This transcript has been generated using machine learning technology. While this technology was trained with CIBC terminology, it may contain errors.

Tom Heintzman: Welcome to The Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape. I’m your host, Tom Heintzman. Please join me as we explore today’s most pressing issues with special guests that will give you some new perspectives and help you make sense of what really matters.

Mark Selby: “By 2040, we think with Crawford off the ground if that is successful, that generates $70 billion in GDP for the country, just Crawford on its own. Yeah, and in the downstream that’s another several tens of billions of dollars of GDP growth. And we think we have four or five other projects in the district. And so you start to get to some very, very large economic impacts.”

Tom Heintzman: Over the last several episodes, we’ve been looking at various segments of the electricity value chain and some of the issues, technologies, and opportunities that are becoming relevant. This episode, I’d like to focus on another example that brings to life many of the themes we’ve been discussing. Over the last year, the Canadian federal government has announced a number of major projects, many of which are either electrical or are enabled by the electricity grid. These projects include large electricity generation and transmission projects. As well as other projects such as mining, in which electricity plays a key role. From energy corridors to critical minerals, many of these projects have the potential to strengthen resilience and advance a low carbon economy. On today’s episode, we’ll explore the Crawford Nickel Project, a proposed nickel cobalt mine near Timmins, Ontario, which represents one of the largest nickel deposits in the world. Once operational, the mine will strengthen Canada’s position as a leading global supplier of high-quality low-carbon nickel for electric vehicle batteries and green steel. Today, we’ll dive deeper into the Crawford project’s strategic importance for Canada and how it may serve as a potential template for future nationally significant resource projects. For this discussion, I’m pleased to welcome my guest, Mark Selby. Mark is the founder and CEO of the Canada Nickel Company, which is advancing the Crawford Nickel Project. Mark is recognized as one of the leading authorities on the nickel market, and we’re fortunate to have his insights at our third annual CIBC Electrification Summit back in April when he participated in our panel on the electrification challenge facing Canadian mining. Mark, we’re glad to have you back here at CIBC. Welcome to the show.

Mark Selby: Thanks very much, Tom, and thanks for the opportunity.

Tom Heintzman: Mark, can you begin by providing our audience with a brief overview of your company and also explain how the Crawford Nickel Project fits into the company’s broader vision for building a large-scale nickel district in Timmins?

Mark Selby: Sure. I’ll just start with Crawford first and then talk about the potential for the entire district. We founded the company in 2019 on the Crawford asset, which at that time had just had four drill holes in place. We’ve taken it from fifth drill hole to receiving our main federal permit back in July. We were referred to the major projects office last November and then also to the provincial 1P1P process in early January. Crawford’s the second largest nickel reserve in the world. When fully ramped up, it would be the Western world’s largest nickel sulfide operation. In today’s geopolitics, Western world is now crept back into the conversation in terms of safe allied supply of nickel. Again, the most important of the critical minerals are those ones where China has a very high degree of dominance and nickel is one of those commodities. So having a large Western world source of nickel is very, very important. Additionally, the nice thing with these types of nickel deposits, which are referred to as ultra-mafic nickel deposits, the host rocks that host these deposits are made up of minerals that are able to spontaneously absorb CO2. So, in addition to being the Western world’s largest nickel project, we developed a process called IPT carbonation, which we’ve applied for patents in multiple jurisdictions, our in-processed tailings carbonation, which allows us to inject and store up to a million and a half tons of CO2 per year from the environment, which would make us one of Canada’s largest carbon storage facilities. The potential of the district is, you know, in addition to Crawford, we now have nine separate resources around the district. We believe that four or five of the other projects that we have will ultimately be bigger and better than Crawford. So once we get going with Crawford, and if that is successful, which we hope it will be, we’ll be able to effectively cut and paste what we build there, you know, at four or five different operations in the region and turn Canada back into the second largest producer of nickel and have the potential to take out you know tens of millions of tons of CO2 per year. And alongside some of the our partners like Netcarb and GeoRedox and some of the others who are exploring you know more CO2 potential, more hydrogen generation potential, potentially as much as hundreds of millions of tons of CO2 removal every year.

Tom Heintzman: That’s fascinating, Mark. So I’d like to just touch now on the permitting process. The Crawford Project was referred to Canada’s Major Project Office, which is, as many of our listeners will know, a federal agency established under Prime Minister Carney. And the purpose of the Major Projects Office is to fast-track and coordinate nation-building infrastructure projects of national interest. The project was also accelerated by the government of Ontario through its new One Project, One Process framework. What does this coordinated review require? How does it simplify things for you? And what work was needed to support the permitting and assessment process? Can you can you give us a summary of how these new offices and processes help you in permitting the project?

