Feds, province to contribute up to $272M toward proposed Manitoba silica sand mining, processing

Posted on September 19, 2024 by Peggy

An Alberta company that wants to mine silica sand and process it into solar panel glass in Manitoba says it has secured letters of intent from the federal and provincial governments to contribute grants and loans, and conduct infrastructure work that will cover almost a third of the project’s start-up costs.

Canadian Premium Sand, which received a provincial environmental licence to extract and process sand in February, announced Wednesday that Ottawa and Manitoba intend to contribute up to $272 million toward the $880-million project.

The publicly traded Calgary-based company plans to mine the sand at a surface quarry at Hollow Water First Nation, on the east side of Lake Winnipeg, and process it into glass at a 50,000-square-foot manufacturing facility in Selkirk.

The federal government intends to provide $100 million worth of grants toward the project and up to $100 million worth of loan guarantees to First Nations interested in investing in the project, CEO Glenn Leroux said.

The provincial government intends to contribute $40 million worth of loans and build a $32-million road from Provincial Road 304, near Manigotagan, to Hollow Water, he said.

Leroux said his company must now raise the rest of the capital it needs to complete the project.

“When these levels of government offer this type of support it is always going to be conditional, and the key condition on any of this is that we raise the rest of the money,” Leroux said via Zoom from Calgary.

“We make this a real project, and then the funds will be unlocked.”

Canadian Premium Sand intends to mine silica seven months of the year at Hollow Water, but process sand at its Selkirk facility year-round, he said.

The plan is to process 800 tonnes a day, he said.

The company had previously worked to develop a sand quarry in the province to be used in hydraulic fracturing during the production of oil and natural gas in Western Canada, but a historic plunge of oil prices in 2020 forced it to rethink its business plan and focus instead on using its sand to produce solar panels.

Demand for solar panel-quality silica sand, which has a low iron content, is undergoing “explosive growth” as the demand for solar energy increases, Leroux said.

“There isn’t any of this glass made in North America. None. All of the glass for solar panels right now comes from China or Chinese-controlled Asia-Pacific countries,” he said.

‘A significant project for North America’: minister

Jamie Moses, Manitoba’s economic development minister, said the province is supporting the project for its strategic, economic and environmental benefits.

“This would be a significant project for North America, and we’re excited it would be here in Manitoba,” he said in an interview in his office at the Manitoba Legislative Building.

The federal government did not respond to a request for comment before publication.

Leroux said once construction is complete, the plant will employ approximately 250 people in Selkirk and 20 at Hollow Water, both at the quarry and as the drivers of the trucks that will transport the sand between the two communities.

Selkirk chief administrative officer Duane Nicol said the glass-processing facility would become the second-largest employer in the city north of Winnipeg, after its 110-year-old steel mill.

A man wearing a shirt and tie is standing outside on a sunny day, with trees in the background. — Selkirk CAO Duane Nicol said the proposed glass-processing facility would be the largest private investment in the city’s history. (CBC)

“To put this in perspective, this is the largest single private investment in our city’s history,” Nicol said of the sand-processing plant.

The federal and provincial funding commitments make the completion of the project more likely, he said, noting more public funds are being spent on green-economy projects south of the border.

“With the amount of money that’s being thrown at American firms in the States, this puts us on kind of equal footing,” Nicol said.

Leroux said the loan guarantees Ottawa intends to offer First Nations will make it easier for nations such as Hollow Water “to have an ownership stake in a project that’s on their lands.”

Hollow Water Chief Larry Barker was not available to comment on Wednesday, according to staff at the band office.

Leroux said the furnace at the processing plant in Selkirk will run on natural gas, but other processes will utilize hydro electricity. The energy demands are too high to rely on solar power, he said, adding he would like to offset some of the hydro use with solar panels.

Few similarities with rejected Sio Silica plan: CEO

Leroux said his project has few similarities with a plan by Alberta company Sio Silica’s to extract sand from further below the surface of southeastern Manitoba using wells. He compared the quarry planned for Hollow Water to a gravel pit.

“It’s very close to the surface. We just take the soil off and and start removing the sand,” he said, adding that silica then gets sized, washed and scrubbed, and then exposed to magnets that reduce the iron content to less than 100 parts per million.

The provincial government denied the Sio Silica project an environmental licence in February.

Sio Silica CEO Feisal Somji declined to comment this week on the provincial support for the Canadian Premium Sand project.

There remains some opposition to Leroux’s project.

Eric Reder, the Manitoba director of the Wilderness Committee, said the announcement of intended federal and provincial financial contributions is premature considering Canadian Premium Sand has yet to satisfy all the conditions of its environmental licence.