Supporter Spotlight: Trent Mell - November 2021

Supporter Spotlight” features Canadians with a passion for Canada’s Natural Resource sector.  Our spotlight this month is Trent Mell, President and CEO of First Cobalt, a Canadian-based Cobalt company. Trent talks to us about the electric vehicle revolution and the importance of mining for our communities, economy and environment.

Supporter Spotlight November 2021 - Trent Mell First Cobalt-01

Canada Action: Trent, thank you so much for taking the time today. Your mining career includes development and operations with many mining companies. You are currently the President and CEO of First Cobalt, a Canadian-based mining company. How did you get into mining?

Trent: Well certainly not by design! In my case I got into it just by virtue of a fortunate series of events. I used to practice law on Bay Street with one of the big firms and by virtue of that, as a big Canadian law firm, you end up doing a lot of resource work.

In Toronto of course that would be mining. And as a result of that, I got a bit of the bug and one day unannounced and unexpectedly I received a call from a recruiter asking me if I would be interested in joining Barrick Gold. So I joined Barrick as Counsel and that started me down that path.

I went in as Counsel and then I joined Sherritt and American Palladium after that… And at that point, I decided to do the MBA because I was enjoying the business side of it a little bit more. I then joined Aurico as Executive VP and afterwards went into the junior mining space!

Doors open up if you keep an open mind and work hard! Now I'm not just doing the mining but I got an eye on the final product and I'm not only an advocate for the resource sector but also for what I call the EV revolution (electrical vehicle revolution).

Canada Action: Cobalt is a multi-faceted mineral: not only is it responsible for giving that distinctive deep blue color to glass, ceramics, inks, paints and varnishes, but most importantly, it is a critical mineral. That means it is a part of a list of minerals that are considered to be the building blocks for a clean, low-carbon, and digitized economy. Essential for renewable energy and clean technology applications like batteries, permanent magnets, solar panels and wind turbines, they are also required inputs for advanced manufacturing supply chains, including defense and security technologies, consumer electronics, agriculture, medical applications and critical infrastructure. How important is mining when we talk about a green future?

Trent: When you look at cobalt you have two categories. You have the alloy market and then we go to a clean future. So you're taking cobalt in a chemical form, or in a salt as they sometimes call it, and the final product is cobalt sulphate.

You take that cobalt sulphate and you’re putting it into a battery and that impacts everything from our phones and laptops to of course electric vehicles and drones - anything portable that requires power. Cobalt is important because it protects the integrity of the battery in a couple of ways. But the importance from the mining perspective is scarcity.

The demand profile for cobalt over the past decade has dramatically changed because until Sony invented the rechargeable battery that was an application that didn’t exist. More than 50% of the global production of cobalt is going into the battery market. And because cobalt is hard to find geologically, it’s taken on a heightened importance as to how we’re going to get more to feed this next generation.

Canada Action: Cobalt looks set to become one of the most important commodities in delivering the electric vehicle revolution – thanks to rising demand for the metal in the batteries that power them. Benchmark Mineral Intelligence forecasts that cobalt demand will increase by 15 to 20 percent year-on-year, due to the battery sector. It is estimated that 85% of the world’s EV batteries will contain cobalt by 2030. In April's 2020 year-in-review, you said that First Cobalt is “on a path to become the most sustainable producer of cobalt in the world and the only company capable of supplying battery-grade cobalt to the North American electric vehicle market. The impact of producing cobalt sulfate at First Cobalt's Canadian refinery rather than the existing supply chain is the equivalent of taking more than 9,000 combustion engines off the road every year.” GM announced that it plans on reopening its Oshawa plant and also has a tentative deal to open up its Ingersoll plant in Ontario to make commercial electric vehicles. Have we reached the tipping point when it comes to electric vehicles? Is Canada set to be a global contender in EV production and potentially revive the auto sector which has been hit really hard in the past couple of years?

Trent: I think in Europe we’re at that tipping point. In the face of COVID in 2020 and with auto sales down 23% across the continent, electric vehicle sales more than doubled to a point where the European market was bigger than China.

Here in North America we’re not yet there but it's pretty darn close. So where we are now as a nation and as a continent is that we've come to a point with battery technology where auto manufacturers are starting to introduce longer-range and bigger vehicles.

So for example the Hummer is going to be an electric vehicle in a couple of years. The Ford F-150 is on its way. The Ford Mustang came to market. A lot of the earlier incarnations of EV’s were where China was the dominant market. Southern Europeans don't mind smaller vehicles but we're starting to see those big batteries. So with the bigger vehicles that we want to drive and longer ranges that North Americans come to expect, that’s going to happen and we're going to start to get choice. When I bought my Tesla there wasn't a lot of choice.

And so, is Canada there? I think the opportunity is there. But we have to seize that opportunity to bridge minds to EV’s. There’s that whole midstream in the supply chain that we don't yet have figured out in North America and we have to move fast or someone's going to pick that up.

Most of the cobalt consumed today is mined in the Democratic Republic of Congo and then shipped to China for refining, where 80% of battery-grade cobalt is produced.  North America is 100% reliant on imports of cobalt sulfate. There are no cobalt sulfate refining facilities operating in North America, which gives the First Cobalt Refinery a strategic advantage in the electric vehicle supply chain. Your refinery is intended to divert ethically sourced African mine production from China to North America and produce cobalt sulfate in Canada for use in the North American and European EV markets. We’ve seen an increase in the importance of ESG practices within all natural resource extraction in the past 5 years. Investors are increasing their focus on ESG issues and are more inclined to invest in companies that are employing leading ESG practices. How has this newfound focus changed the way we do things in Canada?

