How a New Global Order Is Rewriting Commodity Investing (Tomasz Nadrowski)

1
00:00:00,080 --> 00:00:03,080
JD, we're so close to Christmas,
so close to Christmas, but it

2
00:00:03,080 --> 00:00:05,760
doesn't mean that the quality of
our guests are diminishing

3
00:00:05,760 --> 00:00:07,200
towards Christmas, They're
increasing.

4
00:00:07,240 --> 00:00:09,600
You've found someone very worthy
to speak to today.

5
00:00:09,600 --> 00:00:12,080
But I can't stop thinking about
Christmas because Christmas

6
00:00:12,160 --> 00:00:14,880
means time off, means Christmas
drinks like we are.

7
00:00:15,200 --> 00:00:17,440
We've got money of mine.
Christmas party drinks at

8
00:00:17,480 --> 00:00:20,600
BrewDog in Perth on the 16th of
December.

9
00:00:20,600 --> 00:00:23,480
It's a Tuesday.
Couple weeks away. 5:00 PM.

10
00:00:23,800 --> 00:00:25,560
If you want to be there, you've
got to click the button in the

11
00:00:25,560 --> 00:00:26,360
show notes.
RSVP.

12
00:00:26,360 --> 00:00:28,160
We've got to have an indication
of numbers.

13
00:00:28,160 --> 00:00:29,960
Love to see as many money miners
as possible.

14
00:00:30,600 --> 00:00:32,800
There mate, excited to have a
beer with everyone.

15
00:00:32,880 --> 00:00:36,360
Very excited and now tell me
about the very thoughtful guest

16
00:00:36,360 --> 00:00:38,040
that you've you've found for the
money miners today.

17
00:00:38,320 --> 00:00:40,800
Mate, we've got a wicked guest
today, Thomas Nadrowski.

18
00:00:40,800 --> 00:00:44,360
So he works out of New York and
he runs the Ambass Terradin

19
00:00:44,360 --> 00:00:47,880
Fund.
So critical minerals and a real

20
00:00:47,880 --> 00:00:50,760
buzz phrase, isn't it, of light.
But he thinks about this stuff

21
00:00:50,760 --> 00:00:53,960
super deeply, also from a
geopolitical lens.

22
00:00:54,000 --> 00:00:56,440
And I was fascinated.
I've read a lot of the stuff

23
00:00:56,440 --> 00:00:59,960
that he's done over the last
little while and the idea of

24
00:01:00,040 --> 00:01:02,760
turning these geopolitical
thoughts into, you know,

25
00:01:03,200 --> 00:01:06,880
positions in the market is
something kind of you have to be

26
00:01:06,880 --> 00:01:09,760
pretty thoughtful about.
It's very pie in the sky type

27
00:01:09,760 --> 00:01:11,200
stuff to think about all this
macro stuff.

28
00:01:11,200 --> 00:01:13,480
But actually positioning that is
a hard thing to do.

29
00:01:13,480 --> 00:01:16,600
And the funders had magnificent
returns since they've started a

30
00:01:16,600 --> 00:01:19,440
bit over a two year track record
now and the funders up nearly

31
00:01:19,440 --> 00:01:23,400
200% in those two years.
So I was very curious to to

32
00:01:23,480 --> 00:01:26,920
bring him on the show and as you
get a flavor from in this

33
00:01:26,920 --> 00:01:29,960
interview, he thinks about these
things very deeply, is very

34
00:01:29,960 --> 00:01:31,560
knowledgeable on a wide range of
things.

35
00:01:31,560 --> 00:01:32,960
I'm excited to share the
conversation mate.

36
00:01:33,440 --> 00:01:37,400
Super excited to, to, to listen
to what Thomas has to say about

37
00:01:37,400 --> 00:01:41,560
a whole host of, of things.
So Thomas's fund returns 200% in

38
00:01:41,560 --> 00:01:44,240
two years.
Now we love that volatility in

39
00:01:44,320 --> 00:01:47,920
the the mining stock universe,
JD, but a lot of people who

40
00:01:47,920 --> 00:01:50,360
invest in the mining stock
universe, they don't like the

41
00:01:50,360 --> 00:01:54,160
downside of that volatility.
And there are other options for

42
00:01:54,360 --> 00:01:56,360
for people out there.
Exceed Capital is a group you

43
00:01:56,360 --> 00:01:59,040
should check out Mate Commercial
Property Management Group based

44
00:01:59,040 --> 00:02:02,200
out of Brisbane, a bit over a 10
year track record at what they

45
00:02:02,200 --> 00:02:04,120
do.
And one of the reasons we like

46
00:02:04,120 --> 00:02:06,560
these guys, Mate, is that they
build alignment into everything

47
00:02:06,560 --> 00:02:08,240
they do.
So when you're getting on board

48
00:02:08,240 --> 00:02:10,520
with them and you're looking at
investing in their trusts,

49
00:02:11,000 --> 00:02:13,560
you're investing alongside the
management team there, which is

50
00:02:13,560 --> 00:02:15,360
super important to us.
We love alignment.

51
00:02:15,360 --> 00:02:20,520
JD over $400 million in AUM now
their flagship collective fund

52
00:02:20,720 --> 00:02:23,840
mate, that's that's that's
produced consistent cash returns

53
00:02:23,960 --> 00:02:26,960
of of 8% and that's without a
capital gain.

54
00:02:26,960 --> 00:02:30,000
Their own internal rate of
return is 20% plus.

55
00:02:31,000 --> 00:02:34,320
And yeah, I think this is a a
thoughtful A thoughtful way for

56
00:02:34,320 --> 00:02:37,280
for people who are just trying
to have a bit of diversity in

57
00:02:37,280 --> 00:02:40,040
their portfolios.
We love mining stocks but my God

58
00:02:40,040 --> 00:02:42,640
mate, the the good times are
great, the bad times are not so

59
00:02:42,680 --> 00:02:44,120
great.
Absolutely, to break it down

60
00:02:44,120 --> 00:02:46,360
once, they're easier for people
wondering what the hell property

61
00:02:46,360 --> 00:02:48,720
is if you're so used to your
mining stocks, we're talking

62
00:02:48,720 --> 00:02:52,440
about an open-ended diversified
fund investing in commercial

63
00:02:52,440 --> 00:02:54,640
assets.
Think shopping centres and these

64
00:02:54,640 --> 00:02:56,840
sorts of things.
They spread these bets across

65
00:02:57,040 --> 00:03:00,320
sectors and across geographies,
with distributions paid out

66
00:03:00,560 --> 00:03:03,040
monthly.
So if you need to mix up your

67
00:03:03,040 --> 00:03:06,280
portfolio from specky mining
bets, check out what Exceed

68
00:03:06,280 --> 00:03:09,520
Capital does in the show notes.
Indeed, thank you for partnering

69
00:03:09,520 --> 00:03:10,800
with money.
Mine exceed capital.

70
00:03:10,840 --> 00:03:13,480
All right mate, let's let's go
to the interview.

71
00:03:16,560 --> 00:03:18,800
All righty.
Thomas Nadrowski, hope I'm

72
00:03:18,800 --> 00:03:21,080
saying that last name, right.
It's a it's a pleasure to have

73
00:03:21,080 --> 00:03:22,800
you on.
We're very excited to chat about

74
00:03:22,800 --> 00:03:26,040
geopolitics, commodities,
critical minerals and everything

75
00:03:26,040 --> 00:03:28,040
happening in our wider world.
Thank you for joining us, mate.

76
00:03:29,560 --> 00:03:31,320
Thank you, Janice.
Travis, thanks for having me.

77
00:03:32,400 --> 00:03:35,040
You, you think about the world
very, very interestingly,

78
00:03:35,040 --> 00:03:36,440
Thomas.
So I want to kind of start the

79
00:03:36,440 --> 00:03:39,480
conversation understanding about
your kind of framework for

80
00:03:39,480 --> 00:03:42,720
thinking about geopolitics and
kind of most importantly, how

81
00:03:42,720 --> 00:03:46,160
you actually translate that
geopolitical thinking into

82
00:03:46,360 --> 00:03:50,440
critical minerals investments.
All right.

83
00:03:50,440 --> 00:03:52,400
So these are two very different
questions.

84
00:03:54,080 --> 00:04:00,000
Let me start with with the
second and I just walk back into

85
00:04:00,000 --> 00:04:02,080
the geopolitics and mining in
general.

86
00:04:03,280 --> 00:04:06,400
I run a fund called Amvest
Teradin Critical Minerals Fund

87
00:04:06,400 --> 00:04:10,440
here in New York City, which
focuses on is the name such as

88
00:04:10,440 --> 00:04:15,080
Critical Minerals, the name
itself, Amvest that relates to a

89
00:04:15,080 --> 00:04:18,040
broker dealer firm that's
related to this business.

90
00:04:18,360 --> 00:04:24,000
Teradan stands for Terra Earth
in Latin and Dan means

91
00:04:24,000 --> 00:04:26,440
electricity in Japanese or Dian
in Chinese.

92
00:04:26,440 --> 00:04:29,720
So the idea is electricity drawn
from the ground.

93
00:04:29,720 --> 00:04:33,040
So that was the original idea to
focus on those critical minerals

94
00:04:33,040 --> 00:04:36,800
that are important for energy
addition rather than transition.

95
00:04:37,200 --> 00:04:40,920
But then it goes way beyond
battery metals because anything

96
00:04:40,920 --> 00:04:45,640
else, transducers, actuators,
electric motors, magnets, that

97
00:04:45,640 --> 00:04:48,560
relates to electric fields and
magnetic fields and we need to

98
00:04:48,560 --> 00:04:53,200
mine the materials for that.
So that was the first idea a

99
00:04:53,200 --> 00:04:55,080
couple of years ago during
COVID.

100
00:04:55,920 --> 00:05:00,160
What happened then is that in
2020, China came up with a new

101
00:05:00,160 --> 00:05:03,080
legislation called Export
Control Law.

