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The inaugural London Indaba on “Investing in resources and mining in Africa”, takes place on the 26 & 27 June 2023 at The InterContinental Park Lane London.
The 2023 London Indaba will focus on Africa’s critical role in the minerals and metals of the future; why the world needs more, not less mining; and why Africa is important to the future of mining and mining important to the future of Africa.
Programme highlights include:
- A keynote address by Nusrat Ghani MP, Minister of State at the Department for Business and Trade and Minister of State for the Investment Security Unit, United Kingdom, on the UK Government’s Critical Minerals Strategy.
- A fireside chat with Robert Friedland, Founder, Non-Executive Director and Chairman at Ivanhoe Mines.
- A keynote address by Simon Thompson, Senior Adviser, Rothschild & Co London and former Chairman, Rio Tinto, on how investing in critical minerals and metals is “different”.
- A keynote address by Rohitesh Dharwan, President and Chief Executive Officer, ICMM on whether mining can turn the energy transition into an economic transition for Africa.
A panel discussion on where funding for future mining in Africa is going to come from will be led by Dr Fiona Perrott-Humphrey, AIM Mining Research and Senior Adviser to Rothschild & Co. Mining Team, London, with Tom Attenborough, Head of International Business Development, Primary Markets, London Stock Exchange, George Cheveley, Portfolio Manager, Ninety One, Brian Menell, Chairman & Chief Executive Officer, TechMet Limited, and Paul Smith, Chairman, Trident Royalties and Partner, Voltaire Minerals.
To view the agenda, click here.
To register, please click here.
Last week’s London Mines and Money (sub-titled Resourcing for Tomorrow) had a specific focus – given the huge drive towards the energy transition, where will the resourcing come from to drive new supplies of the required metals?
Below are the relevant points for Junior Miners that I thought came through in some panel discussions.
At first glance, politically driven, near-term targets for shifts to green energy, electric vehicles and onshoring of supply chains look unrealistic. This is because of long lead times for permitting new mines, a dearth of funding for junior miners and considerable uncertainty around which technologies will best unlock the processing of critical metals.
Within that framework, however, there appear to be a number of opportunities for juniors…
- Mining companies will have to go to more challenging jurisdictions to access deposits of many of the so-called critical metals. This is where junior miners have typically been able to move more nimbly and assume higher political risk than lumbering majors.
- There is a growing focus on new exploration, both in under-explored geographic regions and for new metals sometimes found in smaller-size deposits that can fall below the scale of interest to majors.
- In theory, as the scale of what is needed for new supplies of critical metals is starting to be understood, more financing is becoming available to fund new mines. Principal new sources on the scene are governments (state and provincial all competing with one another) and potential downstream customers seeking to secure future metal supplies (in particular, automotive manufacturers)
- In practice, government funding outside of China is currently in the early stages of policy formation. It will likely be constrained by taxpayers’ caution and stringent ESG requirements around entire supply chains for critical or strategic metals. In addition, the issue was raised of shifting policy and regulatory frameworks as regular elections change the parties in power (including the US).
- A growing source of new funding is coming from the KSA, which has launched very ambitious plans for diversifying away from its current reliance on oil. Interest is focussed not only on developing its own and neighbouring mining assets but also the mid-stream processing capability and securing metal supplies globally.
- One panel highlighted alternative funding sources available to development juniors, including streaming and royalty funds, debt funds, and mining private equity funds. In theory, they should mesh together at different stages of project development.
- However, all these funders ultimately will seek an exit, and they emphasised that heightened ESG considerations in mining have made M&A much more challenging and can push up the project’s cost. It was also underlined that project developers need to consider ESG considerations even before they have proved up a resource, e.g., community issues and energy sources, to ensure future funding.
- One strong positive is that as major mining companies look to the future, they are discussing the need for a change in approach to juniors. They have expressed the aim of becoming more flexible in partnerships and funding, both of mining assets and of new technologies that could best unlock those ore bodies but are relatively untested at an economic scale.