Mark Selby: Yeah, so the best way I can describe them is effectively, you know, having a permitting concierge service in terms of helping us get through various roadblocks. We were already well down the path in terms of getting both federal permits and then working on the number of provincial permits that we need to get in place. But having this additional endorsement just increases the certainty. Our company and our team’s in a good position to be able to sort of compare before and after in terms of the various changes governments have made around permitting. So just over a decade ago, we permitted the Dumont project in Quebec, which is very similar to our Crawford deposit. The attitude of the regulators and the willingness of the regulator to work with the proponent and basically focus more on finding solutions than trying to slow things down it has really, really changed. So the best example I can give in terms of sort of quantifying, you know, what these endorsements mean, if I had told you 11 years ago to say, look at we think we can break ground in 15 months on construction in this project. And, you know, we’ve got a number that we got our main federal permit in July, but there’s still a number of supplementary permits you know, that we need to have in place. I would have said in 2015 there’d probably be a 50% chance that we could get there in 15 months. You know, there’s just, Individuals are away, there’s specific issues with specific departments, things get caught on people’s desks. And so the ability to move all the pieces of paper through and get all the approvals in a timely manner is challenging. I would say just with the approach that the governments have taken over the last three or four years in terms of really focused on trying to get more projects permitted. Again, equally rigorous. We’re not cutting any corners. There’s no change in in terms of any of the regulations that we need to comply with. It’s just getting through them in a more efficient basis. We would probably be having, you know, 75-80% chance that we would still be able to hit that, end of next year deadline in terms of being able to break ground. Having the major projects office and this one 1P1P endorsement, you know, takes that up towards 90%. We’ve got permitting plans in place both with the federal government and the provincial government. So we’re both working towards the same schedule in terms of what each of us needs to deliver by when. I know that if we have any specific issues, that we have a single point of contact that can go in into government and try and resolve that as quickly as possible. So it’s really increasing the certainty to be able to deliver things in a quick time frame is the big benefit of those endorsements.

Tom Heintzman: That’s very comforting. Over the last twenty-five years developing projects. I’ve certainly heard about all the bureaucratic red tape and lack of coordination. So it’s fantastic to hear that there’s a very determined effort to coordinate both at the federal and the provincial level. Mark, access to clean electricity is critical to Crawford’s operations. Can you explain to our listeners the role that electricity plays in your process and also how your access to electricity was enabled?

Mark Selby: Yeah, so in terms of the opportunity to have access to relatively low cost, low carbon power is something I think in Canada we take for granted. The reality is, is if you look at these, you know, 80 or so different regions in the world that do significant mining, there is probably only a dozen or so that do have that relatively low carbon, low cost grid availability of power. And why that’s important for an operation like Crawford. Most of the large-scale projects today, we’re not finding great big high-grade deposits anymore. We mine those out a hundred years ago. In terms of the resource that’s available today, they tend to be lower grade deposits, where they’re lower grade golds, lower grade copper and lower grade nickel. And what that means is we have to grind up lots of rock to be able to extract the metal that we want to do. And grinding up all that rock requires a large amount of energy. So having access to that low carbon, low-cost electricity means we can get through that stage with a relatively low carbon footprint. The two other pieces where we’ve sort of gone beyond a typical mining operation, in the mining part of being able to produce these metals, there’s something called trolley assist. So the way it works is on the main hall ramp, you install effectively the streetcar lines that you see here in in downtown Toronto, and the truck as it’s fully loaded about to go up this hill where you burn about two-thirds of the diesel that you consume on a mine site, instead of using diesel, we get that electricity from the overhead pantograph. And so that allows us to substantially reduce the amount of diesel fuel that we need and reduce the carbon footprint of that operation. Today we just announced that we’re awarding the mine hall fleet to Komatsu. And a big driver of why we chose them is not only do they have a lot of trolley implementations around the world, their battery electric vehicle options, which by the time we break ground, we’re expecting that they’ll start to have delivery in volumes of those battery electric trucks. We can have a very seamless transition to those battery electric trucks, which again will reduce our diesel usage even more and reduce our carbon footprint even more so. So, that helps again make a lower carbon operation. And then third piece of it, we’re looking to not only produce concentrates and then not export them out of the country, but do that next stage processing. And generally, if you’re taking mineral concentrates to convert them into a metal product, particularly we have a nickel chrome magnetite iron ore that has nickel and chromium in it and to convert that to metal requires a significant amount of electricity. And again, being able to convert that material into a usable finished metal product, we’re able to do that with a very, very low carbon footprint. And the big opportunity for us on that front is, Europe right now with CBAM, is a reality now for steel producers in that area and their carbon costs are gonna be implemented 10 percentage points at a time over the next 10 years, allows us to basically export, Ontario’s lower cost, lower carbon grid power to the rest of the world.