102
00:05:04,280 --> 00:05:07,640
And I read that and I thought,
well, all this means that the

103
00:05:07,640 --> 00:05:11,120
world will bifurcate.
And unfortunately, five years

104
00:05:11,120 --> 00:05:13,440
on, I was right.
Unfortunately for everybody

105
00:05:13,440 --> 00:05:17,120
else, fortunately for the fund,
which is just at the spectacular

106
00:05:17,120 --> 00:05:21,520
year, we are banking on that
bifurcation because of what was

107
00:05:21,520 --> 00:05:24,920
in that legislation.
And ever since we've seen a lot

108
00:05:24,920 --> 00:05:28,520
of restrictions, which really
peaked this year.

109
00:05:29,720 --> 00:05:32,040
Some people associate this with
a broader trade war.

110
00:05:32,040 --> 00:05:33,520
In my view is a little
different.

111
00:05:34,040 --> 00:05:36,960
While this is something that I
had been cooking for many, many

112
00:05:36,960 --> 00:05:40,120
years, probably 15 years if we
go back to the first

113
00:05:40,960 --> 00:05:46,680
geopolitical clash over Earth
between Japan and and China, but

114
00:05:46,680 --> 00:05:49,680
maybe even longer if I look at
some of the other policies that

115
00:05:50,000 --> 00:05:54,360
China had introduced way back
late 90s, early 2000s.

116
00:05:55,160 --> 00:05:59,760
So the idea was we're going to
do a fund that completely

117
00:05:59,760 --> 00:06:01,880
bypasses the Chinese value
chain.

118
00:06:02,320 --> 00:06:04,800
Not that easy, right?
If you're in mining, especially

119
00:06:04,800 --> 00:06:07,120
if you've been in mining the
last 2025 years.

120
00:06:08,760 --> 00:06:13,080
But that was the ambition, no
Chinese equity, no Chinese debt,

121
00:06:13,080 --> 00:06:17,680
no securities, no technology if
possible, no offtake or at least

122
00:06:17,680 --> 00:06:20,960
majority of the product would
not be destined for China.

123
00:06:22,280 --> 00:06:25,120
And so that was that was the
original idea.

124
00:06:25,280 --> 00:06:28,720
Now coming back to your first
question, which is a broader

125
00:06:28,720 --> 00:06:30,640
question about geopolitics and
mining.

126
00:06:32,280 --> 00:06:34,640
Well, I've been in this business
for 1/4 of century now,

127
00:06:34,840 --> 00:06:38,440
unfortunately.
And of course geology matters

128
00:06:38,440 --> 00:06:40,760
first.
And I remember when I was giving

129
00:06:40,760 --> 00:06:44,960
that portfolio in a, in a, in a
large organization which had

130
00:06:45,360 --> 00:06:49,440
many different other industries,
I noticed one thing is in other

131
00:06:49,440 --> 00:06:54,000
sectors you can just take the
factory and go somewhere else.

132
00:06:54,000 --> 00:06:57,160
And of course we are very much
location bound in mining more

133
00:06:57,160 --> 00:07:01,600
than anywhere else.
So that's the geology part of

134
00:07:01,600 --> 00:07:03,680
this, but the geology part of
this is only underground.

135
00:07:03,720 --> 00:07:09,640
And as we know, complications
start above ground for a variety

136
00:07:09,640 --> 00:07:12,240
of reasons.
Security of 10 year, you know,

137
00:07:12,240 --> 00:07:17,160
security of cash flows,
strategic flows, acts of God and

138
00:07:17,160 --> 00:07:21,880
so on.
And that would not be related to

139
00:07:21,880 --> 00:07:25,400
geopolitics if we could just
mine something and sell on the

140
00:07:25,400 --> 00:07:28,360
spot, just like agriculture
historically, right?

141
00:07:28,520 --> 00:07:30,800
You produce something and you
sell in the local market.

142
00:07:31,280 --> 00:07:35,480
Mining is not like that if you
just bracket out like the first

143
00:07:36,320 --> 00:07:40,040
Bronze Age.
It started in Mesopotamia and

144
00:07:40,040 --> 00:07:43,560
Indus Valley because you could
find both copper and tin in the

145
00:07:43,560 --> 00:07:46,600
same place.
But everything else required

146
00:07:46,600 --> 00:07:50,960
long distance trade.
So mankind actually owes to

147
00:07:50,960 --> 00:07:55,480
mining long distance trading
already in a in a Roman Empire

148
00:07:55,480 --> 00:07:59,120
or ancient China, it was
difficult to find tin and copper

149
00:07:59,120 --> 00:08:01,320
in the same place to make
bronze.

150
00:08:01,480 --> 00:08:08,880
And so you are always exposed to
geography to move this stuff.

151
00:08:09,160 --> 00:08:12,680
And if you're exposed to
geography, you're also exposed

152
00:08:12,680 --> 00:08:17,600
to power and power play and that
it's important how it plays out.

153
00:08:17,600 --> 00:08:20,040
And of course, different regions
have different solutions to

154
00:08:20,040 --> 00:08:21,640
this.
It's really fascinating to read

155
00:08:21,640 --> 00:08:24,520
about how mining evolved in
different parts of the world and

156
00:08:24,520 --> 00:08:27,960
what we know about it and must
know about Europe and and

157
00:08:27,960 --> 00:08:32,760
mainland Asia.
Looking far back and who

158
00:08:32,760 --> 00:08:37,480
controlled the flows, whether
it's the miner who controlled

159
00:08:37,480 --> 00:08:40,080
the flows or who controlled the
mine in the 1st place, that also

160
00:08:40,080 --> 00:08:43,679
changed and, and the local
markets and the distant markets

161
00:08:43,679 --> 00:08:47,320
and transportation and security
over the transportation and the

162
00:08:47,320 --> 00:08:50,840
development of a contract law,
lack of the such a development

163
00:08:50,840 --> 00:08:54,960
and what it meant.
And then it brings us to the

164
00:08:55,040 --> 00:09:01,800
present day and I think we
slowly are recognizing that we

165
00:09:01,800 --> 00:09:05,840
are no longer in the world in
which we all grew up, myself

166
00:09:05,840 --> 00:09:09,240
here close to Wall Street in
Manhattan and other people

167
00:09:09,240 --> 00:09:12,760
active in this business and many
others where we were in a

168
00:09:12,760 --> 00:09:16,320
context of competition.
I think the social operating

169
00:09:16,520 --> 00:09:19,960
system is changing from
competition to conflict.

170
00:09:20,360 --> 00:09:22,880
And This is why if you ask
someone to define what critical

171
00:09:22,880 --> 00:09:26,320
minerals are, you know, people
will tell you all because it's

172
00:09:26,320 --> 00:09:30,120
for economic security or energy
security or national security.

173
00:09:30,400 --> 00:09:33,480
And the moment you have this
term security, of course, we're

174
00:09:33,480 --> 00:09:37,400
not talking about greed and
competition or increasing the

175
00:09:37,400 --> 00:09:40,200
pie.
We're talking about conflict and

176
00:09:40,200 --> 00:09:42,480
how we can protect ourselves
against conflict.

177
00:09:42,920 --> 00:09:47,800
So that's sort of a broader
canvas, but it's an important

178
00:09:47,800 --> 00:09:52,720
one because I think it's finally
surfaced this year and we

179
00:09:52,720 --> 00:09:56,480
haven't seen the last shot yet
in this in this battle.

180
00:09:57,560 --> 00:10:00,160
I think it's so, so clear to
anyone listening how, how deeply

181
00:10:00,160 --> 00:10:02,480
you're going to think about
things already from that laying

182
00:10:02,480 --> 00:10:04,960
of the land.
I'm very curious about the, the

183
00:10:04,960 --> 00:10:07,400
piece of legislation you
mentioned, Thomas, about five

184
00:10:07,400 --> 00:10:10,600
years ago, which kind of
triggered in your mind what was

185
00:10:10,600 --> 00:10:13,280
what was going to happen?
We've seen countless bits of

186
00:10:13,280 --> 00:10:15,440
legislation across, in
particular in the Western world,

187
00:10:15,440 --> 00:10:17,440
which don't really lead to an
awful lot of change.

188
00:10:17,440 --> 00:10:19,200
Why?
Why was this thing the

189
00:10:19,200 --> 00:10:23,840
instigator in in your mind you
need to set up the fund and it

190
00:10:23,840 --> 00:10:25,840
actually led to change in in the
world.

191
00:10:27,400 --> 00:10:32,680
It was so first, because already
at that time China controlled

192
00:10:33,160 --> 00:10:36,440
most of the refining and
processing of these materials

193
00:10:36,440 --> 00:10:39,640
and much of the mining.
So it was important because it

194
00:10:39,640 --> 00:10:44,920
also had, there was a precedent
in 2010 of China weaponizing and

195
00:10:44,920 --> 00:10:48,120
trying to weaponize where Earth
flows to Japan.

196
00:10:48,440 --> 00:10:52,080
I'm saying trying because
actually delve into the data how

197
00:10:52,080 --> 00:10:55,000
it all happened, it was not
extremely successful.

198
00:10:55,000 --> 00:10:58,560
It was a lot of smuggling out of
China at that time, which

199
00:10:58,560 --> 00:11:01,080
eventually led to dampening of
the prices.

200
00:11:01,080 --> 00:11:07,240
But the the Chinese government,
especially the current

201
00:11:07,480 --> 00:11:11,720
government.
So since 20/12/2013 was when

202
00:11:11,720 --> 00:11:15,800
there was a, a plenum, an
important third plenum of the

203
00:11:15,800 --> 00:11:18,600
Central Committee that decided
to bring the state owned

204
00:11:18,600 --> 00:11:20,600
enterprises to the forefront
again.

205
00:11:21,080 --> 00:11:25,520
And since then, two attempts to
consolidate rare earth business

206
00:11:26,400 --> 00:11:34,800
into conglomerates, 3 companies
now dominating this space down

207
00:11:34,800 --> 00:11:38,320
from, you know, countless
dozens, hundreds in the late

208
00:11:38,320 --> 00:11:43,200
90s, early 2000s.
So that consolidation was

209
00:11:43,280 --> 00:11:46,600
definitely a factor.
You don't see that sort of

210
00:11:46,600 --> 00:11:49,080
government activity anywhere
else in the world.