In conclusion, lots to be excited about as a Junior Miner (as well as all the usual challenges) on the path to Resourcing for Tomorrow.
From Joburg Indaba 2022
A discussion on the international investment landscape and key issues facing miners over the coming decade.
Chair: Fiona Perrott-Humphrey, Senior Adviser, Mining Team, Global Advisory, Rothschild & Co. London.
Rick Rule, President and CEO, Rule Investment Media.
Henry Sanderson, Executive Editor, Benchmark Mineral Intelligence.
Sandy McGregor, Portfolio Manager, Allan Gray.
The 2022 Joburg Indaba is set to take place on 5th & 6th October. The event will be back at the Inanda Club, Sandton, while continuing to offer an online option for those unable to join in person.
This year will mark the 10th anniversary of the Joburg Mining Indaba, set up by Resources4Africa with the aim of providing a forum that truly addresses and debates the real issues facing the mining industry. It is clearly rooted in the southern African context, but this is a global industry – local operations are thus also informed by the seismic trends shaking the very foundations of how and where the industry will need to focus over the coming decades.
I will be chairing one of the sessions on day two of the conference.
The international investment landscape and key issues facing miners over the coming decade
Chair: Fiona Perrott-Humphrey, Senior Adviser, Mining Team, Global Advisory, Rothschild & Co. London
Rick Rule, President and CEO, Rule Investment Media
Henry Sanderson, Executive Editor, Benchmark Mineral Intelligence
Sandy McGregor, Portfolio Manager, Allan Gray
One of my panellists, Henry Sanderson, has recently published a fascinating and imminently readable book. It is titled “Volt Rush – The Winners and Losers in the Race to go Green”.
I don’t want to steal his thunder ahead of the Indaba by giving too much detail on the book but promise a full review after it is over. Suffice to say that anyone who believes that buying an electric vehicle makes the world a better place PER SE, will have their eyes opened to the reality of the supply chain that leads to that end product. And some of the spectrum of players involved – entrepreneurs, miners and governments!
As the strapline on the back of the book remarks “A greener world won’t come for free.“
The article below summarises a very interesting speech made by Steven Fox of Veracity Worldwide at the Cape Town Mining Indaba last week.
I would like to add a few more points of my own to the topic of the possible direct and indirect impacts that the Ukraine war could have on the broader mining sector.
- The immediate consequences of sharply rising inflation could be extremely challenging for the mining industry. This is not only in terms of cost pressures eroding margins but equally in the dangers of an impending global recession and what that could do to future commodity demand and pricing. The ripples from the war come at a time when the risks were already on the downside – governments raising interest rates to address cost pressures driven by pandemic related supply-chain disruptions and metal price spikes in perceived ‘critical metals’ needed for the energy transition. Add to this the recent economic fallout in huge commodity consumer China of its zero covid approaches, and you have the mining sector in the eye of a perfect storm. Some investors fear that management teams, and even possibly boards, are not being cautious enough in planning for this scenario.
- With commodities always designated in US$, the profitability of mining companies can depend as much on exchange rate moves as on product price moves. The financial and currency dislocations stemming from the war and related sanctions will make forecasting and management of exchange rates that much more complex. The danger with emerging markets, as ever, will be escalating interest bills as rates and the US$ value rise.
- Is there a danger that it hardens anti-western views amongst the loose BRIC’s country alliance? With possible implications for the iron ore sector, so key for earnings in the major diversified mining groups? We have already seen China impose ‘da facto sanctions” on Australian coal twelve months ago. Would they start to do the same with Australian iron ore?
- If the war escalates, and the divide continues between pro and anti-Russian camps, it may not only be investors who eschew those ‘backing’ Russia in various UN votes, but vital government aid programmes may come under review.