Tom Heintzman: Mark, you mentioned CBAM, and just for our listeners, many will know, but that’s the Carbon Border Adjustment Mechanism in the EU, which is effectively a tariff coming in based upon the carbon that was used to produce the product. I’d like to pull on that thread a little bit more. It’s fantastic that Canada Nickel is trying to capture more of the value chain and increase the amount of value generated in this country. Could you elaborate exactly what steps Canada nickel is making to capture more of the valley chain, whether it’s in smelting or refining? And to what extent is it possible for the Canadian mining industry more broadly to similarly move downstream and capture more of the value. We’re frequently criticized for mining, but then sending it out of the country to process. And just wondering what the opportunity here is here in Canada.

Mark Selby: Yeah, so we’re lucky in terms of the commodities that we want to produce. There’s a real economic argument for doing it. It’s not just, because we’re being patriotic and doing that next step here. There is a very, very solid business case. To that first point, Minister Lecce in Ontario here has talked about ripping and shipping. And the challenge is once you ship that material out of the country, all of the subsequent value add downstream steps happen in that other country. So it’s a massive GDP loss to Canada to have that material go outside the country because there’s very little chance it’s coming back once it’s left. And so in general, I think there’s more opportunities to do it. A lot of companies I think kind of took the easy way out. We’ll just ship it off to China. They have less environmental regulation, less labor regulation. And I don’t want to make the investment in building that processing capacity here in Canada. So I think you’re going to see more of it, particularly on the critical minerals front, because, again, the whole thrust on critical minerals is getting China out of the supply chain. And as soon as you ship it to China, you’re defeating the whole purpose of the investments that Western governments are making in domesticating these critical minerals value chains. The opportunity in nickel is pretty unique and it’s both a function of the deposit and a function of the structure of the industry. So I was at Inco from 2001 to 2006. I was head of strategy in 2005 when we tried to merge with Falconbridge to create a big Canadian diversified company at home. The nickel smelting industry in the West is close to an oligopoly. You only have four or five participants, you have one Chinese participant, and so if you look at the value that’s captured by the smelting, refining, the processing portion of it, it’s much, much larger than say copper and some of the other commodities, and it’s a function of that small group of potential suppliers. But the other part of it is, the supply chain that was built, the processing chain that was built, was built for highly complex, where you’ve got nickel, copper, cobalt, platinum group metals, and you’re trying to refine each of those because 100 years ago you needed to refine them at a 99% to be able to utilize them in a lot of uses at that time frame. So, they’re very expensive, right? And again, you’re dealing with legacy costs that are 50 to 60 years. We’re fortunate that our type of deposit, again, it’s low grade in the ground, but it produces a very high grade concentrate. So our concentrates is, which is what you use to start the processing step are literally, double to triple what most nickel concentrates are. And they’re very simple. They don’t have a range of other metals that you need to pull out. It’s basically nickel cobalt and a little bit of iron that you’re dealing with. And so number one, that allows us to use a much simpler process. We effectively just roast off the sulfur, capture it as acid, and then put it in a furnace and convert it to metal. That allows us to process nickel at a fraction of the cost of the traditional smelters so there’s a very, very strong business case on the nickel side to be able to do that processing here in Canada. And again, we’re just using a technology that Inco used in multiple occasions globally back in the 1990s and 2000s, and has a very low environmental footprint. On the nickel chrome magnetite side, we’re doing there is a there’s a whole series of alloy steels and stainless steels that use various combinations of nickel, chromium, and iron, and so, rather than spend a lot of money to pull them apart, just to have those metals put back into a furnace by a steel company at some point in the future, we’re going to do that next stage transformation to convert them into a semi-finished steel product that will allow us to do that, very cheaply and effectively given the power cost here in Ontario, but it also creates the opportunity for us to capture the CO2 emissions from that stage and put that into our tailings with our IPT carbonation process that we generated. Out of the gate, we should be able to produce a steel product with about a half a ton of CO2 per ton of steel, which would make us a very, very low carbon footprint operation. And given Timmins is located in an area with a lot of forest biomass harvesting capacity, that we’re looking at utilizing that for biochar, the opportunity to actually create a zero carbon footprint steel, which the industry’s been chasing. Some of the early adaptation using lots of hydrogen are turning out to be very expensive, but we have the advantage of the power that we have here in Ontario and the waste rock that we’re mining to pull out these minerals help sequester the CO2 that gets generated by transforming them downstream. So, those are the big drivers in terms of why we’re doing these downstream operations.

Tom Heintzman: Fascinating, Mark. It brings together so many themes that we talk about in the show in terms of electrification and reduction in carbon and the fact that we could potentially have green nickel or zero carbon nickel being produced in the not too distant future in Timmins. It’s very exciting. I have one last question for you. The final question usually asks you to look forward in time. as we’re recording this podcast, global investors and business leaders are convening in Toronto for the first Canada Investment Summit, which aims to catalyze investment for national infrastructure and energy projects. How, in your view, might the summit shape expectations for the Crawford project? What outcomes or signals will you be watching for in terms of investment policy support and broader momentum for critical minerals development in Canada?