211
00:11:49,080 --> 00:11:51,480
But what's really important
about that piece of legislation

212
00:11:51,480 --> 00:11:54,600
is that that had a very, very
clear national security

213
00:11:54,600 --> 00:11:59,880
component and to enforce expert
control law.

214
00:12:01,240 --> 00:12:05,320
The the bodies that were
itemized there were State

215
00:12:05,320 --> 00:12:10,520
Council, which is the highest
government entity in China, and

216
00:12:11,000 --> 00:12:14,680
China Military Commission, CMC,
which gives you an idea.

217
00:12:14,680 --> 00:12:17,280
OK, well, there's a military
extension to this.

218
00:12:17,880 --> 00:12:22,800
So it's a serious matter.
And you know, you can weaponize

219
00:12:22,800 --> 00:12:25,480
commodity flows in two ways.
One is market access.

220
00:12:25,480 --> 00:12:29,960
And of course, Australia learned
it the hard way after asking for

221
00:12:29,960 --> 00:12:34,480
more clarity about the COVID
sources when China refused to

222
00:12:34,480 --> 00:12:37,280
buy coal from Australia.
So that's one way to do this.

223
00:12:37,680 --> 00:12:40,760
And the second way to do this,
of course to weaponize the

224
00:12:40,760 --> 00:12:49,120
flows, I mean, Russia sort of
fine-tuned that with gas sold to

225
00:12:49,120 --> 00:12:53,120
Europe and differential prices,
differential quantities,

226
00:12:53,720 --> 00:12:57,160
differential stockpiling or
inventories that it's managed in

227
00:12:57,600 --> 00:13:00,920
countries that were that were
buying gas, natural gas from,

228
00:13:01,160 --> 00:13:04,440
from from Moscow all the way up
to the Ukrainian war.

229
00:13:04,600 --> 00:13:10,960
So we have track record of using
commodity flows this way, both

230
00:13:11,480 --> 00:13:15,840
in terms of access on the demand
side and in terms of supply.

231
00:13:17,960 --> 00:13:21,560
Now this doesn't mean that we
know exactly what the end game

232
00:13:21,560 --> 00:13:24,720
here is.
We don't all we're banking on.

233
00:13:24,760 --> 00:13:29,320
And then our strategy is to
benefit from the scarcity value

234
00:13:29,880 --> 00:13:35,120
because whenever China imposes
restrictions, there's a glut of

235
00:13:35,120 --> 00:13:39,240
the product in China.
And therefore it's not a very

236
00:13:39,240 --> 00:13:41,160
smart idea to invest in those
companies.

237
00:13:41,160 --> 00:13:43,960
We need to focus on those that
were trying to rebuild the value

238
00:13:43,960 --> 00:13:47,080
chain in the West.
And it's a it's a difficult

239
00:13:47,080 --> 00:13:50,400
undertaking.
And unfortunately it doesn't

240
00:13:50,400 --> 00:13:55,000
seem like all the governments
are really understanding Western

241
00:13:55,000 --> 00:13:58,160
governments how to do this,
because it cannot be just done

242
00:13:58,440 --> 00:14:02,640
at the mind gate.
It has to be really thoroughly

243
00:14:02,880 --> 00:14:06,120
thought through in terms of what
the different pieces in the

244
00:14:06,120 --> 00:14:09,840
value chain are and what is
missing and what needs public

245
00:14:09,840 --> 00:14:12,000
money.
But public mining itself was not

246
00:14:12,000 --> 00:14:14,360
going to solve that problem.
There's a there's there's a much

247
00:14:14,360 --> 00:14:20,040
bigger task here had and I'm
just afraid that the suspension

248
00:14:20,040 --> 00:14:23,200
of the four out of 23
restrictions that we are seeing

249
00:14:23,200 --> 00:14:26,920
since the agreement between the
US and China and Pusan last

250
00:14:26,920 --> 00:14:30,000
month, two months almost late
October.

251
00:14:31,400 --> 00:14:35,960
That suspension is valid only
for 12 months and it is

252
00:14:35,960 --> 00:14:40,600
conditional and we haven't seen
the final agreement yet in

253
00:14:40,600 --> 00:14:44,360
writing.
So I would think that we might

254
00:14:44,360 --> 00:14:48,120
not have the time to really
build the beautiful value chain.

255
00:14:48,120 --> 00:14:51,760
And we have to just, you know,
learn as we as as we go along

256
00:14:51,760 --> 00:14:54,920
and just identify the best
projects and the projects that

257
00:14:54,920 --> 00:14:58,960
are closest to cash and not
something that's very on excise.

258
00:14:58,960 --> 00:15:06,560
And you know, looking at
20332040, we're not sure we are

259
00:15:06,560 --> 00:15:09,320
in charge of the calendar here.
How do you, how do you get

260
00:15:09,320 --> 00:15:14,560
comfortable with the, the
investment thesis in, in some of

261
00:15:14,560 --> 00:15:17,680
these, these, these, you know,
future producers or producers

262
00:15:17,680 --> 00:15:20,920
of, of critical minerals?
When, when some of the policy

263
00:15:21,160 --> 00:15:26,120
seems like it will lead to an
oversupply of certain critical

264
00:15:26,120 --> 00:15:28,600
minerals, like a decade long
oversupply in some, in some

265
00:15:28,600 --> 00:15:30,920
respects, especially if if
there's, you know, no, no

266
00:15:30,920 --> 00:15:33,360
ability to actually sell into
China.

267
00:15:33,800 --> 00:15:36,800
If if the demand isn't isn't
there in the West or it's going

268
00:15:36,800 --> 00:15:38,960
to take much longer.
Like how do you get comfortable

269
00:15:38,960 --> 00:15:41,520
with the investment case?
Yeah.

270
00:15:41,520 --> 00:15:44,280
So this is, this is a good
point.

271
00:15:45,240 --> 00:15:48,080
Will there be enough demand and
especially in the civilian

272
00:15:48,080 --> 00:15:50,680
market because people panic
mostly about the military, which

273
00:15:50,680 --> 00:15:54,080
is just a small chunk unless you
move your economy into a sort of

274
00:15:54,080 --> 00:15:55,720
a war footing, which is not the
case.

275
00:15:57,960 --> 00:16:02,240
In general, what we believe in
most of these markets, and you

276
00:16:02,240 --> 00:16:07,040
know, these are relatively small
markets, we won't see, you know,

277
00:16:07,040 --> 00:16:11,160
the 30 rare earth companies or
the OR the 25 tungsten companies

278
00:16:11,160 --> 00:16:17,520
or the 12 antimony companies
being successful and generating

279
00:16:17,520 --> 00:16:21,080
value.
What we'll probably see in each

280
00:16:21,080 --> 00:16:26,440
of those sectors is something
like an oligopolistic structure

281
00:16:27,960 --> 00:16:30,920
that is, you know, the first 3
or 4 that we'll get for the

282
00:16:30,920 --> 00:16:35,560
finishing line that will
probably capture most of the

283
00:16:35,560 --> 00:16:37,560
price.
And then hopefully we'll be able

284
00:16:37,560 --> 00:16:42,360
to consolidate the space, which
is something that's actually not

285
00:16:42,360 --> 00:16:44,240
happening in our Earth right now
yet.

286
00:16:44,360 --> 00:16:46,600
Maybe it will start.
We'll have to.

287
00:16:47,600 --> 00:16:50,440
So, you know, one of the things
about the positioning in the

288
00:16:50,440 --> 00:16:54,400
fund is that we want to be as
close to cash as possible,

289
00:16:54,400 --> 00:16:56,920
especially at a relatively high
interest rates environment.

290
00:16:57,280 --> 00:17:02,400
You're penalized for a long
duration to cash, so you cannot

291
00:17:02,400 --> 00:17:06,280
be overexposed to you know early
stage exploration.

292
00:17:06,680 --> 00:17:10,000
I mean yes, there are some
spectacular projects out there,

293
00:17:10,000 --> 00:17:13,800
but it cannot be just the core
of the of the portfolio.

294
00:17:13,800 --> 00:17:18,000
And that also means that we
started looking at some of the

295
00:17:18,920 --> 00:17:24,960
processing place both in the
West and Japan to look at, you

296
00:17:24,960 --> 00:17:27,359
know, how can we get closer to
the actual production.

297
00:17:27,359 --> 00:17:31,080
That also, of course, is due to
the fact that many of the

298
00:17:31,080 --> 00:17:34,920
products are not mined per SE.
But there are just those, you

299
00:17:34,920 --> 00:17:39,800
know, remoras that that function
alongside larger, larger

300
00:17:39,800 --> 00:17:43,280
products that are mined and
until recently were mined and

301
00:17:43,280 --> 00:17:45,600
sold to China.
China then would extract them

302
00:17:45,600 --> 00:17:49,400
like gallium at home from from
Australian bauxite.

303
00:17:49,400 --> 00:17:52,520
Now we need the gallium on the
western side of the divide as we

304
00:17:52,520 --> 00:17:58,480
need many other byproducts of
larger of larger reducer.

305
00:17:58,480 --> 00:18:01,360
So, you know, suddenly it's
interesting to look at zinc

306
00:18:01,360 --> 00:18:04,960
smelter, so aluminum refineries
and so on, or even copper

307
00:18:04,960 --> 00:18:09,920
smelters, electrolytic copper
for specific minor metals.

308
00:18:11,160 --> 00:18:16,720
But you're right.
I think the, the, the probably

309
00:18:16,720 --> 00:18:21,120
the number one lesson that I can
draw from the last two years is

310
00:18:21,120 --> 00:18:26,200
that the mentality of
exploration and development

311
00:18:26,200 --> 00:18:28,440
companies, management has to
change.

312
00:18:28,880 --> 00:18:31,840
It's just not enough at least in
this space to go out there and

313
00:18:31,840 --> 00:18:34,640
drill couple of holes and say,
OK, well that's fantastic.

