Front Burner - Is Canadian aluminum being green-washed?

Episode Date: April 4, 2024

In the last year alone, the Canadian government has poured billions of dollars into the electric vehicle industry. Wrapped up in that is the production of aluminum, a lightweight and recyclable material that EV car manufacturers want.In Quebec, aluminum is big business. Rio Tinto, one of the largest manufacturers of aluminum in the world, has several plants there. It often advertises the product as green.But a new investigation by Radio-Canada’s Enquête calls that into question.Investigative producer Gil Shochat is here to talk about how it’s brought to light the environmental cost of this industry in Quebec, and deep into the Amazon.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Jamie Poisson. In the last year, the Canadian government has been pouring billions of dollars into the electric vehicle industry. We're extending the program of up to $5,000 to help people buy electric vehicles. By 2026, the government wants 20% of all new cars sold to be zero emission.

That ramps up to 60% by 2030 and 100% by 2035. It's the size of more than 300 football fields and set to be the site of Canada's newest electric vehicle battery plant. This facility will be able to produce batteries for a million electric vehicles a year. Wrapped up in that is the production of aluminum, a strong, lightweight, fully recyclable metal that EV car manufacturers need. In Quebec, aluminum is big business. Rio Tinto, one of the biggest manufacturers of aluminum in the world, has several plants in the Saguenay region. It's often advertised as green aluminum and sometimes called the greenest in the world. But a new investigation from my colleagues at Radio-Canada's Enquete calls that into question,

not just in Quebec, but deep in the Amazon too. My colleague Gil Shohat is here to talk about it. Gil, hi, thank you very much for coming on to the show. Hi, thanks for having me. So I hinted at it there, but why is aluminum so sought after right now? So aluminum's become a really big deal in the last few years. By 2030, aluminum demand worldwide is expected to go up by 40%. And it's like you said, electric car manufacturers really, really want say, it needs to be light to use less energy. So electric vehicles are using a lot more aluminum. It's also being used in solar panels a lot, and we're producing a lot more solar panels these days. So Rio Tinto is a major player in aluminum production, and I understand they have four aluminum smelters in Quebec. And what place does the company have in the province's economy? Just paint me a bit of a picture here of how big of a player they are. Yeah, I mean, Rio Tinto is a big deal. Like just to back up for a second,

aluminum production is the second biggest industry in Quebec after aerospace. I think it's something like $7.1 billion in exports. So it's big. And Rio Tinto is the biggest player in that. They're a big operator in a region called the Saguenay, which is sort of in the heart of Quebec. Historically, they've been there about 100 years now. Them and their predecessor, Alcan, that they bought out in 2007 has been there for about 100 years. And they're really implanted in that region, and they're a huge economic driver there. And the company, and the province too, I've seen has been pushing this idea of a green aluminum industry in Quebec. And just tell me a little bit more about what it means to be a green aluminum producer and that push more generally. That's interesting because Quebec historically, obviously it's one of the powerhouses for hydroelectricity worldwide. It produces

a lot of hydro. Historically, it was produced very cheaply. It was considered almost too cheap to meter. And that's part of the reason that the aluminum industry set up shop here. Aluminum is a voracious energy eater. You need a lot of energy to make a ton of aluminum. And hydro is cheap. It's plentiful here. And it's relatively clean. And so the industry has said, especially over the last 15 years or so, they've called it green aluminum.

They've called it durable aluminum because of this hydroelectricity compared to places like China where they use coal to make aluminum. Yeah, it is cleaner than using coal for sure. Given that, I think that brings us to why we're talking to you today. And I think the question is, how green is this company actually? And what are the company's environmental practices like? And you just spent quite a bit of time looking into this, right? We did, yeah. The company has been criticized for a long time for not investing in modernizing its plants, its equipment. And it does so, but you know, the critics say it does so fairly late, late in the game.

For example, they have one plant called the Arvita plant, which historically has been an old and very polluting plant. And that's only being fully modernized in 2028. Critics have been calling for that to be modernized for a long time. And so while they sort of tout their green bona fides, what we found is they are amongst, they, I believe, are the third biggest polluter by fines in the province. They got fined $2.1 million over the last 15 years. Their CO2 emissions, they're still a major, major, even though they use hydro, you still need fossil fuels to make aluminum. And they're still a major emitter of fossil fuels. And what we found was since 2007, the amount of CO2 that the company releases when it produces aluminum has not really gone down. It's gone down

a little bit, but not significantly, not in any way that you would think a company that it touts itself as green, et cetera, would have. You know, I saw in your piece talk of chemical spills without disclosure. Tell me more about that. We filed a Freedom of Information Act request for the infractions and citations over the last 15 years. We received over a hundred of them. What we found as part of that is numerous instances of fines and citations over the last 15 years. We received over 100 of them. What we found as part of that is numerous instances of fines or citations for not reporting spills, for not reporting spills in a timely manner, for not working with local regulators, not necessarily letting them on the sites freely. There were numerous, a few instances of that that we found. And yeah, it was surprising. I mean, I was surprised by that for sure.