Mark Selby: I think the biggest and most important impact of the investment summit, is really highlighting the fact that Canada is open for business with very, very large pools of capital. The reality is most of those investors, aren’t investing in development stage mining projects at this point in time. But however, setting the climate that we’re open for business and we want to see these mining projects go forward. The Canadian investment book, they just didn’t put in the major projects, mining projects. They put a pretty healthy list of various projects at various stages. And again, I think we don’t have the capital in Canada to advance all these critical minerals projects forward. And so opening up and really showcasing what Canada has in terms of opportunities. I think again are you’re not going to see a mining project announcement, in the next day or two. You might not gonna see one next week. But in in a couple months, in six months, in a year from now, you will see more of these investments from foreign companies. You will see the Canadian government, help prime the pump in terms of, helping to catalyze some of these investments. In our investment approach, what we’ve used in at Canada Nickel to help get the funding package for Crawford together. We have an off-take agreement with a Korean battery company with Samsung. We signed a deal with the Scandinavian investment bank to help us put together a $600 million investment tax credit facility, which allows us to use the federal tax credits as equity capital. We signed an off-take agreement with a German trading company, who are low carbon steel is very appealing, but they have a mandate to help decarbonize European industry. And there’s a great strategic fit there. And then today with the announcement with Japanese equipment maker to help provide the fleet that we need that will ultimately help us decarbonize the mine. It’s putting together those global set of puzzle pieces to unlock what we have at Crawford ultimately what the objective of the government is on that front. And the king thing for us is, in terms of your first question that you typically ask, by 2040, we think with Crawford off the ground if that is successful, that generates $70 billion in GDP for the country, just Crawford on its own. Yeah, and in the downstream that’s another several tens of billions of dollars of GDP growth. And we think we have four or five other projects in the district. And so you take 70 to 100, multiply that by four to five, you start to get to some very, very large economic impacts, and that is the kind of thing that I think government’s very keen to see happen is to really catalyze that economy scale impact that Canada used to have back in the 1950s and 60s.

Tom Heintzman: Fascinating, exciting. I can’t wait to hear how it’s gone in in five years. So I’ll have to check in with you. Mark, thank you for taking the time to join the show today. I know you’ve got lots of media appearances today, so we feel very privileged. And thank you to the listeners for tuning in.

Mark Selby: Thanks, Tom.

Tom Heintzman: Please join us next time as we tackle some of sustainability’s biggest questions, providing you different perspectives to help you move forward. I’m your host, Tom Heintzman, and this is The Sustainability Agenda.

Disclaimer: The materials disclosed on this podcast are for informational purposes only and subject to our Code of Conduct as well as CIRO rules. The information and data contained herein has been obtained or derived from sources believed to be reliable, without independent verification by CIBC Capital Markets and, to the extent that such information and data is based on sources outside CIBC Capital Markets, we do not represent or warrant that any such information or data is accurate, adequate or complete. Notwithstanding anything to the contrary herein, CIBC World Markets Inc. (and/or any affiliate thereof) shall not assume any responsibility or liability of any nature in connection with any of the contents of this communication. This communication is tailored for a particular audience and accordingly, this message is intended for such specific audience only. Any dissemination, re-distribution or other use of this message or the market commentary contained herein by any recipient is unauthorized. This communication should not be construed as a research report. The services, securities and investments discussed in this report may not be available to, nor suitable for, all investors. Nothing in this communication constitutes a recommendation, offer or solicitation to buy or sell any specific investments discussed herein. Speakers on this podcast do not have any actual, implied or apparent authority to act on behalf of any issuer mentioned in this podcast. The commentary and opinions expressed herein are solely those of the individual speaker(s), except where the author expressly states them to be the opinions of CIBC World Markets Inc. The speaker(s) may provide short-term trading views or ideas on issuers, securities, commodities, currencies or other financial instruments but investors should not expect continuing analysis, views or discussion relating to those instruments discussed herein. Any information provided herein is not intended to represent an adequate basis for investors to make an informed investment decision and is subject to change without notice. CIBC Capital Markets is a trademark brand name under which Canadian Imperial Bank of Commerce (“CIBC”), its subsidiaries and affiliates provide products and services to our customers around the world. For more information about these legal entities, as well as the products and services offered by CIBC Capital Markets, please visit www.cibccm.com.

Canada Nickel’s big play for low-carbon mine-to-metal growth

Tom Heintzman

MD & Vice-Chair, Energy Transition & Sustainability

CIBC Capital Markets

For the full catalog, visit