314
00:18:35,200 --> 00:18:42,520
Hey, market, look at that.
The management has to think in

315
00:18:42,520 --> 00:18:46,160
terms of the value chain we're
building because you cannot sell

316
00:18:46,160 --> 00:18:50,200
this stuff to China anymore or
or you can if the Chinese

317
00:18:50,200 --> 00:18:56,400
company buys you like Shanghai,
but for rare earths, you cannot

318
00:18:56,400 --> 00:18:59,920
really sell to China anymore.
That's by the Chinese regulation

319
00:18:59,920 --> 00:19:03,160
from February of this year.
So they want to control both the

320
00:19:03,160 --> 00:19:08,120
flows in and out and facilitate
the, you know, acquisitions by

321
00:19:09,560 --> 00:19:12,040
their agent of influence,
Shanghai resources.

322
00:19:13,040 --> 00:19:21,800
But overall, it means that if
you are developing a perspective

323
00:19:22,880 --> 00:19:26,520
deposit, you have to think about
what exactly you're going to

324
00:19:26,520 --> 00:19:28,600
sell.
So in rare earths, it's going to

325
00:19:28,600 --> 00:19:32,320
be concentrate, mixed carbonate,
mixed oxide, and maybe you're

326
00:19:32,320 --> 00:19:35,320
going to separate it somewhere.
And if so, were who's going to

327
00:19:35,320 --> 00:19:37,800
be the client?
That has to come much sooner

328
00:19:37,800 --> 00:19:41,520
than it used to come before in
this sort of globalized era

329
00:19:41,520 --> 00:19:44,360
where everybody could just
basically dig something and sell

330
00:19:44,360 --> 00:19:47,360
to China.
Mostly, I think for these

331
00:19:47,360 --> 00:19:51,200
materials which are of such
critical importance for the West

332
00:19:51,200 --> 00:19:53,840
to rebuild those value chains,
those days are over.

333
00:19:54,160 --> 00:19:57,760
So we tend to look at, OK, so
how does this fit with whatever

334
00:19:57,760 --> 00:20:00,560
we know?
Let's just to use the rare earth

335
00:20:00,560 --> 00:20:04,840
example, whatever, you know,
about 5 sixth potential

336
00:20:05,200 --> 00:20:08,360
separation plants around the
world in addition to the

337
00:20:08,360 --> 00:20:10,640
Malaysian and the Estonian one
that exists right now.

338
00:20:11,080 --> 00:20:13,240
And you know, does it fit those
plants?

339
00:20:14,280 --> 00:20:15,560
Does the management think about
it?

340
00:20:15,560 --> 00:20:18,080
Do they know exactly what that
plant needs?

341
00:20:18,080 --> 00:20:23,240
Because in fact, in some of
these markets, the incentive

342
00:20:23,240 --> 00:20:27,360
should come from that middle of
the value chain that should send

343
00:20:27,360 --> 00:20:29,680
a signal to the market that's
exactly what we need, that's

344
00:20:29,680 --> 00:20:34,680
what we want and please find us
this or invest in a way that we

345
00:20:34,680 --> 00:20:37,760
can have a material that's ready
for our plant.

346
00:20:38,040 --> 00:20:42,000
That's what should happen.
I don't see the ad sort of on a

347
00:20:42,000 --> 00:20:44,400
global scale, but there are a
couple of companies that are

348
00:20:44,400 --> 00:20:48,760
thinking systemically about it.
Well, it makes me think of peak

349
00:20:48,840 --> 00:20:50,800
rare earths.
And you mentioned Shanghai there

350
00:20:50,800 --> 00:20:52,480
there before.
And I know when we spoke about

351
00:20:52,480 --> 00:20:55,080
this earlier, Thomas, this was
something kind of on your mind.

352
00:20:55,080 --> 00:20:58,960
So I'm curious for you to kind
of lay out exactly what you kind

353
00:20:58,960 --> 00:21:01,600
of learnt along the process of
this transaction with the

354
00:21:01,600 --> 00:21:04,520
Chinese ultimately taking
control of the asset in in

355
00:21:04,520 --> 00:21:11,280
Tanzania?
A couple of couple of different

356
00:21:11,360 --> 00:21:21,840
handles on that.
So the the model in which junior

357
00:21:21,840 --> 00:21:26,360
explorers could benefit from the
circled Chinese acquisition help

358
00:21:26,360 --> 00:21:32,520
premium functioned pretty well
in the late twenty 10s all the

359
00:21:32,520 --> 00:21:37,920
way until 2022.
That affects both the Australian

360
00:21:37,920 --> 00:21:42,640
and Canadian market.
The last transaction of this

361
00:21:42,640 --> 00:21:50,480
sort until peak was consummated
on February 5th, 2022 when Neo

362
00:21:50,480 --> 00:21:57,920
Metals, the company that Neo
lithium sorry company that owned

363
00:21:58,200 --> 00:22:02,040
a very prospective lithium
project in South America called

364
00:22:02,040 --> 00:22:06,680
Tres Cabratas, was taken over by
a Chinese entity.

365
00:22:07,680 --> 00:22:14,160
And on the same day, Xi Jinping
and Vladimir Putin signed No

366
00:22:14,160 --> 00:22:18,440
Limits Partnership.
And three weeks later, Canadian

367
00:22:18,440 --> 00:22:22,640
government updated its
Investment Canada Act that

368
00:22:22,640 --> 00:22:26,280
tightened the rules and
regulations regarding the

369
00:22:26,280 --> 00:22:30,320
putative sales of Canadian
controlled assets to Chinese

370
00:22:30,320 --> 00:22:32,880
entities.
Basically, the change meant that

371
00:22:33,760 --> 00:22:37,640
any Chinese entity was not
considered state owned.

372
00:22:39,400 --> 00:22:42,320
That affected not only assets
that were controlled by China by

373
00:22:42,480 --> 00:22:45,640
Canadian companies inside
Canada, but also those that

374
00:22:45,920 --> 00:22:48,760
those companies controlled
outside of Canada.

375
00:22:49,720 --> 00:22:55,640
Ferb in some way seem to be
trading in the same direction at

376
00:22:55,640 --> 00:23:01,920
the time. 20/22/23 and 23.
There was a longer debate about

377
00:23:01,920 --> 00:23:07,960
this at the G7 meeting, plus
South Korea, Australia, New

378
00:23:07,960 --> 00:23:11,360
Zealand and Japan.
The Japanese were keen and

379
00:23:11,520 --> 00:23:16,920
developing a sort of a broader
system for the elite nations,

380
00:23:17,840 --> 00:23:19,320
kind of seeing the writing on
the wall.

381
00:23:19,320 --> 00:23:21,200
And Japan, we can come back to
this later.

382
00:23:21,200 --> 00:23:24,440
Japan is a country that actually
has done its homework much

383
00:23:24,440 --> 00:23:26,280
better than other Western
countries.

384
00:23:26,280 --> 00:23:28,800
And I'm using the term W
functionally, not geographically

385
00:23:28,800 --> 00:23:32,040
here.
And so that didn't go much

386
00:23:32,040 --> 00:23:33,640
further.
And of course, we had a change

387
00:23:33,640 --> 00:23:39,520
of administration here that's a
little bit of spanner in the

388
00:23:39,520 --> 00:23:43,680
works of some of those
multilateral efforts to build a

389
00:23:43,680 --> 00:23:51,720
common approach to this, to this
problem ex China Peak itself.

390
00:23:51,720 --> 00:23:54,160
Well, the first the company came
through a couple of management

391
00:23:54,160 --> 00:23:55,920
changes.
So it's difficult to see a

392
00:23:55,920 --> 00:24:00,440
linearity there, but it is true.
Then 2022 when Appian was

393
00:24:00,440 --> 00:24:04,960
selling its stake, the
management back then struggled

394
00:24:04,960 --> 00:24:08,720
to find a buyer in UK and
elsewhere.

395
00:24:08,720 --> 00:24:11,280
And you know, this is where
Shanghai stepped in.

396
00:24:12,880 --> 00:24:18,160
Since then I'm aware of
discussions, maybe that's not

397
00:24:18,160 --> 00:24:22,920
public at different levels, sort
of trying to figure out how to

398
00:24:23,960 --> 00:24:26,840
stop the creep.
Giving that obviously Shanghai

399
00:24:26,840 --> 00:24:34,360
is the chosen agent by the
government in China to acquire

400
00:24:34,360 --> 00:24:38,400
stakes in foreign entities.
I mean, they still own the stake

401
00:24:38,400 --> 00:24:42,680
and meet empty materials in US
as well as others in Vietnam,

402
00:24:42,800 --> 00:24:47,480
Tanzania from another Australian
junior in Australia proper.

403
00:24:47,840 --> 00:24:53,000
They tried also to get access to
a material from Canada

404
00:24:53,160 --> 00:24:56,320
unsuccessfully.
The company hasn't had much

405
00:24:56,320 --> 00:24:59,840
success.
I'd say CNMC and NFC, it's it's

406
00:24:59,840 --> 00:25:02,560
foreign arm have had a little
more success in Madagascar in

407
00:25:02,560 --> 00:25:07,280
Brazil last year.
So Shanghai is not the only rare

408
00:25:07,280 --> 00:25:12,640
earth player.
But I am surprised that there

409
00:25:12,640 --> 00:25:17,640
was not more effort, at least
from what we know in the public

410
00:25:18,160 --> 00:25:22,760
sphere from Ferb to block this.
Just that it around the time

411
00:25:22,760 --> 00:25:28,440
where, you know, high level
preparations were taking place

412
00:25:28,440 --> 00:25:35,080
for Australia US mineral deal,
which I think was signed in

413
00:25:35,280 --> 00:25:39,800
early October was it?
So it is, it is a bit

414
00:25:39,800 --> 00:25:42,680
surprising.
Now there's an initial layer to

415
00:25:42,680 --> 00:25:48,200
this is the Tanzania has a has a
bit of a political problem right

416
00:25:48,200 --> 00:25:50,200
now.
This is not new.

417
00:25:50,640 --> 00:25:53,400
We saw it under the previous
president who passed away during

418
00:25:53,400 --> 00:25:56,800
the COVID pandemics.
It seemed originally that under

419
00:25:57,000 --> 00:25:59,600
sort of Hassan things would kind
of quiet down.

