Ottawa to pour up to $222 million in Rio Tinto Ltd.’s Quebec facility


Rio has pledged to reduce greenhouse gas emissions by 70%

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Prime Minister Justin Trudeau said the federal government would contribute as much as $222 million towards Rio Tinto Ltd.’s plans to increase production of critical minerals and reduce carbon emissions at the global mining giant’s iron and titanium oxide facility in Quebec.

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Rio Tinto, the world’s second-largest mining company, plans to spend more than $700 million over the next eight years on its Rio Tinto Fer et Titane (RTFT) operations in Sorel-Tracy, about 70 kilometres northeast of Montreal. Ottawa’s contribution will come from the Strategic Innovation Fund, and the final amount will depend on how much Rio Tinto ultimately spends on the project.  

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The company has pledged to reduce greenhouse gas emissions by 70 per cent, which Rio says would be the equivalent of removing about 145,000 cars from the road. The company’s plans also include quadrupling the production of scandium, a mineral used in aluminium alloys that create lighter and stronger electric vehicles (EVs); producing titanium, a material used in the aerospace and automotive industries; and boosting its capacity to produce lithium, which is essential for batteries used in EVs.

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Rio’s chief executive Jakob Stausholm said in a press release that the company was “excited” to collaborate with the government of Canada and that the investment was part of its commitment to a net-zero future.

Trudeau, who visited Rio’s Quebec operations on Tuesday, said the investment would help create “good middle-class jobs, clean air and made-in-Canada tech,” and strengthen Canada’s critical minerals sector.

The Trudeau government is trying to accelerate its goal of creating an EV battery eco-system on home soil. In August, it signed agreements with automakers Volkswagen AG and Mercedes-Benz AG to “deepening” co-operation on EVs. Earlier this year, Ottawa inked deals with Umicore SA, Stellantis NV and LG Energy Solution Ltd. to build cathode and battery factories.

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Demand for electric vehicles has increased in recent years as the world looks to decarbonize, and Canada, which is rich in the minerals needed to make batteries, is keen to take advantage. However, some analysts say the country has a lot of catching up to do. For example, Canada ranked 13th out 14 countries in global accounting firm EY’s EV readiness index released last month.

Any company — or country — that manages to produce minerals and metals while reducing its carbon footprint will have a competitive advantage, as net-zero requirements will put increasing pressure on companies to reduce emissions. RTFT is a testing ground for new technology that Rio Tinto says could reduce emissions by about 670,000 tonnes.

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The miner also hopes to extract scandium oxide from its waste streams of titanium dioxide production through new modules, a move that can increase its scandium oxide production to 12 tonnes per year from its current capacity of three tonnes, without the need for additional mining, it said. 

The latest announcement is part of a series of steps that Rio has taken in recent months to boost its presence in the green energy metals sector.

In late September, the company set up a demonstration plant to process battery-grade lithium. Earlier last month, Rio inked a deal to obtain up to a 60-per-cent interest in a copper project owned by Toronto-based McEwen Copper Inc. It’s also in the process of acquiring two-thirds of the Oyu Tolgoi mine in Mongolia, which it considers to be one of the world’s largest new copper-gold mines.

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