CVW CleanTech is a company that specializes in developing and implementing technologies for extracting valuable minerals and hydrocarbons from oil sands tailings in an environmentally sustainable manner.
Akshay, your company was founded in 2005 under a different name, Titanium Corporation. Could you tell us about its history and evolution?
The company was formed primarily with a focus on exploring for titanium in Canada. Initially, the company had an asset on the East Coast, aiming to recover titanium from a riverbed. During this time, the Company discovered that Canada has one of the largest titanium resources globally within the oil sands. One of the original visionaries of the oil sands even dreamed of recovering titanium alongside oil from these sands. The main challenge was figuring out how to recover that titanium efficiently.
The original focus was on extracting these minerals from the oil sand mining tailings ponds, which are essentially the waste byproducts of the oil sands mining process. The heavy minerals settle at the start of the tailings ponds, forming a beach area. The idea was to access this beach, put the minerals through a separation process, and recover not only titanium but also zircon. The company’s initial pilot phase started around 2005-2006, but feedback from operators highlighted environmental sensitivity and stability concerns with disturbing the settled tailings. Thus, the focus shifted to recovering minerals from fresh tailings, which presented fewer environmental risks and provided cleaner material for the tailings ponds.
Why are fresh tailings less environmentally dangerous?
Once a dam settles, moving the material around can lead to additional operating risks. Once the material is settled, operators prefer not to disturb it to avoid these risks. Fresh tailings, however, have not settled and moving them does not present the same risk. Additionally, the waste material that comes out of the CVW™ process from fresh tailings is cleaner and better suited for end of life remediation, making the recovery process safer and more environmentally friendly.
Furthermore, the recovery of incremental bitumen and solvent currently lost to tailings ponds and that operators have not been able to recover aligns more directly with their core business interests. This led to the development of a process to clean the sand of hydrocarbons (bitumen and solvent), enabling the recovery of both minerals and hydrocarbons. The company piloted this integrated approach from 2010 to 2014, leading to 21 patents and significant technological advancements.
Is it fair to say that presently CVW CleanTech, in addition to the initial economic objective, has an environmental ambition, reflected in its current name?
Yes, the environmental objectives have been integral since the piloting days. Kevin Moran, our Chief Technology Officer who joined from Syncrude, was motivated by the industry's potential to improve environmental management. The opportunity to reprocess tailings not only provided economic value but also left the tailings in a much better state environmentally. Benefits such as emissions reduction became apparent through testing and piloting.
The core business has always aimed to create economic value from waste while improving environmental management. Over the last 15 years, this focus has intensified, including emissions (particularly, methane) reduction, tailings management, and improving the management of NORMS (naturally occurring radioactive materials) and pyrite. This environmental drive was partly inspired by incidents like a highly publicized event regarding bird deaths on a Syncrude tailings pond, which led to federal inquiries and prompted improvements in environmental management within the industry.
How can big oil and gas extraction companies be incentivized to adopt technologies like yours?
Recently, there has been a strong push towards ESG from investors, resulting in certain funds excluding oil and gas companies. This has lowered the valuations of these companies, leading them to prioritize higher cash returns to shareholders to improve valuations. In the last 24 months, the three oil sands mining operators have returned $41 billion in cash to shareholders, boosting their share prices significantly.
However, for sustainable valuation increases, oil companies need to show improvements in environmental and social metrics. Investing in technologies that enhance operations environmentally and socially while driving economic value is key. Unlike carbon capture and storage, which does not create economic value, our technology reduces carbon intensity and absolute emissions while recovering valuable bitumen, solvent, and critical minerals. This approach delivers economic returns, cost savings, and improved environmental performance, providing a compelling incentive for adoption by operators.
But why have oil sands operators been reticent to adopt new technologies like yours, which can offer profit for them? Is it merely a lack of information, or do you think government incentives are needed?
It requires more stakeholder engagement to get operators on board. These companies are very focused on returning cash to shareholders, so they are cautious about spending capital on new projects. There has not been much new technology deployment recently because oil sands operators are risk-averse due to past cost overruns that have reduced shareholder returns. They need a framework of incentives to mitigate the initial risk and substantial capital investment.
Over the last 12 months, we have developed a financial model that significantly reduces this risk. Our previous technology required over a billion dollars in capital with a return of around 17-18%, which was not very attractive. We have now created a phased approach with a project cost of $400 million and a higher return of around 30%. This new model focuses on hydrocarbon revenue, GHG emissions reduction, and operational cost savings—core interests of the operators. We have also secured support from financial institutions for debt financing and are actively engaged with the government for additional incentives. This approach is economically compelling and aligns with environmental goals.
This refocusing of the company's strategy has happened over the last year?
Yes, this strategy has evolved over the last 12 months. I presented it to our board in April of last year. We realized the need to refocus our project on aspects that operators care about, specifically hydrocarbon recoveries, emissions reduction, and cost savings, rather than the minerals revenue, which they are less familiar with.
By reducing the project's capital cost and increasing its return, we have made our technology more appealing. Additionally, we are only asking operators to invest $80 million initially, with us matching that equity investment. We have secured debt financing and are in discussions with the government for incentives. This strategy ensures the first project is economically attractive and de-risks further deployments, making it a viable business decision alongside being an ESG decision.
What can you tell us about your exciting new partnership?
A key part of our strategy has been engaging with Indigenous communities directly affected by the oil sands operations, particularly in the Treaty 8 region around Fort McKay. This area is home to various Indigenous communities and the Athabasca River, a vital water source for both the communities and the oil sands operations. We have taken a proactive approach to building relationships with these communities to earn our license to operate.
We are excited to announce the signing of a non-binding framework agreement with four First Nation and Métis communities from the Regional Municipality of Wood Buffalo.
Since September of last year, we have engaged directly with communities in the region. As part of this process, we introduced them to our technology and discussed opportunities for them to become partners in its deployment. We are honored that these four Indigenous communities decided to partner with us, and are excited to make positive steps towards reconciliation through the implementation of our tailings reprocessing technology.
This agreement would allow communities to play an active role in improving environmental performance and receive direct economic benefits, including equity ownership in the project. This approach not only addresses environmental concerns but also provides long-term economic opportunities, diversifying their reliance on oil prices and creating generational wealth.
What are some of the benefits for Indigenous communities partnering with you?
The Indigenous communities see significant benefits in partnering with us. First, our technology addresses key environmental concerns, such as reducing VOC (volatile organic compounds) emissions by over 90%, which is critical for health and safety. This reduction in emissions directly benefits the communities and the environment they live in. We also provide a pathway from tailings ponds use and the reduction of naphthenic acid generation in current ponds – both of which make a significant improvement to the local environment.
Additionally, the partnership offers economic benefits beyond traditional impact agreements. By gaining direct equity ownership in the project, communities can achieve generational wealth. This partnership also presents a diversification opportunity, as the technology can produce a significant portion of the world's zircon and titanium from waste, reducing reliance on fluctuating oil prices. This collaboration is viewed as a major opportunity to improve environmental management and create sustainable economic growth.
