Could Canadian Port Become Global Graphite Gateway?

PERSPECTIVES No.8  |  August 2024

In 2019, former Canadian Prime Minister Brian Mulroney made what would be his last visit to Baie-Comeau, the port town where he was born and from which he launched a successful election campaign that championed the role of Quebec and its resources in the nation’s future.

In a speech at the church he attended while growing up, Mr. Mulroney extolled the virtues of the town as a portrait of Canadian potential.

“I suppose that if there were a model for a growing Canada, it would have been Baie-Comeau, a small town with big dreams,” he said in a televised speech.

In its heyday, the port city of Baie-Comeau had a population of around 29,000 and hosted not only Quebec’s but some of Canada’s most important resource companies, including leading pulp and paper and aluminum companies. Starting in the early 2000s, the town’s population dwindled by about a third as industry and workers moved to the province’s larger port cities, like Montreal.

Nearly a quarter century later, Baie-Comeau is looking at a reboot fashioned around the energy transition, and its deepwater port facilities are attracting the attention of industries eager to use it as a gateway for critical resource supply chains, including a bid by Northern Graphite Corp. to build a battery anode material (BAM) facility. The plant will take graphite from Northern’s mines in Canada and Namibia to produce 200,000 tonnes per year of BAM, enough to supply four 50GW Giga factories and build lithium-ion batteries for 2.5 million electric vehicles per year.

If successful, Northern’s bid would mark a milestone for Quebec as the province sets itself up as a champion of Canada’s green energy revolution and adds new impetus to a burgeoning industry for graphite, which saw the discovery of the Lac Gueret graphite deposit by British Colombia’s Quinto Mining In 2002. At the time, graphite was best known for its use in refractory bricks for the steel industry or heat management in mobile phones. Today, with the world embracing an EV revolution, graphite and Baie-Comeau are again together in news headlines as Northern Graphite vies to build one of world’s largest battery anode material plants, if it can get the power to run it.

“Baie-Comeau is one of the few places remaining in Quebec where you can have access to sufficient space and infrastructure for a unique project like the one that Northern Graphite is proposing,” says Guy Simard, a director for industrial development for the Baie-Comeau region.

By 2030, 400+ gigafactories will be in operation globally, representing almost nine terawatt hours of annual production capacity. Northern’s Canadian and Namibian projects to feed BAM Plant.

The road ahead is not without its challenges – Northern still needs to secure the power to build and run the facility – but proponents of the project like Mr. Simard say that the plant fits the province’s criteria for green energy, decarbonization, social acceptability and the potential to drive economic growth.

Following is an interview with Guy Simard, edited for length, about how Northern’s BAM plant would provide a reboot to the port region, even as it plans to invigorate its status as a gateway of Canadian goods to global markets, including to Europe’s massive commodity port of Rotterdam.

Let’s start with a little about yourself and Innovation et Development Minicouagan and its mission?

I am the Director of industrial development for Innovation et Development Manicouagan, whose mission it is to work with municipal, provincial and federal agencies to help drive economic development for the region. My focus is on major projects and infrastructure in the territory, where Baie-Comeau is the main city and economic engine, supporting industries from forestry and energy to metallurgy and tourism.

How important is Baie-Comeau to the region, Canada and Quebec?

The port area has a history of building big, and in the 1940s and 1950s hosted some of Quebec’s most important companies, including what is now Resolute Forest Products, whose roots stretch back to the Ontario Paper Company (1913) that merged with the Quebec North Shore Paper Company (QNS Paper Company Limited) that was operating in Baie-Comeau. The town was also host to major aluminium companies, including what is now Alcoa but started life first as Canadian British Aluminium and then became Reynold’s Aluminium.

Baie-Comeau is ideally situated, with easy sea, rail and road access to the North American and global battery markets

What you have to understand is that when we talk about Baie-Comeau, it’s not just about the public port, but also about the private terminals, like Alcoa, Cargill, CN’s Cogema ferry boat and the FA Gauthier passenger ferry and terminal. Baie-Comeau really represents a large hub for Quebec. We are the fourth most important port in the province after Sept-Iles, Montreal and Quebec City – so Baie-Comeau is not a small place. Because it sits on deep water, the port zone is also strategic: Cargill can bring material via Panamax-size or Handymax-size vessels, for example, and there are not a lot of places in Quebec that can host such vessels. We can also bring 25,000-tonne Lakers from the Great Lakes that can ship directly to Europe, which is an important advantage to any industry that needs to access global markets via maritime shipping lanes.

Going forward, there is a commercial corridor being considered via rail from central Canada to the Atlantic, and Baie-Comeau could be an important gateway to export natural resources to the world. We recently hosted the port of Rotterdam at Baie-Comeau as part of the effort that has been ongoing since 2021 to create a commercial corridor to Europe. Rotterdam is one of the most important ports in the world and the largest in Europe in terms of volume, so this could bring important opportunities for companies shipping from Canada.