Some of the anecdotes, if you will, were corroborated by somebody we spoke with, a whistleblower. And tell me more about that. What did the whistleblower tell you? And tell me more about that. What did the whistleblower tell you? We did not reveal his identity to protect him. But he basically said, you know, spills happen. We cover them up. We use gravel to sometimes cover up spills. All the talk about environmentalism and how green the aluminum is, really, according to him, he said, it's a smoke screen. We hide things all the time and sweep them under the rug.

It will take time to see all the things that are hidden, but it's starting to come out. And he said, you know, the company does cost-benefit analysis, and it's only the severity of the fine that can make the company react. So the bigger the fine. Essentially, it would have to be worth it. Exactly. I imagine Rio Tinto has responded to the accusations from this whistleblower and some of the other findings from your reporting. And so what have they had to say about all of this? Yeah. So Rio Tinto basically said that they did not recognize themselves in this report. Especially in terms of the whistleblower, in terms of covering spills up or not necessarily reporting

or having or being lax, they said, it's not our values. It's not how we behave. You know, they talk about their 4,300 employees being concerned about the legacy that they will leave for their children. They say the company acts with a strict culture of environmental compliance, which includes reporting spills to the competent authorities. If an incident occurs, it's thoroughly investigated, corrective measures are put in place to prevent it from recurring. And they basically, you know, they deny that this was that laxity or environmental noncompliance plays any part of their culture or their internal way of doing things. You mentioned earlier there was criticisms over like a lack of modernization. What does that mean? What could one do to be more green around producing aluminum by implementing new technology? Yeah, there's a technology called AP60, which

without getting into the technical details, emits a lot less CO2 into the atmosphere and is a more sort of efficient way of making aluminum. The company has been called out for dragging its feet and only waiting till quite recently to make announcements for investments, et cetera. And what's interesting is that it's about incentive structures, right? We interviewed a professor who studied the industry, who studied Rio Tinto. And what she told us is that in 2007, the government put in a carbon levy, a cost on carbon that now we're seeing across the country. But that was first instituted in Quebec. They put a price on carbon.

And the industry actually got an exemption in 2007. And they still don't pay for carbon uh here and that's when you saw that talk about durable aluminum eventually green aluminum that's when it all started because according to what she told us is they tried to sort of build up uh the importance of green aluminum and say hey we're doing things the right way we're're using renewable energy. And they use that basically as a way to kind of prop up their green bona fides. But ultimately, what it did was what their purpose was, according to her study, is that it protected them, it kept them from paying this carbon levy till today, they still don't pay it. That's really interesting. Yeah, and they could still say we're making a green product. But what that did was the incentive structure to lower CO2 ultimately was not there because there wasn't a huge cost for putting CO2 into the environment. In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem.

Brought to you in part by National Angel Capital Organization. Empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years. I've talked to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo, 50%. That's because money is confusing.

In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Couples. financial vision together. To listen to this podcast, just search for Money for Cops. This story actually goes beyond the borders of Quebec. And I know you didn't just look at aluminum production in Quebec. You actually went to a mine in the Amazon that Rio Tinto partially owns, a mine where they get some of their bauxite from. And bauxite ore is the world's main source of aluminum. You need a lot of it to make aluminum, right? And take me to the mind. Bauxite has this really distinct dark red color, right? Like what was it like when you went there? It's quite remote. There's no roads around there. It's all small villages mostly. There's a few towns hours away, but you basically get around

by boat. And it's very green, as you can imagine. I mean, this is the Amazon. There's a few towns hours away, but you basically get around by boat. And it's very green, as you can imagine. I mean, this is the Amazon. There's just trees as far as the eye can see and rivers. But you get to the mine and the mine MRN actually took us around. And it's like another world. The roads are deep red. Then you get to the actual mining area and it's just at the edge of it, you see the rainforest, but just for, you know, pretty much as far as the eye can see, there's just

bulldozers just putting earth in these massive trucks. It's just this highly developed, very industrialized area in a part of the amazon where there's very little of that yeah that must have been such a fascinating trip um i'll just note you mentioned mrn that's the company that's like in charge of that mine in the amazon i know um there are people that live near the mine right many of them are part of the settlements called Quilombos. They're founded by former slaves. And just like, what did they have to tell you about this mine? Yeah, so the Quilomboa community is really interesting. They were sort of a people that had escaped slavery, which was very prevalent in Brazil in the 19th century. And effectively, they set up in these very remote parts of the jungle where they would be able to maintain their freedom. He's a local chief on a lake called Lake Batata, a village chief.

And, you know, that lake between 1979 and 89, the company dumped, I believe it was 18 million cubic meters of bauxite directly into the lake. And he said, you know, we worry about the fish we eat. We worry about the water we drink. Yes, we continue to fish. We fish because there's no other place. This is the way. So we eat the fish from here. Look, it causes us a lot of sadness to look at all this mud here and the way it is now. It causes us a lot of sadness to look at all this mud here and the way it is now. The water flows and then we fish and drink from it. And then we start thinking about what that will do to our gut. He told us about, you know, half the people that live around the lake still don't have clean filtered well water.