420
00:25:59,840 --> 00:26:03,160
The most recent election was
mismanaged.

421
00:26:03,160 --> 00:26:08,480
And I just spoke to another
leader, an executive, another

422
00:26:08,840 --> 00:26:13,080
company with assets in Tanzania.
We don't know which way it goes

423
00:26:13,080 --> 00:26:15,320
and what's going to happen to
the to the licenses.

424
00:26:15,320 --> 00:26:20,560
However, it does seem that China
with a massive investment to

425
00:26:20,560 --> 00:26:25,280
upgrade Tazara rail line in
Tanzania will have pretty good

426
00:26:25,280 --> 00:26:29,360
access to the government.
And therefore with the structure

427
00:26:29,360 --> 00:26:34,280
of the ownership prior to this
final takeover, maybe from the

428
00:26:34,280 --> 00:26:36,880
Tanzanian side, it would have
been difficult to engineer

429
00:26:36,880 --> 00:26:41,840
something else from the sellers.
It is still surprising because

430
00:26:41,840 --> 00:26:46,400
the the offer from the Florida
unit was slightly higher, maybe

431
00:26:46,400 --> 00:26:50,280
should have been much higher.
And this is an entity with some

432
00:26:50,280 --> 00:26:53,760
high profile, you know, ex
politician participation in the

433
00:26:53,760 --> 00:26:56,000
United States.
So you would have thought that

434
00:26:56,000 --> 00:27:00,200
there is a sufficient political
support for that for that

435
00:27:00,200 --> 00:27:03,280
counter bit.
It wasn't really seriously taken

436
00:27:03,280 --> 00:27:08,360
into consideration by peak.
So very disappointing.

437
00:27:08,760 --> 00:27:11,600
It is a, it is a decent asset.
It's an asset that's closer to

438
00:27:11,600 --> 00:27:15,320
production than any others, has
an interesting breakdown in

439
00:27:15,320 --> 00:27:16,720
terms of the rare earth
elements.

440
00:27:16,720 --> 00:27:21,760
We always have to look at that.
And therefore I think it's a big

441
00:27:21,760 --> 00:27:27,120
loss for, for the Western world.
And I, I, I think I would

442
00:27:27,120 --> 00:27:32,760
probably ascribe it to lack of
coordination at the

443
00:27:32,800 --> 00:27:36,600
intergovernmental level, more
than just naivete of the of, of,

444
00:27:36,600 --> 00:27:41,160
of the management who couldn't
find alternative sources of

445
00:27:41,160 --> 00:27:46,120
demand for that.
But the issue didn't start this

446
00:27:46,120 --> 00:27:47,800
year.
It's probably three years ago

447
00:27:47,800 --> 00:27:50,800
when the thing was was lost.
Trevor, we're talking about some

448
00:27:50,800 --> 00:27:53,440
pretty gnarly problems.
China has managed to pull ahead

449
00:27:53,760 --> 00:27:57,120
on a lot of its engineering know
how, and it's a bit of a

450
00:27:57,120 --> 00:27:58,600
challenge here.
I mean, you know, people are

451
00:27:58,600 --> 00:28:01,200
critical of the West's
engineering capability, but I

452
00:28:01,200 --> 00:28:04,200
think there's a solution.
There is my because we actually

453
00:28:04,200 --> 00:28:07,320
have some wonderful engineers
here, here in Perth.

454
00:28:07,320 --> 00:28:11,240
In fact, I know of a whole team
of them mate and they are called

455
00:28:11,280 --> 00:28:13,280
Switch Technologies.
If you've got an idea and it

456
00:28:13,280 --> 00:28:16,120
needs an engineering solution,
the the limits of physics are

457
00:28:16,120 --> 00:28:18,720
the only limits for Switch
Technologies because they will

458
00:28:18,720 --> 00:28:20,720
engineer it into reality.
Doesn't matter how hard the

459
00:28:20,720 --> 00:28:23,040
problem, they come up with an
engineering solution.

460
00:28:23,080 --> 00:28:24,200
You know, I love these guys
mate.

461
00:28:24,320 --> 00:28:27,960
They focus on reducing costs and
improving efficiency.

462
00:28:28,080 --> 00:28:30,000
Very simple.
Everyone can wrap their head

463
00:28:30,000 --> 00:28:32,520
around it and everyone wants it.
If you've got a problem at your

464
00:28:32,520 --> 00:28:35,080
mind site, you need it fixed.
You don't have the bandwidth,

465
00:28:35,080 --> 00:28:37,240
you don't have the time, you
might not have the capability

466
00:28:37,240 --> 00:28:39,920
within your team get switched to
look after it for you.

467
00:28:40,040 --> 00:28:41,960
There's a, there's always a
commercial case for these

468
00:28:41,960 --> 00:28:44,600
engineering solutions and you
can think of one that kind of

469
00:28:44,600 --> 00:28:48,040
comes to mind, the retrofitted
like cat trucks with these

470
00:28:48,040 --> 00:28:50,240
hybrid, hybrid retrofits.
Very impressive.

471
00:28:50,520 --> 00:28:53,160
Wouldn't have thought of it
efficiency, say savings there.

472
00:28:53,240 --> 00:28:56,600
And they started out with with
the, the hybrid retrofit on a

473
00:28:56,600 --> 00:28:59,160
Land Cruiser and then made it
work on it on a cat truck.

474
00:28:59,160 --> 00:29:01,160
Super impressive stuff.
Yeah, and they can do more as

475
00:29:01,160 --> 00:29:03,880
well.
They have completely designed,

476
00:29:04,000 --> 00:29:09,240
engineered and built a off grid
electric truck charging depot as

477
00:29:09,240 --> 00:29:10,480
well.
So a whole bunch of different

478
00:29:10,480 --> 00:29:14,000
problems that they can solve, be
it mechanical, be it electrical,

479
00:29:14,000 --> 00:29:16,720
be it software engineering
capability that you need.

480
00:29:16,720 --> 00:29:20,640
So if you're after a completely
integrated solution from concept

481
00:29:20,680 --> 00:29:22,960
to deployment, I reckon you
should consider Switch

482
00:29:22,960 --> 00:29:26,160
Technologies, Matt.
Pitch your idea to switch, go

483
00:29:26,160 --> 00:29:28,720
switch technologies, go switch.
Totally.

484
00:29:28,720 --> 00:29:32,680
The transaction slipped under
the radar was not info like in

485
00:29:32,680 --> 00:29:35,320
focus at all with the business
publications in in Australia and

486
00:29:35,320 --> 00:29:38,840
it just before you knew it, it
had completed and and.

487
00:29:38,840 --> 00:29:41,240
You're you're referring to the
Appian Appian sale?

488
00:29:41,240 --> 00:29:44,840
No, no, no.
The yeah, Shanghai's acquisition

489
00:29:45,080 --> 00:29:48,120
of of of peak, Yeah, it, it was,
it was honestly just a, a deal

490
00:29:48,120 --> 00:29:49,960
that really flew under the
radar, made probably

491
00:29:49,960 --> 00:29:53,760
intentionally as a strategy to
to see it complete from all the

492
00:29:53,760 --> 00:29:56,640
people who incentivized to to
see that transaction like, you

493
00:29:56,640 --> 00:29:58,520
know.
Well, maybe, maybe that's, you

494
00:29:58,520 --> 00:30:00,440
know, maybe that's the
management's fault, maybe they

495
00:30:00,520 --> 00:30:02,120
didn't do their the job
properly.

496
00:30:02,120 --> 00:30:03,160
I don't know.
I don't know.

497
00:30:03,600 --> 00:30:05,840
We're not close to that story
enough to know.

498
00:30:06,680 --> 00:30:09,160
In some respects, what is
management's duty though?

499
00:30:09,160 --> 00:30:11,920
Their duty is to maximize value
for for shareholders.

500
00:30:11,920 --> 00:30:15,360
And in Pig's case, where's the
other buyer If if they're blocks

501
00:30:15,360 --> 00:30:17,080
it, what's the alternative,
right?

502
00:30:18,280 --> 00:30:19,960
It's complicated, but there was
another buyer.

503
00:30:19,960 --> 00:30:22,360
There was another.
Buyer, you're, you're correct,

504
00:30:22,360 --> 00:30:23,480
Sorry.
You're correct.

505
00:30:23,480 --> 00:30:24,920
Yeah.
There was another buyer with

506
00:30:24,920 --> 00:30:29,920
about 4042 or 45,000,000 premium
compared to the Chinese offer.

507
00:30:29,920 --> 00:30:31,640
That's right.
And that was dismissed, which is

508
00:30:31,640 --> 00:30:34,200
really raising a question mark
of why that was the case.

509
00:30:34,200 --> 00:30:37,080
Shareholders got an uplift
though from from Shanghai from

510
00:30:37,120 --> 00:30:38,640
from memory.
But yeah, you're right, I forgot

511
00:30:38,640 --> 00:30:39,880
about that.
There was that consortium, I

512
00:30:39,880 --> 00:30:43,400
think was the funding kind of
like the entity well known and

513
00:30:43,400 --> 00:30:45,040
the funding kind of concrete.
There was probably some

514
00:30:45,040 --> 00:30:47,600
conditionality risk to that.
But yeah, I.

515
00:30:48,280 --> 00:30:50,720
Well, like I heard that there
was a break fee, but if I looked

516
00:30:50,720 --> 00:30:53,280
at it, the break fee was
minimal, you know, by

517
00:30:53,280 --> 00:30:55,280
comparison.
So I don't, I, I really don't

518
00:30:55,280 --> 00:30:57,480
know.
I think, I think it was an

519
00:30:57,480 --> 00:31:00,200
assumption that Shanghai would
just, you know, run away with

520
00:31:00,200 --> 00:31:01,920
this.
You know, at the, at the

521
00:31:01,920 --> 00:31:04,560
corporate level, it's not a huge
loss.

522
00:31:04,560 --> 00:31:07,800
There are some other interesting
projects out there that are

523
00:31:07,800 --> 00:31:12,680
either potentially in Western or
Japanese control going forward.