Trent: When I started mining 20 years ago we talked about CSR; Community, Social Responsibility - and health and safety of course. But when you talk about ESG (Environmental, Social & Governance), it's really not the same thing because it's not just about having a responsible operation.

Now we view resource extraction executives and crew as being stewards of the environment. What is your carbon footprint? What are you doing over the long-term to our natural environment? And that's been a real mind shift for me and how I view our role and how I view what was CSR and now ESG.

Sustainability has to be at the forefront of what we do. And as a human being and as a dad I take a lot of pride in that. But more importantly, when you start looking at the electric vehicle revolution and the suppliers, you're no longer just making a product at the lowest price and selling it on to the spot market.

You’re making a product and it has to be a quality product in all respects, both environmentally and the specification. And you're selling it to an end user and that end user has customers. Whether it be Apple, Samsung, Volkswagen or Tesla, the expectation of that buyer is that if I'm going to buy a zero-emission vehicle, what's the carbon footprint leading up to that?

So now as a result of the consumer and the brands that they're buying, there is a greater accountability for us to come clean with what our carbon footprint is and what our practices are. So where does Canada fit into this? Well! Really well! We've got the benefit of a very, very clean grid. In our case it's going to be one hundred percent powered by hydroelectricity and so right out of the gate we’re competing against a large number of Chinese base refiners that are on coal-powered electrical grid systems.

So our environmental footprint is going to be 50% lower than our Chinese peers straight out of the gate and then it's a number of attributes. We have the benefit of lots of water and a talent pool of labour and good mining experiences and best practices. So when you add that, Canada is a natural destination to play the leading role in the next wave of mining.

Canada Action: What does the future of mining look like? Are there any new technologies we can look forward to in mining?

Trent: I think there's a few things. Some of these are not particularly novel but if I look at our asset in Idaho for example, the Iron Creek project, it’s how do we minimize the amount of material that we're going to be bringing up from underground?

We’re sorting underground and leaving what we call waste in the mine so that you minimize your surface disturbance. We’re in steep topography and we have some beautiful mountains with salmon streams. If we can concentrate our material, maybe we build a mill in a nearby town rather than out in the wilderness. Is it going to be clean power and can we generate the power ourselves? And then when I go back to our refinery, every step of the way we always ask ourselves: “Can we do this better?”

Everything from energy-efficient light bulbs to the amount of water that is flowing through our plant and partnering with Indigenous communities. For example, we're going to do a plant study on herbal plants that may or may not be in the surrounding area to try to support the gathering of information and support that industry as well. You just need to approach everything with a very different lens. It’s just approaching your business in something other than the lowest cost of operation.

Canada Action: What are some of the challenges mining faces in the next 5-10 years?

The biggest issue to me is nimbyism. It’s this notion of “I want a clean environment but I don’t want mining.” And this is where you come in (Canada Action). It’s communicating this notion that if we want to meet our ambitions at the Paris Accord and we want to aim for carbon neutrality, you can't wave a magic wand. You have to mine. And we have to come to terms with the fact that mining is all around us but I think we have to be a little bit more front footed about it.

I think that the connections are more direct now and people can understand it more perhaps than they could when you were talking about wiring your home or plumbing coming into your house. There's a real opportunity and I think we have to become more vocal advocates of mining and mining in our own backyard to make it all work. Because if you accept mining but you don’t like it near you, now you’ve got raw materials that will navigate the world contributing in turn to a higher footprint, transport and a logistical cost.

Canada Action: Why do you think all Canadians should care about Canadian natural resource development?  Is there any kind of message that you want to tell Canadians reading this? 

Trent: These are long-term, good-paying jobs in communities that otherwise might face high unemployment. A lot of these jobs are definitely in the north but these are skilled jobs requiring technical training or university degrees so it's part of our economic development - the backbone for the country. It's also the biggest employer of Indigenous Canadians as well and so you look at what this means to these communities and we’ve seen some of the terrible stories about water and communities that are off grid, and substance abuse… And then when you can bring money, jobs, education and hope into the community, you transform the lives not only of the employees but of everybody around them. I’ve seen that and that to me is very rewarding.

I remember going to a mine opening and having somebody's spouse come up to me and say “You know this isn't just a job. This is a career for my spouse and my family”. It was a very impactful statement. This isn’t just a 3 or 4-year casual labour; it was a 15-year mine. We changed their lives and transformed the community. Now - if you're in the city reading this you can think “I’m an urbanite”.

Certainly, if you look at Calgary, Vancouver, Toronto and Montreal, the resource sector drives a lot of economic activity. A lot of white-collar jobs like law, finance, engineering and banking. There are billions upon billions of dollars that cross Bay Street day in and day out all related to mining.

So you strip that away and we're a very different-looking country. And as a country, the wealth of our nation will pale in comparison to where we are with a strong, vibrant resource sector. And that would include all resources; mining, oil & gas etc.

Canada Action: Is there anything else you would like to share with our readers?

Trent: I would say to the doubters on electrification mobility and the EV movement: blink and you're going to miss it. Europe transformed so fast in 2020. 300 billion dollars of money being deployed on the battery supply chain.

So that starts with mining and it works its way through to chemical processing and batteries and then to EV assembly. It’s just a massive ecosystem that is going to redefine the manufacturing heartlands for the auto world for decades to come.

So this is our moment as a country! We have to seize it! And if we don't act fast we're going to miss it and it’s going to migrate maybe to the US, certainly to Europe and Asia but I think with the push towards a cleaner environment in Canada, and this 2 trillion dollar plan that President Biden built, I think it really is the North American continent’s turn to step up and we need to be a part of that.

Canada Action: Trent it’s been a pleasure. Thank you so much for your time today.

Trent: Thank you!

This interview has been edited for length and clarity.

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