Benefits to Rio Tinto of Canada's
Pay-the-Rich Schemes
Placards from Montreal action during lockout of Bécancour
aluminum smelter workers,
November 28, 2018
Rio Tinto is no stranger to receiving subsidies from the Canadian and Quebec governments for its operations in Quebec. What is that about?
Rio Tinto's Chairman, Dominic Barton, is well versed in the subject. In 2019 Prime Minister Justin Trudeau appointed Barton, who was global managing director for McKinsey and Company until 2018 and Chairman of Teck Resources Ltd. from 2018 to 2019 -- as Canada's Ambassador to the People's Republic of China. This appointment by Trudeau set a new record for government's patronage appointments to the diplomatic service. Rio Tinto itself has been the recipient of government handouts many times in the past.
In 2018-19, during the more than
13-month lockout of workers at the Bécancour aluminum smelter
(ABI) owned by the Alcoa and Rio Tinto cartel, the Quebec
Liberal government of Philippe Couillard allowed ABI to forgo
$108 million in payments to Hydro-Québec for its allocated block
of energy. The reason given was that the contract between the
government, Hydro-Québec and ABI stipulated, among other things,
that a strike or lockout is a case of "force majeure" or an "Act
of God" that releases the company from its obligation to pay for
the block of energy reserved for it, even though this block had
already been planned and produced.
In 2018, the governments of Quebec and Canada each gave Rio Tinto $80 million to develop the Elysis technology, which involves producing aluminum without emitting greenhouse gases. Initially, Elysis was due to come on stream in 2024, but the project has now been pushed back to 2030-31. Rio Tinto promised in 2023 that its Alma plant in Quebec would benefit from the Elysis process on condition that it received an additional 600 megawatts of power.
Critics said that the other major producers in the global aluminum industry have never succeeded in developing such a technology on an industrial scale. Premier Legault responded to them in June 2023 regarding the Elysis process, saying that he was "prepared to take that risk" with Rio Tinto. His government announced in June this year that Rio Tinto and Investissement Québec were setting up a limited partnership using the first technology licence issued by the ELYSIS joint venture. Rio Tinto is putting in $235 million, while the financial arm of the Quebec government is contributing $140 million.
In 2021, Rio Tinto received a grant of $850,000, including $500,000 from the Ministry of Energy and Natural Resources and $350,000 from the Ministry of the Economy and Innovation, to develop a process for extracting scandium oxide from its mine tailings. Scandium, as an alloy with aluminum, is considered a strategic mineral for the military aerospace industry. Pierre Fitzgibbon, the Minister of Economy and Innovation at the time, said: "It's symbolic [the subsidy]. We want to send a signal to Rio Tinto, a London-based company, that we are going to be there to support the development of critical and strategic minerals."
On October 11, 2022, during a visit to Rio Tinto's Sorel plant, Trudeau and Innovation, Science and Industry Minister François-Philippe Champagne announced federal government grants of $222 million to Rio Tinto to proceed with "the electrification of furnaces and the replacement of coal" for the "decarbonization" of the plant. Located less than 100 kilometres upstream from Bécancour, the plant processes titanium ore from Havre St-Pierre to extract titanium dioxide and scandium oxide, two other strategic minerals that also have military applications. Rio Tinto has already announced that it will also proceed with refining lithium at the same plant from a number of international sources "if the conditions are right."
In June, the Quebec government announced financial assistance in the form of preferential loans of up to $150 million to enable Rio Tinto to install 96 new potlines at the Jonquière aluminum smelter in Saguenay, a $1.4 billion project.
Even more recently, in July Quebec's Ministry of the Economy, Innovation and Energy announced that it was buying the Thurso cellulose plant in the Outaouais region, which was owned by Fortress Global, a company that declared bankruptcy in December 2019 after ceasing operations in October 2019, resulting in the layoff of more than 300 workers. The mill was forced to suspend operations due to excess inventories and the fall in the price of cellulose pulp on the world market. Since 2010, the Quebec government has invested more than $107 million in the former pulp and paper mill and will be spending at least another $25 million to decontaminate the site.
The site decontamination was demanded by Évolys, a joint venture formed by the multinational Rio Tinto and its U.S. partner, Aymium, as a condition for it to build a metallurgical biocarbon plant on the site -- a $50 million project. Made from forest residues, this biocarbon, also known as biochar, could replace coke in the production of certain metals, including titanium, at Rio Tinto's Sorel-Tracy plant, as part of its plan to "decarbonize" its operations by sequestering carbon dioxide. The new Minister of the Economy, Innovation and Energy, Christine Fréchette, declared on September 9 that "the requalification of the [Thurso] plant by Évolys Québec, in addition to contributing to the decarbonization of our metallurgical companies, is furthering the development of the Quebec economy. It's a win-win situation!"
Fréchette needs to explain what it is that Quebeckers have won in this transaction, and with other subsidies given to Rio Tinto. In July, the government assumed all the risks and costs by becoming the owner of the facilities as part of Fortress Global's bankruptcy proceedings. Évolys will lease part of the premises, but will not pay any rent to the government.
(With files from TML, Workers' Forum, Radio-Canada, La Presse, Journal de Montréal)
This article was published in
Volume 54
Number 11 - November 2024
Article Link:
https://cpcml.ca/Tmlm2024/Articles/M5401110.HTM
Website: www.cpcml.ca Email: editor@cpcml.ca