524
00:31:13,600 --> 00:31:17,760
It's a shame, however, that
there's so much strategic

525
00:31:17,760 --> 00:31:20,920
mismanagement in terms of
thinking for that, because

526
00:31:20,920 --> 00:31:23,160
you're right about shareholder
value and the governments have

527
00:31:23,160 --> 00:31:25,600
to factor that in, right?
It's not just about the

528
00:31:25,600 --> 00:31:27,120
blocking.
That's what what you offer in

529
00:31:27,120 --> 00:31:31,320
exchange, but it's, it's still
in terms of how advanced this

530
00:31:31,320 --> 00:31:34,000
project is, it's a it's a shame
that it happened this way.

531
00:31:34,480 --> 00:31:37,520
So if we then kind of zoom out
and think about what the

532
00:31:37,520 --> 00:31:40,240
government has done,
particularly this year, Thomas,

533
00:31:40,240 --> 00:31:43,240
like MP materialism and the deal
that was structured with the

534
00:31:43,240 --> 00:31:45,760
government there is, is the big
one.

535
00:31:46,360 --> 00:31:50,760
I'm, I'm super curious to hear
how your, your kind of approach

536
00:31:50,760 --> 00:31:53,440
to investing in the space has
changed following that deal.

537
00:31:53,440 --> 00:31:56,760
Was, was that kind of as
significant as we interpreted it

538
00:31:56,840 --> 00:31:59,480
to be here?
And like just that the way in

539
00:31:59,480 --> 00:32:02,080
which we think about how the the
government is going to get

540
00:32:02,080 --> 00:32:05,120
behind particularly assets that
are domiciled within the United

541
00:32:05,120 --> 00:32:07,960
States.
Yeah.

542
00:32:07,960 --> 00:32:11,480
So this is where this
administration started, started

543
00:32:11,480 --> 00:32:15,600
by looking at the domestic
potential.

544
00:32:16,600 --> 00:32:21,240
And I think I have to give them
credit that it took them only

545
00:32:21,240 --> 00:32:23,640
what, 8 months to learn that
it's insufficient.

546
00:32:24,480 --> 00:32:26,280
Too bad that they didn't know
about it before.

547
00:32:27,640 --> 00:32:30,240
But of course, the, you know,
the deal with Australia and I

548
00:32:30,240 --> 00:32:34,480
can count Brazil, Argentina,
Malaysia, Cambodia and Japan,

549
00:32:35,240 --> 00:32:38,520
Kazakhstan.
I mean, there's just every every

550
00:32:38,520 --> 00:32:41,000
bilateral meeting, Saudi Arabia,
every bilateral meeting that the

551
00:32:41,320 --> 00:32:43,760
administration has is going to
be about critical minerals these

552
00:32:43,760 --> 00:32:47,920
days.
So it's not just domestic

553
00:32:47,920 --> 00:32:51,200
resources and we know it.
And and of course, you know,

554
00:32:51,200 --> 00:32:53,800
Australian investors know it
too, because there are some high

555
00:32:53,800 --> 00:32:56,800
profile Australian cases that
are stuck in the courtroom in

556
00:32:56,800 --> 00:32:59,640
the United States.
Takes forever to get things off

557
00:32:59,640 --> 00:33:01,840
the ground on that particular
deal.

558
00:33:03,640 --> 00:33:05,280
There are a lot of lot of
levers.

559
00:33:05,280 --> 00:33:08,400
There are a lot of lot of
pieces.

560
00:33:09,560 --> 00:33:14,640
Not all of these make sense.
This is not a company that

561
00:33:14,640 --> 00:33:17,320
controls an asset with heavy
rare earths, which is exactly

562
00:33:17,320 --> 00:33:22,520
what's what's needed right now.
A company with several holes in

563
00:33:22,520 --> 00:33:25,120
the value chain still
unresolved.

564
00:33:25,640 --> 00:33:28,000
However, it would really matter
it and we're you know, it's

565
00:33:28,720 --> 00:33:31,760
symptomatic that you mentioned
that it it had, you know, sent

566
00:33:31,800 --> 00:33:36,160
some ripples through the
Australian marketplace was the

567
00:33:36,160 --> 00:33:40,800
floor price, the floor price,
the floor price under neodymium,

568
00:33:40,800 --> 00:33:45,720
preziodymium index, let's say it
anyway, this is not an index.

569
00:33:45,720 --> 00:33:48,960
It's not like Rotterdam
warehouses where we have this

570
00:33:48,960 --> 00:33:53,160
sort of first inkling of the non
Chinese prices.

571
00:33:53,800 --> 00:33:56,040
But this is a signal from the
government and it's an important

572
00:33:56,040 --> 00:33:57,800
one.
And of course that price still

573
00:33:57,800 --> 00:34:00,520
means very little for empty
materials, at least did for the

574
00:34:00,520 --> 00:34:02,840
third quarter calendar of this
year.

575
00:34:03,000 --> 00:34:04,360
But it means a lot for the
market.

576
00:34:04,640 --> 00:34:08,199
Why is that?
Because the Chinese price is

577
00:34:08,199 --> 00:34:11,639
irrelevant.
It's relevant not because of

578
00:34:11,639 --> 00:34:15,760
some machinations of the Chinese
government's, because of the

579
00:34:15,760 --> 00:34:19,880
structure of the Chinese demand,
domestic demand, which is much

580
00:34:19,880 --> 00:34:22,400
more elastic than the Western
demand.

581
00:34:22,719 --> 00:34:27,199
The Western demand is very
inelastic and we are confronted

582
00:34:27,199 --> 00:34:32,800
of this in many minerals where
the Chinese producers cuff up

583
00:34:32,800 --> 00:34:38,920
product at benthic abysmal
demersal level prices.

584
00:34:39,880 --> 00:34:43,080
This is possible only if you
have segmented markets from

585
00:34:43,159 --> 00:34:44,920
macroeconomics and that's what
happens.

586
00:34:44,920 --> 00:34:48,280
That's what happens in graphite,
that's what happens in cobalt,

587
00:34:48,280 --> 00:34:50,120
that's what happens in in rare
earths.

588
00:34:51,120 --> 00:34:56,159
So why would let's assume for a
moment that there is competition

589
00:34:56,159 --> 00:34:59,920
among players for the in the
domestic market in in China.

590
00:35:00,120 --> 00:35:02,560
It's because of that demand
curve that's so different.

591
00:35:02,560 --> 00:35:06,960
Why would that price be applied
to the Western market?

592
00:35:08,200 --> 00:35:10,280
The only reason it does is
because there is no volume to

593
00:35:10,280 --> 00:35:11,800
determine the prices in the
West.

594
00:35:12,240 --> 00:35:15,960
Now there is an effort now to
start building volumes and you

595
00:35:15,960 --> 00:35:18,040
know there are different ways to
do it and not all ideas are

596
00:35:18,040 --> 00:35:21,960
good.
I mean, the other day a, an

597
00:35:21,960 --> 00:35:26,320
executive of a very prominent
lithium company in North America

598
00:35:26,320 --> 00:35:31,200
suggested that an equivalent
floor price for lithium

599
00:35:31,640 --> 00:35:34,840
carbonate would be based on cost
plus basis.

600
00:35:35,720 --> 00:35:38,440
I mean, this is the worst idea.
I can I, I, I can imagine,

601
00:35:38,440 --> 00:35:42,000
right, For any business to have
a cost plus guaranteed.

602
00:35:42,000 --> 00:35:44,680
That's, that's what destroyed
defense industry in this

603
00:35:44,680 --> 00:35:48,240
country, unfortunately.
So that's not what should

604
00:35:48,240 --> 00:35:50,600
happen.
Maybe maximum guarantee price,

605
00:35:50,600 --> 00:35:53,680
some kind of a ceiling and
transfer pricing to, to, to

606
00:35:53,680 --> 00:35:56,400
share the risk as the value
chain is being rebuilt.

607
00:35:56,640 --> 00:36:00,440
Or maybe floor and ceiling and
slowly you just expand it as as

608
00:36:00,440 --> 00:36:03,720
as you go forward and companies
can take more risk, but not cost

609
00:36:03,720 --> 00:36:07,320
plus.
So there is, I think still sort

610
00:36:07,320 --> 00:36:12,080
of testing.
I know how this new market in

611
00:36:12,080 --> 00:36:16,640
the West would function, what it
would mean to have a price that

612
00:36:16,640 --> 00:36:19,840
actually incentivizes the
production because the Chinese

613
00:36:19,840 --> 00:36:22,520
prices doesn't incentivize not
so much production per SE, but

614
00:36:22,520 --> 00:36:25,360
capital spending, of course,
because that's that has been

615
00:36:25,360 --> 00:36:29,000
tested by, you know, Chinese
monopolies and many other

616
00:36:29,000 --> 00:36:32,920
sectors.
And you know, steel and, and

617
00:36:33,320 --> 00:36:38,520
pharmaceuticals and, and
chemicals and so on, of course,

618
00:36:38,680 --> 00:36:41,120
and, and minerals as well.
There's this, there's this gap

619
00:36:41,120 --> 00:36:43,880
between what the capital
intensity is and what the

620
00:36:43,880 --> 00:36:46,040
operating costs are.
So once you have lost your

621
00:36:46,040 --> 00:36:48,600
capacity to build something and
to produce something, it's very

622
00:36:48,600 --> 00:36:53,080
difficult to bring capital back.
That's not just the problem of

623
00:36:53,080 --> 00:36:54,800
policy making.
It's because of the capital

624
00:36:54,800 --> 00:36:56,600
retreat from the space.
And I'm speaking here as an

625
00:36:56,600 --> 00:37:00,280
American, you know, mining is
just so peripheral here and then

626
00:37:00,280 --> 00:37:02,680
critical minerals are periphery
of the periphery.