- The increased sophistication of the tracking of metal flows (helped by blockchain) has been another key development. Both investors and governments are already putting companies under pressure to ensure the ethical sourcing of supplies – not only in the diamond space. At the recent PGM’s Industry Day, the CEO of AngloPlats said that they have been getting all sorts of enquiries from people seeking to buy palladium as Russian metal had been sanctioned. But African producers must make sure that they do not get caught up in some kinds of ‘secondary’ sanctions if their governments are voluble backers of the Russian cause.
Other ESG developments – an increasingly nuanced debate as the pendulum swings back from the extreme ESG views of the last two years (when ESG funds in the US were overwhelmingly made up of tech stocks which have had a bad Q1 and some believe are in a cyclical downturn as interest rates rise, whereas Q1 saw a stellar performance from oil and coal stocks). It may be that the man in the street, followed by the politicians, starts to dictate even more powerfully on energy issues as supply chains disrupt and prices escalate. Could this mean less focus on green energy trends in the short term and more focus on the reliability of supply?!
Secondly, the role of aggressive metals trading companies has come under scrutiny in the recent past as they are seen to take advantage of some murky arbitrage plays (think the recent publication of “The World for Sale”). But will the taking advantage of supply disruptions rippling from the Ukraine invasion really stand up to scrutiny by the ESG investors? And, in fact, should they?
2022 PGMs Industry Day is not far away. Have you registered? This year you can attend in person or online. If you haven’t already booked your seat, make sure you register today to hear from the key players on both the demand and supply sides of the PGMs industry on the opportunities and challenges facing the sector.
International Speaker line-up
Chaired by Bernard Swanepoel, there’s a truly international speaker line-up from the major PGMs producers in South Africa, investors from Australia and the UK, industry analysts from the UK and end-users from Germany, Hong Kong, the UK and USA.
Furthermore, Fiona Perrott-Humphrey will be chairing a panel of investors giving their perspectives on the PGM’s industry and discussing “Has the global energy transition currently underway changed how investors view the SA-based PGMs’ industry?”
Session Three: Investors’ corner with Fiona Perrott-Humphrey.
Has the global energy transition currently underway changed how investors view the SA-based PGMs’ industry?
- As PGMs are some of the few critical metals not to be dominated by Chinese owners and processors, should Western governments and private funds be investing in them now?
- How can ESG-conscious investors square the circle of investing in what is a “green” metal but produced using coal-fired energy and facing significant HSE challenges?
- Should investors be buying PGM mining companies or companies further down the value chain?
- Should they bet on a future of EVs or the hydrogen economy, or both?
- Is the skills exodus from SA a threat to the industry’s ability to grasp the opportunities of the energy transition?
Chair: Dr Fiona Perrott-Humphrey, Senior Advisor, Mining Team, Global Advisory, Rothschild & Co. London
Brett Beatty, Partner, MD Australia, Investment Team Leader, Resources Capital Funds
Tal Lomnitzer, Senior Portfolio Manager, Janus Henderson
Brenton Saunders, Portfolio Manager, Pendal Group
We hope to see you there. Meanwhile, to view the full programme, please click here.
07/10/21 Joburg Indaba Day 2 Session 1.
Chaired by Fiona Perrott-Humphrey, Aim Mining Research, and Senior Adviser, Mining Team, Global Advisory, Rothschild & Co. London
– Brett Beatty, Partner and Head of Australia, Resource Capital Funds
– Olivia Markham, Managing Director, Natural Resources, BlackRock
– Mick McMullen, CEO, Metals Acquisition
- Are we in a super cycle or an “energy-spiked” cycle? What are the main drivers affecting the rising commodity prices, and how long will this last?
- What implications does this have for mining companies’ strategies and future growth?
- What are some of the risks of the current bull market, e.g., increased taxes/royalties, demands for increased wages, etc.?
- What are the potential rewards? Is now the time to make capital investments or exercise capital discipline?
- What are the prospects for mining given the Covid recovery strategies of the developed countries/regions and the current global impetus towards clean energy?
