Aim of Making Quebec a "World-Class Lithium Hub"

In announcing that the mining giant Rio Tinto plans to establish "world-class lithium hubs" in Quebec following its U.S.$6.7 billion deal to buy Arcadium Lithium, CEO Jakob Stausholm said in an October 9 conference call with analysts: "The hard rock opportunities in Canada are very attractive to us." He added: "For 20 years, Rio Tinto monitored not just the company, but the entire industry, looking for the right time to buy."

A number of specialists believe the deal is a game-changer for the lithium industry, easing doubts that mounted as electric vehicle (EV) sales growth slowed and other battery technologies came on the market. According to RBC Capital Markets analysts, "this makes Quebec an ideal location for supplying the growing electric vehicle market in North America."

"We are extremely keen to find ways to accelerate the projects," said Arcadium CEO Paul Graves, "and within Rio, we can." Arcadium, along with Investissement Québec, is co-owner of beleaguered Nemaska Lithium and had previously paused a second Quebec project while it looked for investors.

Still, according to financial analysts, in a context of automakers delaying plans to make EV batteries, the Rio Tinto acquisition will encourage larger mining companies and energy companies in the world to look at Canadian assets. They claim that Rio has been one of the few mining conglomerates in recent years that expressed "bullish sentiment around lithium."

Nemaska Lithium, Case in Point

Less than a week after Ford's October 31 announcement that it was withdrawing from the battery cathode plant project in Bécancour, Quebec's Minister of Economy, Innovation and Energy, Christine Fréchette, went to Bécancour to offer reassurance to foreign investors. There, on November 6, she announced that the Quebec government is doling out another $250 million to Nemaska Lithium, which is 50 per cent owned by Investissement Québec, the government's "investment arm." She said, "With the battery industry, we are consolidating our nation's position as a leader in the energy transition, as well as creating well-paying jobs for Quebeckers. We're continuing our work to develop a strong battery industry that will enrich and decarbonize Quebec!"

This same message has become the Coalition Avenir Québec (CAQ) government's mantra: pay-the-rich schemes for narrow foreign private interests are needed as a way of building a leading edge "sustainable economy." Investissement Québec's website reports: "The investment of $250 million is part of the government's commitment to develop Quebec's battery industry and support the sustainable growth of our economy. Future spin-offs will enable the government to invest in services for the population, particularly in health and education."

Such statements do not even fool the gullible.

Prior to being acquired by Arcadium Lithium and now Rio Tinto, the Whabouchi deposit's owner, Nemaska Lithium, had emerged from creditor protection in August 2020 under the joint ownership of Investissement Québec; Pallinghurst Group, a UK-based mining and metals private equity firm; and Orion Mine Finance, a U.S.-based mining and metals private investment firm.[2]

Besides putting $80 million of public funds in the Nemaska Lithium private mining and metallurgical venture in May 2018, the Quebec government again came to its rescue in 2020 by buying it back, along with Orion and Pallinghurst. It also paid back a huge portion of the $146.54 million in liabilities owned in part by Orion.

The Quebec government also put in another $200-300 million of public funds to retain Pallinghurst as a "partner" in the rescue package. Many small investors who put their life savings into this venture lost everything when Nemaska Lithium filed for bankruptcy.[3]

Location of the port serving the Bécancour (Quebec) industrial park

The fact that critical minerals such as lithium, copper, nickel and now graphite are being mined in Quebec under foreign ownership did not stop Premier François Legault from declaring, in his speech inaugurating the CAQ government's first term: "In Quebec, we need important companies that are owned by Quebec interests."

It seems that critical minerals such as lithium and graphite are not important enough for him to consider part of "Quebec's green sustainable economy."

Claiming that his government is "creating more wealth for Quebec," Legault is bending over backwards to support private foreign interests that are mining critical minerals with all kinds of pay-the-rich schemes. These are in the form of direct state grants and subsidies, interest-free loans, infrastructure such as roads, hydro power and, in the future, new railroads. For example, the Qc Rail project currently being studied would link the trans-Canada railway system at Senneterre, in Abitibi, to Baie-Comeau, a deep-sea port facility on Quebec's North Shore.[4]

Rio Tinto and other global mining conglomerates, such as BHP and Glencore, are in a race to put their greedy paws on as many critical mineral projects related to lithium as they can. This is because huge pay-the-rich schemes are being put forward by the likes of the U.S., Canadian and Quebec governments, claiming high ideals, like "greening" the economy and "national security," instead of building an economy that serves the needs of the people.[5]

The people of Quebec and Canada do not subscribe to such an outlook that disinforms on what the real issues are when it comes to fighting for a bright future for themselves and for all of humanity. More specifically, they reject this notion that a "green" economy means that Quebec and Canada's economies should be integrated into the U.S. war machine or be subject to pay-the-rich schemes.

Notes

1. "Rio Tinto just put lithium M&A officially in play -- a jolt for the industry, and potentially big news for Canada," by Anita Balakrishnan, The Logic, October 10, 2024.

2. See "Bailouts of Private Mining and Metallurgical Ventures," TML Weekly, October 24, 2020.

3. See "Quebec Agenda for a 'Green Economy' -- A Formula for More Sellout -- Enriching Private Foreign Interests and Strengthening Anglo-American Global Domination," Fernand Deschamps, Renewal Update, December 17, 2021.

4. "Transportation Infrastructure Program, Feasibility Study, Phase I and Prefeasibility Study, Phases II-III," Cree Development Corporation, La Grande Alliance, March 20, 2020, p. 80.

5. See "Direction Legault Government Has Set for Quebec Economy: Processing Critical Minerals in Bécancour Region," Pierre Chénier, TML Daily, December 3, 2022.

(With files from Quebec government, TML, Radio-Canada, The Logic, La Presse, Journal de Montréal)

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This article was published in

Volume 54 Number 11 - November 2024

Article Link:
https://cpcml.ca/Tmlm2024/Articles/M540119.HTM

Website:  www.cpcml.ca   Email:  editor@cpcml.ca