627
00:37:03,480 --> 00:37:07,000
So there is a real problem with
the capital market just not

628
00:37:07,000 --> 00:37:14,840
simply picking up the, the, the
opportunity, but that's probably

629
00:37:14,840 --> 00:37:18,520
because there's no incentive.
And that's, that brings me to a

630
00:37:18,520 --> 00:37:25,360
different issue about about the
pre production cost of capital

631
00:37:25,360 --> 00:37:31,160
in in this space, because as we
all know, that relies heavily on

632
00:37:31,160 --> 00:37:34,200
equity and mostly public equity
and public equity for you know,

633
00:37:34,200 --> 00:37:37,200
75% of companies around the
world either in Sydney or in

634
00:37:37,200 --> 00:37:40,000
Toronto.
Why is that?

635
00:37:41,120 --> 00:37:43,480
And then I'm asking this because
this is conclusion in the book

636
00:37:43,480 --> 00:37:46,640
that I just written about it
entitled Mineral War.

637
00:37:47,040 --> 00:37:51,280
Why is that that there is no
incentive for 40 trillion worth

638
00:37:51,280 --> 00:37:55,080
of capital market in the United
States to invest in companies

639
00:37:55,440 --> 00:37:58,040
that are developing these
critical minerals critical for

640
00:37:58,040 --> 00:38:02,480
national security also of the
United States in the countries

641
00:38:02,480 --> 00:38:06,080
such as Australia, Canada and
the UK, which by American law

642
00:38:06,560 --> 00:38:08,960
are Title 3 Defense Production
Act countries.

643
00:38:08,960 --> 00:38:11,000
What does it mean?
It means that anything produced

644
00:38:11,080 --> 00:38:15,720
in Australia, Canada, UK counts
as domestic source for U.S.

645
00:38:15,720 --> 00:38:19,240
economic and national security.
And yet there is no tax

646
00:38:19,240 --> 00:38:25,440
incentive for U.S. equity funds
to invest in those places, which

647
00:38:25,440 --> 00:38:26,880
would be a wonderful thing to
have.

648
00:38:26,880 --> 00:38:29,720
Because just imagine that for a
for a moment that a couple of,

649
00:38:30,120 --> 00:38:32,920
you know, hundreds of billions
of dollars are landing in the

650
00:38:32,920 --> 00:38:37,400
sectors instead of all these
companies diluting themselves

651
00:38:37,640 --> 00:38:40,920
for three or four years between
one spike in the market, another

652
00:38:40,920 --> 00:38:43,400
spike in the market like this
one we have this year.

653
00:38:43,560 --> 00:38:45,880
So we're less concerned about it
now.

654
00:38:46,080 --> 00:38:48,720
But overall, the cost of equity
of these companies are way too

655
00:38:48,720 --> 00:38:51,520
high, especially if they have to
compete against state owned or

656
00:38:51,520 --> 00:38:54,480
state backed enterprises, you
know, in Africa or South America

657
00:38:54,480 --> 00:38:57,440
or elsewhere.
And yet this is not happening

658
00:38:57,440 --> 00:38:59,320
yet.
So hopefully, you know when my

659
00:38:59,320 --> 00:39:02,640
book will be out in January,
people will start discussing it.

660
00:39:02,640 --> 00:39:07,320
That's my big hope.
If, if, if, if, if the juniors

661
00:39:07,960 --> 00:39:10,320
in in Australia got access to
that capital, there'd be a lot

662
00:39:10,320 --> 00:39:13,560
more fancy steak dinners in
Perth every night, mate,

663
00:39:13,560 --> 00:39:15,680
there's.
I don't know, maybe some good at

664
00:39:15,680 --> 00:39:17,440
the back of it too.
There'd be some good, the cost

665
00:39:17,440 --> 00:39:20,000
of capital.
Absolutely, yeah.

666
00:39:20,000 --> 00:39:26,360
Lowers I, I, I do, I do think a
fair bit about the, the, the

667
00:39:26,560 --> 00:39:29,200
weird kind of geographical
dispersion of where capital kind

668
00:39:29,200 --> 00:39:32,400
of has just, has just formed.
But it's like it's a network

669
00:39:32,400 --> 00:39:35,640
effect of the, the cities in
which have become, you know,

670
00:39:35,640 --> 00:39:37,600
natural resource fundraising
cities in many ways.

671
00:39:37,600 --> 00:39:39,680
You've got the whole the whole
build out of that ecosystem.

672
00:39:40,480 --> 00:39:42,480
Tax incentive seems like a
strategy to make a big

673
00:39:42,480 --> 00:39:44,120
difference in attracting
different sorts of.

674
00:39:44,280 --> 00:39:46,240
Capital, but you know, there's
going to, we're going to do a

675
00:39:46,240 --> 00:39:49,960
lot of a lot of convincing
because for now the opposite is

676
00:39:49,960 --> 00:39:52,480
happening.
So this year Canada, which is,

677
00:39:52,480 --> 00:39:56,480
you know, another important
source of financing for for

678
00:39:56,480 --> 00:40:02,280
juniors, has already hammered
$126 billion in equity funding

679
00:40:02,280 --> 00:40:06,400
going work down South here,
mostly Silicon Valley, big tech

680
00:40:06,560 --> 00:40:09,400
companies.
That's not great for mining

681
00:40:09,400 --> 00:40:12,440
finance in Canada and I tell you
why I'm concerned.

682
00:40:14,120 --> 00:40:17,440
You know, we'll see when mineral
war comes out what what, what

683
00:40:17,440 --> 00:40:20,400
the reaction will be, right.
But one of the things that

684
00:40:20,400 --> 00:40:26,360
happened during this Australia
US critical mineral discussion

685
00:40:26,360 --> 00:40:29,080
was that superannuation fund
will have easier access to the

686
00:40:29,120 --> 00:40:31,560
US market right now.
I'm sure you noticed that.

687
00:40:32,560 --> 00:40:37,440
Well, that's not great because
it's only one way We need the US

688
00:40:37,440 --> 00:40:40,560
capital to flow to Australia.
It's extremely difficult still

689
00:40:40,560 --> 00:40:42,640
for a retail investor in this
country to invest in an

690
00:40:42,640 --> 00:40:44,960
Australian company.
It's a lot easier to invest in

691
00:40:44,960 --> 00:40:46,280
the Chinese company, believe it
or not.

692
00:40:46,280 --> 00:40:49,960
And actually I got a write off
from my taxes if I invest in a

693
00:40:49,960 --> 00:40:51,600
solar panel, even if it's made
in China.

694
00:40:51,960 --> 00:40:55,080
So there is a quixotic
contradiction here.

695
00:40:55,800 --> 00:41:02,400
But the most recent incentives
for other countries to invest

696
00:41:02,400 --> 00:41:07,520
into Uus, that's from a
macroeconomic perspective, it

697
00:41:07,520 --> 00:41:10,440
doesn't make much sense and not
for the for the US economy.

698
00:41:10,440 --> 00:41:14,440
And definitely I understand that
there is a draw for the big, big

699
00:41:14,440 --> 00:41:17,800
tech companies and so on.
But we need to make sure that

700
00:41:18,960 --> 00:41:22,240
capital and large capital is
available where the opportunity

701
00:41:22,240 --> 00:41:23,960
is.
And right now it is, you know,

702
00:41:23,960 --> 00:41:25,880
Sydney, Toronto, lesser extent
London.

703
00:41:27,480 --> 00:41:30,120
When when you think about the,
you know, the the rest of the

704
00:41:30,120 --> 00:41:33,760
world, putting these Western
countries aside that you kind of

705
00:41:33,760 --> 00:41:36,600
mentioned there, you think about
Africa, Central Asia, these

706
00:41:36,600 --> 00:41:40,160
sorts of countries where China's
belt and Rd. initiative has seen

707
00:41:40,160 --> 00:41:44,520
them just pick up asset after
asset for for 10 plus years now.

708
00:41:45,480 --> 00:41:50,360
Do you think a lot of those
places are kind of lost to to

709
00:41:50,360 --> 00:41:51,960
West investors to Western
governments?

710
00:41:51,960 --> 00:41:54,280
Or do you, do you have
confidence that like you

711
00:41:54,280 --> 00:41:56,640
mentioned where the US
administration is going,

712
00:41:57,120 --> 00:42:00,080
Kazakhstan, Saudi, all these
sorts of places that they can be

713
00:42:00,080 --> 00:42:04,640
kind of one back in a sense and
we can see minerals from those

714
00:42:04,920 --> 00:42:07,200
countries come to come to the
West?

715
00:42:12,160 --> 00:42:13,720
I'm not optimistic.
Here's why.

716
00:42:14,680 --> 00:42:22,400
When I worked at Angler Gold in
Johannesburg, this was shortly

717
00:42:22,400 --> 00:42:24,880
after we lost.
I mean, probably veterans

718
00:42:24,880 --> 00:42:27,920
remember the contested
acquisition over Normandy,

719
00:42:29,440 --> 00:42:33,720
Robert Decrappeni eventually
sold it to Franco and and

720
00:42:34,120 --> 00:42:38,920
Newmont.
So we lost that that contest and

721
00:42:39,320 --> 00:42:43,400
instead of trying with a South
African paper and a discount

722
00:42:43,400 --> 00:42:49,000
that was, you know, probably
preventing Arbs from sitting on

723
00:42:49,000 --> 00:42:52,200
the, you know, with shorts
during a contested acquisition

724
00:42:52,200 --> 00:42:58,520
on us, we decided to develop a
new strategy, which was let's

725
00:42:58,520 --> 00:43:03,800
just go around the world and
look at assets and invest in

726
00:43:03,800 --> 00:43:07,880
juniors to replace the South
African reserves, which was

727
00:43:07,880 --> 00:43:10,920
oxymoronic in itself.
But you know, let's try because

728
00:43:10,920 --> 00:43:16,280
we cannot compete against North
American paper for large assets,

729
00:43:17,200 --> 00:43:18,800
attractive assets such as
Normandy's.

