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2022 Joburg Indaba 5-6 Oct Joburg and online.

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.

16h00 Session Four
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.

Mining Indaba: Global fractures over Russia-Ukraine war trigger big policy, market shifts.

Mining Indaba: Global fractures over Russia-Ukraine war trigger big policy, market shifts.

The article below summarises a very interesting speech made by Steven Fox of Veracity Worldwide at the Cape Town Mining Indaba last week.

Article: Mining Indaba: Global fractures over Russia-Ukraine war trigger big policy, market shifts – Veracity Worldwide

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 6th April

2022 PGMs Industry Day 6th April

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.

International Investors: The prospects for the mining sector going forward

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

with
– 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

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

with
– 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

Building a green and digital future is not without its contradictions

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 Rare Metals War“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?

2021 Joburg Indaba (online) 6th -7th October

2021 Joburg Indaba (online) 6th -7th October

As a result of the Covid pandemic, this year’s Joburg Indaba event will once again be held online. Regardless of the format, you can expect a highly engaging and interactive two days packed with no-holds-barred constructive conversations on a wide range of critical issues affecting all stakeholders in the mining industry.

Renowned as a leading industry gathering, the Joburg Indaba will once again bring together CEOs and senior representatives from all major mining houses, local and international investors, government, parastatals, experts from legal and advisory firms and representatives from communities and organised labour.

Fiona Perrott-Humphrey, Aim Mining Research, and Senior Adviser, Mining Team, Global Advisory, Rothschild & Co. London will be chairing sessions on both days of the event.

Day One 10h40-11h25  Session Three

The changing geopolitics:  the new “cold war” for strategic minerals to fuel the energy transition

  • 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?

Brian Menell, Chairman and Chief Executive Officer, TechMet Ltd
Richard Williams, Executive Chairman, Bunker Hill Mining and Director, Trevali Mining
Stuart Brown, President, and CEO, Mountain Province Diamonds

Day Two 09h50-10h20   Session One

International Investors:  The prospects for the mining sector going forward 

  • Are we in a super cycle or an “energy-spiked” cycle?  What are the main drivers affecting the current 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 that they take advantage of these opportunities?

Brett Beatty, Partner, and Head of Australia, Resource Capital Funds
Olivia Markham, Managing Director, Natural Resources, BlackRock
Mick McMullen, CEO, Metals Acquisition

If you’d like to attend the event register here

Joburg Indaba’s online PGM Industry Day

It was the annual PGMs Industry Day on Wednesday 24th March 2021, a high-level strategic gathering that brought together leading industry players, including local and international mining companies, users and investors.  Against the backdrop of soaring PGMs prices, key stakeholders discussed the huge potential of this sector. Chaired by Bernard Swanepoel, some of the crucial issues addressed included:

• The outlook for platinum group metals globally
• The supply and demand fundamentals affecting the market
• Producers’ strategies for future production, supply, investment, modernization and energy
• Potential growth opportunities and new projects
• The role of PGMs producers in Zimbabwe in the global market
• Investors’ perspectives on the PGMs industry
• Future markets and applications
• The specific role of PGMs in the hydrogen economy

Session Two was the Spotlight on investment:
Dr. Fiona Perrott-Humphrey ‘In Conversation’ with Evy Hambro, Managing Director, BlackRock (London)

Hambro said the hydrogen economy “could have a massive addressable market in the future but the journey will be incredibly volatile in terms of the move from labs to large scale deployment.”

He said the platinum industry had gone through “significant pain” because of the “moving parts” on the demand side which had played out negatively into the pricing of the commodity. “The industry reacted in many cases by taking capacity out and right now the industry is in a much stronger position, it has really sorted itself out. We have had the consolidation which has rationalised part of the industry. We have had the internationalisation. We have had the balance sheet repair. That has had an impact on the way that people value those businesses. In terms of investment quality, it is a vastly superior investment proposition than it has been many times in the past. Right now the industry is in a much stronger position. Its balance sheets are very robust, and I think that is something that cannot be ignored. The PGM industry – and other parts of the resources industry that are so well financed – deserve a different level of discount rate because I think the risk to those businesses is significantly lower because of that lack of gearing and that’s one of the reasons we feel it is the right place to have our clients’ capital invested.”

Asked about investor concerns over the traditional risks associated with mining companies operating in South Africa Hambro replied: “All of the traditional risks associated with South Africa – such as power supply, currency and so on have always been the case in the past during my career and are likely to be the case going forward. I think that’s reflected in the valuations.”

Turning to the issue of diversification by platinum groups through possible mergers with other mining groups such as gold producers Hambro commented: “This debate goes back to the past where gold companies were trading on dramatically higher premiums.

“In the Nineties, it was common to see gold companies on 30 times multiples versus a diversified resources company on a single-digit multiple, but those premiums have now narrowed drastically so the debate is less relevant than it was in the past.”

Hambro also pointed out that PGM producers did not just produce one metal, but multiple metals out of the same orebody being mined and commented: “You have commodity diversification embedded within the business right now so to add something else is not going to change things significantly.”

Fiona Perrott-Humphrey ‘in conversation’ with Sir Mick Davis, Jhb Mining Indaba (online) 8th Oct 2020

Mining majors must convince investors of need to replace value – Sir Mick Davis

When asked about what he thought the major miners had done well or badly during the seven years that he had been on the sidelines of the industry following the Xstrata merger with Glencore, Sir Mick said:

  • Some good progress had been made in reducing costs and restoring balance sheets post the excessive capital spend binge that had occurred mid-decade and destroyed considerable shareholder value.
  • Now, however, there is a danger of the miners and investors being too focused on short- term cash returns, whereas natural resources companies need to be investing constantly to replace the reserves they dig out of the ground.
  • One of the biggest challenges was finding investors who truly understood the cyclicality of the industry,  and emphasising that it cannot be seen as a quasi-annuity.
  • One of the ways to start investing in growth again would be to partner with junior explorers and developers, to share geographic risk and to tap the entrepreneurial spirit that is in danger of being wiped out in the very large, very centralised majors.
  • Another challenge facing the industry is persuading bright young people to follow a career in the mining sector when it gets such bad press on ESG issues. The sector does a very poor job of portraying its strengths and explaining that the metals and minerals that it mines and beneficiates are used in improving the lives of people across the globe. In particular, there is a compelling story to be told around those commodities whose characteristics may enable them to be used in working towards a “greener economy” (e.g. batteries in electric vehicles and developments around a hydrogen economy).

Environmental under-investment comes back to bite – Sir Mick Davis

Understanding Junior Miners

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