- How can South African mining companies ensure they take advantage of these opportunities?
The changing geopolitics: the new cold war for strategic minerals to fuel the energy transition
06/10/21 Joburg Indaba Day 1 Session 3.
Chaired by Fiona Perrott-Humphrey, Aim Mining Research, and Senior Adviser, Mining Team, Global Advisory, Rothschild & Co. London
– Brian Menell, Chairman and Chief Executive Officer TechMet Ltd
– Richard Williams, Executive Chairman, Bunker Hill Mining & Director Trevali Mining
– Stuart Brown, President, and CEO, Mountain Province Diamonds
- How is the energy transition changing the demand mix for mined products? Will the West be capable of pushing back China’s current domination of assets and refining in the strategic minerals space?
- How “green” is the processing of critical metals, and will this constrain supply?
- How can SA best position itself as a mining jurisdiction to participate in the energy transition?
- What specifically can an individual company do to mitigate the risk or seize the opportunities of the new scramble for resources?
Mining Magazine recently wrote an interesting article on permitting in the US. Read here – US ‘must streamline permitting’ – Mining Magazine
Following on from my blog post ‘Building a green and digital future is not without its contradictions‘, there is a very pertinent piece written by Sarah O’Connor from the Financial Times on the contradictions implicit in the push for “clean, green” energy. Read the article here
On 6th October, I am chairing a panel at the 2021 Joburg Indaba entitled “The changing geopolitics: the new “cold war” for strategic minerals to fuel the energy transition”.
There is increasingly a consensus amongst people from all walks of life and regions of the world that we must fight back against the effects of climate change. But, I would suggest there is significantly less understanding around the metals and minerals required to drive the new technologies. What are these metals, where are they found, how are they processed, and what are their applications?
Ahead of my panel, I can do no better than offer a few quotes from an insightful book by Guillaume Pitron entitled “THE RARE METALS WAR – the dark side of clean air and digital technologies”.
In his introduction, he points out some very significant trends (direct quotes from the book are shown in italics).
“The disruptive effects of fossil fuels on the climate since the turn of the current century have driven humanity to develop new and supposedly cleaner and more efficient inventions – wind turbines, solar panels, electric batteries – that can connect to high-voltage ultra-performance grids. After the steam engine and the internal combustion engine, these “green” technologies have shifted us into a third energy and industrial revolution that is changing the world as we know it.”
“By seeking to break free from fossil fuels and turn an older order into a new world, we are in fact setting ourselves up for a new and more potent dependence. Robotics, artificial intelligence, digital healthcare, cybersecurity, medical biotechnology, connected objects, nanoelectronics, driverless cars…the most strategic sectors of the economies of the future, all the technologies that will exponentially increase our computing capacity, and modernise how we consume energy, our daily routines, and even our most significant collective choices will depend entirely on rare metals.”
“In the twenty-first century alone, their use has consolidated China’s supremacy”.
It is thus becoming progressively more evident that while the West is promising to pursue a much more green and digital future, the reality of mining and processing the minerals and metals required to deliver this to their citizens is going to be challenging. This is true of the full range of battery metals (primarily copper, nickel, lithium, manganese, cobalt and graphite) and other strategic metals (tin, tungsten, rare earths and platinum group metals, to name a few). A few reasons are:
- Permitting restrictions will constrain new mines, and even where they are allowed, they can take up to ten years to bring into production.
- Processing can be dirty, and new build of plants resisted by “NIMBY’s”.
- Raising funds for such projects will require costing and pricing assumptions that are complex to frame with any degree of certainty at this juncture.
- A broad swathe of the mineral resources are not found in the West, and new strategies will be needed to enter and work with the host countries and their communities, often in competition with Chinese state-sponsored entities.
Join us on Wednesday 6th for the panel discussion at the Joburg Indaba, and join the debate! Does the West have what it takes to walk the green walk, as well as just talk the green talk?