Baie-Comeau is on a growth trajectory? Where does Northern Graphite fit into this?

Baie-Comeau’s population has lost a few thousand people over the last twenty years as some industry moved away, but this presents an opportunity for the city and for companies like Northern because we want to develop new businesses like their BAM project. We have the infrastructure in place, the schools and the hospitals to serve a lot more people; we have room to grow now. If we are able to attract a project like Northern’s BAM plant, the infrastructure costs would be very low.

Why is Baie-Comeau a good fit for Northern Graphite and why would Northern Graphite and its BAM plant be a good fit for Baie-Comeau?

Let’s consider first that Baie-Comeau is no stranger to graphite, and actually had its first experience with it in 2002 with the Lac Gueret discovery, so Baie-Comeau has had an eye on getting involved in the graphite sector for quite some time. We’ve had a real interest in the sector since about 2015, when we started hearing about batteries, the EV sector, gigafactories and the battery anode material that goes into lithium-ion batteries, where graphite is the largest critical mineral component. The timing of Northern’s proposed plant is perfect because we are ready to work on that kind of development project. We see the opportunity in the sector. We have the infrastructure, the power lines, and all the requirements that these kinds of huge projects need to be equipped with and to be able to grow in Quebec. The sector is also one of the priorities for the region and the country and we want to be involved. We think that these kinds of projects have a better chance of success in regions like ours that can offer the infrastructure, not just the physical power lines and port, but also the kind of culture where there is open dialogue with every part of the community.

From the provincial perspective, let’s remember that Quebec has been a champion of the green revolution, with support of the automotive sector and for giga factories, but mostly on the cathode side of the lithium-ion battery. On the anode side, where graphite is by far the largest critical mineral component, there is still more that they can do given how strategic the battery sector is to the province’s ambitions to find ways to deepen its transition efforts and bring down its dependence on fossil fuels. Supporting the anode side of lithium-ion production is a win/win for the province, and Northern’s project represents a significant opportunity.

What is the checklist that Baie-Comeau ticks for Northern and what are the challenges?

Northern already has land selected and reserved by the city to build its facility. What it needs now is to secure the power in Quebec to run it. In theory, this is an easy box to check because the Baie-Comeau area already produces about a third of the province’s power via Hydro-Quebec. The Manicouagan power complex is huge. We produce nearly 12,000 MW of Hydro Power on the North Shore, and there is a lot of infrastructure running this power through the territory. We also have the right connections, with lines delivering in 315kv, 161kv and 69kv, so we have different options for companies to be able to access power at all levels; Baie-Comeau is very well equipped to handle industrial projects.

In order to be eligible for power, any project also has to sync with Quebec’s decarbonization goals, which are in keeping with the Paris Accord and include reducing greenhouse gas emissions by 37.5% from the levels of the 1990s. We need help on that side, and the battery and electric vehicle sector could be a part of the solution. The Manicouagan region is already a host to a UNESCO world biosphere reserve, so it is sustainable development oriented, and there is continuous dialogue with the community. The final criterion is economic benefit to the region, and here Northern’s project has clear advantages with its potential to create 600 jobs in its first phase alone.

What are the main challenges to building a BAM plant in Baie-Comeau?

There are two main challenges, energy and labor, but these are the same challenges facing most large industry in the region and in Canada for that matter.

Building a BAM plant in Baie-Comeau is going to require a lot of labor and right now, as more people are retiring than joining the workforce, we have a deficit of skilled labor; for every one person retiring, only 0.83 people are finishing technical school, so we have a gap, and this gap will be there until 2028. It’s a broader issue for Canada and its population and demographics, but it’s not without its solutions. We have three years before the BAM plant will be in operation and that gives us time to train people with the right skills and to be innovative and attract people and new families to the region. The City of Baie-Comeau is already making progress in attracting new people and developing the housing to accommodate them. We are going to be ready.

What about power? It was in the news recently that Northern did not receive a power allocation from the province.

Yes, that’s true, but from my perspective the project remains a strong candidate. Note that in its communications around power allocations, the government says it has now shifted to looking at projects on a case-by-case basis, and that announcements will come as projects become ready. That is good news for me.

In my view, Northern is in the right location and in the right sector, and there is an important need to support the anode side for the automobile industry; we are in a good spot that will be prioritized by government. It’s a question of time now, and I think there will be good news from the government in the not so distant future.

If you had a crystal ball, would you envision Baie-Comeau achieving a BAM plant?

Absolutely. I know that we have some challenges, but there is no success that does not come without challenges. We have great potential for greenfield as well as brownfield development opportunities. Baie-Comeau is one of the few places remaining in Quebec where you can have access to sufficient space and infrastructure for a unique project like the one that Northern Graphite is proposing.

Perspectives is researched, written and produced by Northern Graphite.