GHG-free aluminum in Quebec | Rio Tinto says yes… on one condition

Rio Tinto does not consider places other than Quebec to produce the 100% green aluminum promised by its revolutionary Saguenay technology, Elysis. However, the company sets an essential condition: preferential rates, even if energy is increasingly scarce.

At the head of the aluminum division of the multinational, Ivan Vella concedes that Quebec aluminum smelters are the most profitable in the world. The portrait is different when it comes time to build new facilities, hence the need to obtain energy rebates, says the businessman.

In interview with The Press For about 90 minutes, the businessman tooth and nail defended the demands of the Australian-British mining giant despite all the privileges he already enjoys. Last December, The Press revealed that Rio Tinto has paid virtually no taxes to the Quebec government in recent years for its aluminum business. The company also has the right to produce its own electricity on the Saguenay and Péribonka rivers, at low cost.

Mr. Vella echoed a refrain that has been heard more than once in the past by referring to the maintenance of paying jobs outside major urban centers – even in the context of labor shortages – and significant economic benefits for many suppliers. Added to this are annual investments of about half a billion made by Rio Tinto in the maintenance of its Quebec facilities, he adds.

The boss of Rio Tinto Aluminum wanted to dispel doubts after causing concern. Last fall, he said that the Elysis technology could not be implemented in Quebec aluminum smelters because they are too old.

It is indeed “very difficult” to modernize an existing aluminum smelter, acknowledged Mr. Vella in an interview. This one “crosses his fingers” so that this scenario can occur, without however having any illusions. The deployment of this new technology may require the construction of new facilities.

“It’s the most plausible strategy,” says Vella.

Space in Alma

In development in Saguenay since 2018, Elysis is considered very promising, but it is still in its infancy. Rio Tinto, Alcoa and Apple are financing part of the project. However, it is the governments of Ottawa and Quebec that have mostly loosened the purse strings so far by offering 120 of the 228 million needed.

The first steps in the commercial phase of this new technology should take place at the Alma site, explained Mr. Vella. The reason is simple: there is space to accommodate new tanks.

“There is a half-line of space [pour des cuves] ready for expansion, says the Rio Tinto executive. It is not surprising that the first three tanks are part of this line which should continue with Elysis. The first one [phase] on a large scale can be done on a virgin site, but integrated with Alma. Then we will have to think about what we will do for the rest. »

According to Mr. Vella, there is talk of a project with an annual capacity of 170,000 to 200,000 tonnes of silver metal at the Alma complex. If all goes as planned, the commercialization of this new technology is scheduled for 2030. Rio Tinto is counting on the willingness of its customers to pay more for aluminum produced without greenhouse gas emissions.

A warning

The Minister of Economy, Innovation and Energy, Pierre Fitzgibbon, repeats that the Elysis technology will make Quebec a leader in the production of green aluminum in the world. He is open to the possibility of granting more electricity at preferential rates to Rio Tinto. It is unclear, however, what the price will be paid by the company.

The head of the Aluminum division of Rio Tinto was cautious in commenting on the state of negotiations between the multinational and the Legault government. For decades, aluminum smelters were able to benefit from preferential hydroelectric rates while surpluses were the norm at Hydro-Québec.

Aware that the context has changed and that the Quebec government’s bargaining power is much greater. Mr Vella issues a warning, however.

“Quebec can say ‘here’s what the price will be’ and we’ll say ‘OK, we just can’t invest at that price’,” he warns. They know that. We recognize that we need to partner with the province to ensure that the balance is right. »

To illustrate that the Legault government should not be too greedy, Mr. Vella presented a list of 16 aluminum smelters that have gone out of business in the United States since 2000 because they were no longer deemed profitable.

” What they [le gouvernement] don’t want to see, it’s Quebec aluminum smelters added to this list of closures because of the good jobs we generate, he says. There’s a balance to be struck and that’s the conversation we need to have [avec le gouvernement]. »

In the wake of remarks made last November by Mr. Vella, former Rio Tinto executives had challenged the Legault government, reported The Press, last month. They asked Quebec not to believe everything that Rio Tinto promises. One of them, Jacques Dubuc, felt that the signals “coming from the company” did not bode “nothing good for the future of the existing facilities in the Saguenay”.

Rio Tinto plans to extract and process critical minerals in Quebec

After taking its first steps in the Quebec sector of batteries for electric vehicles last year, Rio Tinto does not seem to want to slow down. Whether on the extraction or processing side, the multinational is considering other advances in this new market.

“There are probably about fifty people [au Québec] who are working on the battery materials file, says Rio Tinto Aluminum President and CEO Ivan Vella. We look at lithium, nickel, copper and scandium. »

In the niche of critical metals, the multinational has developed a technology to produce three tonnes of scandium annually, a critical mineral used by the aerospace and electronics industry – demand for which is rising sharply.

It also made a $10 million investment in Nano One, a Vancouver-based company that manufactures cathodes – a critical component of the lithium-ion battery found in electric vehicles. In the lithium sector, Rio Tinto is also completing the construction in Argentina of a complex to extract this gray metal.

Asked if this was a model Rio Tinto could replicate, Vella said yes.

“Yes, of course,” he said. Develop or acquire [un projet], absolutely. We want to transform as much as possible. This is the technology we are working on. »

The framework of the mining giant, however, did not want to open his game further or specify a timetable. These are hard-to-achieve billionaire projects, he said.

Since the start of the pandemic, demand for semiconductors – components found in electronic chips essential to the operation of technological devices – has risen sharply. Rio Tinto is trying to take advantage of this by recovering some of the bauxite residue.

“Guess what is filled with gallium [nécessaire dans les semi-conducteurs] ? Bauxite residues, points out Mr. Vella. We are working very hard to filter and recycle these bauxite residues. »

At its Vaudreuil alumina refinery in Saguenay–Lac-Saint-Jean, the company has a bauxite residue filtration and optimization plant, which was commissioned in 2019.