And that's, you know, 40 years after they started dumping bauxite into this lake. That ended in 1989. And, you know, since then, the company has done some, you know, some restoration work. But the bauxite's still there. It's still at the bottom of that lake in parts of it. And you see it. It's like this deep colored red mud that's there. Do we know for sure about the possible or the impact of like bauxite on a person's health? So there haven't been a lot of large public health peer-reviewed studies out in the literature.

At least we couldn't find many. But we do know that it has been known that when you make bauxite, you got to wash out the earth. And that can release heavy metals such as lead, arsenic, mercury. And so there's real questions there. mercury. And so there's real questions there. We talked to a local prosecutor, one by the name of Lillian Braga, and she talks about, you know, people being worried about, for example, mercury being released into the water from this, from this operation. Claiming that your product is green is very serious.

It's very serious because bauxite mining devastates the forest. So how can you claim it's green? It removes the soil. So how can you claim it's green? The supply chain process is a huge concern for us here in the Amazon because of mercury contamination, which leads to pregnant women giving birth to sick babies. It poisons the fish that we eat and contaminates the water. This is serious.

Again, making a causal connection because there haven't been a lot of studies is hard and the science isn't there yet, but people locally definitely worry about it. And she says, you know, mercury ending up in women's uteruses and giving birth with mercury as part of that system, as part of their sort of, the baby's biology, that's a fear that local people

definitely have. And mining is a major worry in that part of the Amazon. The feeling we're left with is one of being a nation continually exploited and colonized, where our most valuable resources are extracted to improve the lives of people elsewhere, not within our own borders.

No, electric vehicles won't be made for us. We remain outsiders. We've endured many centuries marked by recurrent colonialist practices. They may change names and gain new meanings, but ultimately, the people on the Amazon continue to be exploited, just as they have for centuries. You know, Brazil is one of those places, especially up in the Amazon, the state is not, state institutions are not as strong as say they are in Canada or the US or Western Europe. It's different. So it's one of those places that, you know, you definitely still need studies and work done on issues such as that. And you mentioned before that the company in charge of the mine, MRN, they've done a bunch of things to kind of address these health concerns.

And they say that their waste management system is absolutely safe. Yeah. So they say, we interviewed the head of the mine, the guy in charge of sustainability. He said he'd eat the fish from anywhere in the area. He has no problem with it. They say they don't have, their data doesn't show any problems with water quality. Today, the mine has around 250 stations that monitor the water and air quality as well as noise. And all these stations show that there is no contamination. The data is all recorded.

We listen and deal with every complaint and propose and offer solutions. They closely monitor dam stability and they invest in, and Rio Tinto also told us, they invest in health education. They do a lot of work on reforestation and they basically say, look, we're doing as good a job as we can managing this, making sure everything's safe, making sure local people have what they need to to live, you know, normal lives, essentially. And they really they really say they're focused on that. You know, we've been talking about health concerns in the Amazon around this industry, but there are also health concerns in Quebec, right? There's been a lot of pushback from people who live close to those smelters. And just tell me briefly about the kind of concerns that you've heard there. Yeah. So in Quebec, we've had, there's been a few high profile cases over the years of, for example, the snow turning red in winter because there was, you know, stuff came out of

the smelter that should have been filtered out. And so the snow in the neighborhoods around it turns red. There was an incident years ago of the Saguenay, the big river right next to the industrial site turning red because there was a leak. And I mean, these are dramatic examples, but basically the people living around the site really worry about all the heavy metals, all the stuff that could potentially go into the air. And that's a real health concern for those people. We're talking about cadmium, mercury, lead, arsenic, nickel, silver, cobalt, manganese, strontium and uranium. I've skipped a few. There are 14 substances in total.

So how do you expect us to not be worried about what's in there? You know, listening to you today, I can't help but think that there's a real disconnect here, like on the one hand, you have this industry that is growing largely because of electric vehicles and, you know, to a lesser extent, solar panels. And it's, you know, billed as a key part of achieving Canada's climate goals. It's billed as green and forward thinking. And then, you know, you hear these stories about the people who are affected and the environment that is being impacted. And it's hard to kind of reconcile these two things. And how do you see it? Yeah, I mean, for me, it's really a question of are we creating to build

a green economy? Are we creating sacrifice zones in various places, be it in Quebec, be it in the Amazon, to make this green economy go? I mean, I just think we need to be conscious of the fact that there's a cost to everything. Even making something green, there's a cost to it. And we need to spend the money to make it as least impactful on the local people, on the environment as we can. Rio Tinto and MRN say they're doing that, say they've changed their ways, say they've improved the way they're doing things in the last few years. But it's one of those things where time will tell. But, you know, it's one of those things where time will tell.

Is this actually going to be green from start to finish? From the moment the bauxite comes out of the ground to the tinfoil you use or the electric car that you drive? Will it be that way? Because right now there are no laws that say that, in Canada at least, that say that the entire supply chain has to be green in order for you to call something green and ecological. Gil, this is really interesting. Thank you so much for coming by. It was great. Thanks for having me. All right, that's all for today. I'm Jamie Poisson. Talk to you tomorrow.