Envisioning the Future of Mining: Sizing Up the Super Cycle - Presentation by Frederik Els,...
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SIZING UP THE SIZING UP THE SIZING UP THE SIZING UP THE SUPERCYCLE SUPERCYCLE SUPERCYCLE SUPERCYCLE Frik Els | MINING com | @frikels Frik Els | MINING.com | @frikels
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The Global Mining Summit is the premium forum bringing senior mining executives and solution providers together. Over two days Mining Executives had the privilege of hearing from Cameco Corporation, Century Iron Mines Corporation, The Doe Run Company, New Millennium Iron Corp on topics ranging from mine productivity to skill shortage. Hear from one of these speakers, Frederik Els, Editor and Writer from MINING.com. For more information regarding attending or sponsoring this event please contact: Jenny Keane Marketing Manager marcus evans +1 312-540-3000 x6515 [email protected] or visit the website: www.miningsummitna.com
Transcript of Envisioning the Future of Mining: Sizing Up the Super Cycle - Presentation by Frederik Els,...
SIZINGUPTHESIZINGUPTHESIZING UP THE SIZING UP THE SUPERCYCLESUPERCYCLESUPERCYCLESUPERCYCLE
Frik Els | MINING com | @frikelsFrik Els | MINING.com | @frikels
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
“The meek shall inherit“The meek shall inheritThe meek shall inherit The meek shall inherit the earth, but not thethe earth, but not thethe earth, but not the the earth, but not the mineral rights.”mineral rights.”
‐‐ J Paul Getty J Paul Getty
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
18501850 2014 B b d b bbl2014 B b d b bbl•• 1850 1850 –– 2014: Booms, busts and bubbles2014: Booms, busts and bubbles
•• PPaper markets: Financialization of commodities
• China: Misunderestimating its impact
• Global risk profile:Global risk profile:Role of non‐traditional players,social media, transparencysocial media, transparency
• Headlines and trends to 2020
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
Taking Taking thetheggLLoooooooooooooooooonnggoooooooooooooooooo gg
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SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
ItIt ldld bbIt It could could be be worse, worse, you could beyou could beyou could be you could be farming…farming…farming…farming…
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
YOU ARE HEREYOU ARE HEREOUOU
UNTOUCHEDBYMIDASUNTOUCHEDBYMIDASUNTOUCHED BY MIDAS UNTOUCHED BY MIDAS “II don’t think anybody has a verydon’t think anybody has a veryI I don t think anybody has a very don t think anybody has a very good model of what makes gold good model of what makes gold
prices go up or downprices go up or down ””prices go up or downprices go up or down. . ‐ Janet Yellen
""Nobody really understandsNobody really understands gold gold ii d I d 'td I d 't t d tt d tpricesprices and I don'tand I don't pretend to pretend to understandunderstand them either." them either."
B B k‐ Ben Bernanke
PAPERBEATSROCKPAPERBEATSROCKPAPER BEATS ROCKPAPER BEATS ROCK
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
“Participating “Participating in a price in a price movement is not the movement is not the same as owning an same as owning an ggassetasset.” .”
‐‐ Tony Tony DedenDedenyyEdelweiss FundEdelweiss Fund
THEWAVEOFTHEFUTURESTHEWAVEOFTHEFUTURESTHE WAVE OF THE FUTURESTHE WAVE OF THE FUTURES
$ billions flowing into$ billions flowing into commodities
CFTC, Growmark
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLE
““F d llF d ll ii
SIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
““Fundamentally copper Fundamentally copper is is tight anywaytight anyway, add , add an an ETF ETF
hh dd ii bbto to that that and and it it becomes becomes explosiveexplosive.” .”
‐ David Thurtell ,Citigroup
WHAT THE ETF?WHAT THE ETF?WHAT THE ETF?WHAT THE ETF?
GOFORTHEGAPMYCHINAGOFORTHEGAPMYCHINAGO FOR THE GAP MY CHINAGO FOR THE GAP MY CHINA
China needs to China needs to learn from the learn from the world and the world and the world needs to world needs to l fl f hihilearn from learn from ChinaChina
‐‐ Xi Xi JinpingJinping
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
What would youWhat would youWhat would you What would you like tolike to
hear first? hear first? • \
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
2010 China Credit / Credit2010 China Credit / Credit Equals Gold #1 Collective Trust Product
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLE# of # of legal entities involved legal entities involved
SIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
in mining:in mining:
105 490105 490105,490 105,490 # of # of legal entities involved legal entities involved i l di l din culture, sports and in culture, sports and entertainment:entertainment:
102,775102,775l fl f hh–– National Bureau of Statistics National Bureau of Statistics ChinaChina
SLOWBOATTOCHINASLOWBOATTOCHINA1 Switzerland
SLOW BOAT TO CHINASLOW BOAT TO CHINA1 Switzerland2 South Africas3 P ki3 Pakistans4 New Zealands5 Hungarys
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
China’s coal imports China’s coal imports
=== =
3 54%3 54%3.54%3.54%of global of global productionproduction
‐‐ IEA 2012IEA 2012‐‐ IEA 2012IEA 2012
USA!USA!USA!USA!USA!USA!USA!USA!USA! USA! USA! USA!USA! USA! USA! USA!
Impact of country economic activity shocks on commodity prices
Source: IMF 2012
SIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
– World Bank, Growmark
2020VISION2020VISION2020 VISION2020 VISION
7 – “The $1 billion tweet. How 140 characters destroyed a gold mine”characters destroyed a gold mine
20202020VISIONVISION2020 2020 VISION VISION
6 – “Metal prices spike over supplyspike over supply worries after rebels capture massivecapture massive Sub‐Sahara mining complex”complex”
20202020VISIONVISION2020 2020 VISION VISION
5 – “After years of wrestling withwrestling with mining challenges, Mongolia cracks topMongolia cracks top 10 best investment destinations”destinations
2020VISION2020VISION2020 VISION 2020 VISION
4 4 –– “North Korea builds world’s “North Korea builds world’s l t th i ”l t th i ”largest rare earth mine.” largest rare earth mine.”
2020VISION2020VISION2020 VISION2020 VISION
3 3 –– “Vacationing “Vacationing billionaire financierbillionaire financier3 3 –– “Vacationing “Vacationing billionaire financierbillionaire financierbillionaire financier billionaire financier arrested under new arrested under new antianti corruptioncorruption
billionaire financier billionaire financier arrested under new arrested under new antianti corruptioncorruptionantianti‐‐corruption, corruption, transparency transparency legislation”legislation”
antianti‐‐corruption, corruption, transparency transparency legislation”legislation”legislation”legislation”legislation”legislation”
2020VISION2020VISION2020 VISION 2020 VISION
2 2 –– “Back to the salt “Back to the salt mines: Price recoversmines: Price recovers2 2 –– “Back to the salt “Back to the salt mines: Price recoversmines: Price recoversmines: Price recovers mines: Price recovers after potash after potash potentates stitchpotentates stitch‐‐upup
mines: Price recovers mines: Price recovers after potash after potash potentates stitchpotentates stitch‐‐upuppotentates stitchpotentates stitch up up deal”deal”potentates stitchpotentates stitch up up deal”deal”
SIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
1 – “Fanyan corners bismuth market causing widespread panic among blusher users”
SIZINGUPTHESUPERCYCLESIZINGUPTHESUPERCYCLESIZING UP THE SUPERCYCLESIZING UP THE SUPERCYCLE
Q & AQ & A
Frik Els | MINING.com | @frikels
