 in financial assistance from the Quebec government. Ore processed at the plant for scandium mainly comes from waste materials from the Havre-St-Pierre, Que., titanium dioxide mine.
Ore from the mine may also allow Rio Tinto to produce titanium metal at Sorel-Tracy. If the company succeeds in the pilot project, it will become one of the largest titanium producers in North America. Currently, China dominates the market for the extremely strong and light metal that is used in myriad industrial applications, including as an alloy in the aerospace industry.
Ottawa is keenly aware of the need to challenge Chinese dominance in many critical minerals used in the current transition to lower-carbon energy. The Asian superpower has a lock on many of the key metals for electric vehicle batteries, including lithium, cobalt and graphite.
The federal and provincial levels of government have already invested hundreds of millions in critical minerals ventures this year. Among the companies to attract government funding were South Korean EV battery maker LG Energy Solution Ltd. and automaker Stellantis NV STLA-N, which announced plans in March to build an EV battery plant in Windsor, Ont.
The federal and Quebec governments also committed an undisclosed amount to General Motors Co. and South Korea’s POSCO Chemical Co. Ltd. for the construction of a $400-million battery parts plant in Bécancour, Que.
“It’s no longer, why Canada,” Mr. Champagne said. “It’s how, and when, we can accelerate these types of investments.”
Brazilian mining giant Vale SA, which owns several large nickel mines in Canada, is currently considering the construction of a processing plant in Quebec that would make battery-grade nickel, which would be the first of its kind in Canada. Mr. Champagne said the government is in “ongoing discussions” with Vale about potentially investing in the project.
Niall McGee