730
00:43:20,400 --> 00:43:24,880
And so I worked very closely
with head of exploration and in

731
00:43:24,880 --> 00:43:29,640
that office in downtown
Johannesburg, his office was

732
00:43:29,640 --> 00:43:32,760
covered with postcards that he
used to send to his secretary

733
00:43:32,760 --> 00:43:37,840
from about 60 countries.
And soon enough, as I was in

734
00:43:37,840 --> 00:43:43,840
charge of risk evaluation for,
for, for essential acquisitions,

735
00:43:44,440 --> 00:43:49,400
I went to those sixty countries
or 50 or whatever on just every

736
00:43:49,400 --> 00:43:51,520
single continent.
If I look at the world map right

737
00:43:51,520 --> 00:43:58,000
now, 20 years later, a fraction
of these are available, not only

738
00:43:58,000 --> 00:44:01,160
because there is a war in 13
African countries right now, in

739
00:44:01,160 --> 00:44:04,840
13 African countries, there is
a, there's a, there's a

740
00:44:04,840 --> 00:44:10,560
conflict, kinetic conflict.
It's because we have moved away

741
00:44:10,560 --> 00:44:15,880
from globalization simply
because the liberal model just

742
00:44:15,880 --> 00:44:19,120
didn't work for those countries.
I'm not saying that the new one

743
00:44:19,160 --> 00:44:23,920
will work or whatever that is is
a new model, but we're just not

744
00:44:23,920 --> 00:44:27,680
going to invest in places where
the Chinese companies go.

745
00:44:28,240 --> 00:44:35,360
Iran, Sudan, Afghanistan,
Russia, Belarus, Zimbabwe,

746
00:44:35,360 --> 00:44:37,640
massively.
Maybe someone can survive there,

747
00:44:37,640 --> 00:44:40,520
but the Chinese are very
dominant and many, many others.

748
00:44:41,320 --> 00:44:44,120
So yes, the world has shrunken.
There are a couple of

749
00:44:44,240 --> 00:44:46,240
jurisdictions which are
contested.

750
00:44:47,440 --> 00:44:49,600
There are always 2 levels.
There's the national level.

751
00:44:49,600 --> 00:44:52,600
And let's say in South America
right now, there's definitely

752
00:44:55,320 --> 00:44:58,600
sort of a pendulum swinging back
from left to right, with the

753
00:44:58,600 --> 00:45:01,520
exception of Brazil on federal
level.

754
00:45:02,600 --> 00:45:07,240
And so, you know, I don't think
Russians and Chinese will

755
00:45:07,240 --> 00:45:09,240
develop lithium in Bolivia
anymore, right?

756
00:45:09,240 --> 00:45:15,040
So Bolivia after 20 years as
alliance with socialism is

757
00:45:15,040 --> 00:45:19,040
probably coming back to sort of
middle of the road policy

758
00:45:19,040 --> 00:45:22,800
making.
Brazil is a is is is a question

759
00:45:22,800 --> 00:45:23,920
mark.
I don't know what's going to

760
00:45:23,920 --> 00:45:27,080
happen next election there.
But then it's a good example so

761
00:45:27,080 --> 00:45:31,080
that you can operate as a junior
company or a developer in a

762
00:45:31,080 --> 00:45:34,000
country large enough, like a
federal country like Brazil, and

763
00:45:34,000 --> 00:45:36,760
not be too bothered by the, by
the federal level.

764
00:45:36,760 --> 00:45:39,640
Because what matters is actually
the state and the, and the

765
00:45:39,640 --> 00:45:41,960
locality.
And, and, and Brazil has a

766
00:45:41,960 --> 00:45:45,160
couple of localities that are,
you know, top notch and operate

767
00:45:45,160 --> 00:45:47,160
much better than many here in
the United States.

768
00:45:47,880 --> 00:45:49,160
So you have to be more
selective.

769
00:45:49,600 --> 00:45:53,720
And if I was working today and
you know, company that deals

770
00:45:53,720 --> 00:45:57,920
with say gold, which is more or
less ubiquitous and small, small

771
00:45:57,920 --> 00:46:01,400
quantities in many places, then
that map would be, would be much

772
00:46:01,400 --> 00:46:03,320
smaller.
Once you start talking about

773
00:46:03,320 --> 00:46:06,360
some of these critical minerals,
then it's even smaller than

774
00:46:06,360 --> 00:46:11,600
that.
It's, I don't expect the world

775
00:46:11,600 --> 00:46:17,200
to to go back to the sort of
open kumbaya plus competition

776
00:46:17,360 --> 00:46:23,120
type of operating system, Not
because I wouldn't love to.

777
00:46:23,120 --> 00:46:26,880
I would love to, but we're not
necessarily the only people here

778
00:46:26,880 --> 00:46:30,280
with agency.
You know, China has agency too,

779
00:46:30,280 --> 00:46:34,160
and it has its own plans.
In in a lot of ways, Thomas,

780
00:46:34,160 --> 00:46:37,680
the, the world has has caught up
with your world view and you,

781
00:46:37,800 --> 00:46:40,680
you positioned A portfolio
accordingly.

782
00:46:40,680 --> 00:46:45,280
But with, with policy actions
and the like, a lot of the, a

783
00:46:45,280 --> 00:46:47,400
lot of the investment
opportunities have have re rated

784
00:46:47,400 --> 00:46:50,080
substantially.
Does your positioning change?

785
00:46:50,080 --> 00:46:52,400
Do you, do you just see the
theme continuing?

786
00:46:52,400 --> 00:46:55,000
Like do you, is there a point in
time where you where you change

787
00:46:55,000 --> 00:46:58,080
the strategy of the fund or the
assumptions that we set up from

788
00:46:58,160 --> 00:47:00,560
with?
I think we're still in the early

789
00:47:00,560 --> 00:47:03,800
stages of this rebirth and it's
a painful rebirth.

790
00:47:04,280 --> 00:47:08,320
And for, you know, every success
story, there are two or three

791
00:47:08,480 --> 00:47:11,680
flunkies that are just don't
don't really add up.

792
00:47:13,200 --> 00:47:17,280
We are, you know, when, when you
think about critical minerals as

793
00:47:17,280 --> 00:47:18,840
such, I mean, what makes them
critical?

794
00:47:19,040 --> 00:47:20,560
First, of course, structural
demand.

795
00:47:21,640 --> 00:47:24,560
And there's a lot of things from
the demand side that are

796
00:47:24,560 --> 00:47:29,840
happening now, both in terms of
on, on the energy side and on

797
00:47:29,840 --> 00:47:32,640
the, on the construction
hardware that we need to develop

798
00:47:33,640 --> 00:47:37,760
to just live up to the, to the
demands of AI and new

799
00:47:37,760 --> 00:47:40,400
technologies and robotics and
everything else, in addition to

800
00:47:40,400 --> 00:47:43,960
of course, to the, to the
massive rearmament effort in

801
00:47:43,960 --> 00:47:48,120
both in Asia and in Europe.
So there's demand.

802
00:47:48,120 --> 00:47:49,960
The second thing is, of course,
supply disruptions.

803
00:47:49,960 --> 00:47:53,440
And like I said before, I don't
expect supply disruption to

804
00:47:53,440 --> 00:47:56,120
disappear.
As I said, out of the 23

805
00:47:56,120 --> 00:47:59,400
different restrictions China
just suspended for has LED a lot

806
00:47:59,400 --> 00:48:03,040
more that are still there and
many more could be added to

807
00:48:03,040 --> 00:48:05,920
this.
The third area is substitution.

808
00:48:05,920 --> 00:48:10,400
And here you got to be very
careful because it's no longer

809
00:48:10,400 --> 00:48:12,040
like when I worked in gold,
right?

810
00:48:12,160 --> 00:48:15,280
If you just find something and
you know, the helicopter takes

811
00:48:15,280 --> 00:48:18,960
it to the rent refinery or or
you know, to Switzerland and

812
00:48:18,960 --> 00:48:20,640
that's it, you don't deal with
this anymore.

813
00:48:20,640 --> 00:48:23,280
Maybe you do some marketing, you
know, with ready models in

814
00:48:23,280 --> 00:48:26,160
India, but that's it.
Here you have to be actually

815
00:48:26,360 --> 00:48:29,000
cognizant of what was happening
there.

816
00:48:29,000 --> 00:48:32,400
Who's going to use this
beryllium on this floor spar or

817
00:48:32,400 --> 00:48:35,800
that boron and for what?
And is there any risk that if

818
00:48:35,800 --> 00:48:38,040
there's not enough of this,
there's going to be a demand

819
00:48:38,040 --> 00:48:41,880
destruction?
So it's it's different thinking

820
00:48:41,880 --> 00:48:44,720
about the portfolio.
We will actually follow very

821
00:48:44,720 --> 00:48:48,480
closely developments in many
spaces including semiconductor

822
00:48:48,480 --> 00:48:50,640
space.
What it actually means, you know

823
00:48:50,640 --> 00:48:52,400
what's where, where's the
problem?

824
00:48:52,400 --> 00:48:55,120
I mean even in that, you know,
this was probably under

825
00:48:55,120 --> 00:49:02,280
reported, but during those three
weeks of the most severe quasi

826
00:49:02,280 --> 00:49:06,240
embargo on experts of different
minerals between October 9 and

827
00:49:06,240 --> 00:49:11,400
October 28th, Applied Materials
which is an important developer

828
00:49:11,400 --> 00:49:17,960
of hardware for semiconductor
production, they were screaming

829
00:49:18,280 --> 00:49:20,160
that their inventory was running
low.

830
00:49:20,160 --> 00:49:23,320
We don't know on which
materials, but it was a problem.

831
00:49:23,320 --> 00:49:26,400
IFML in the Netherlands was also
kind of a flashing red light.

832
00:49:26,800 --> 00:49:30,920
So it's, it's, it's not just the
batteries, it's not just the

833
00:49:30,920 --> 00:49:35,560
magnets, it's a, it's a much
broader story that you might not

834
00:49:35,560 --> 00:49:40,160
be able to easily substitute for
many of these, but some yes.

835
00:49:40,280 --> 00:49:44,040
And so you have to be, you have
to be careful and you have to

836
00:49:44,080 --> 00:49:47,080
you have to watch the
developments and of course look

837
00:49:47,080 --> 00:49:51,160
at what the speed is moving
from, you know, a, a really

838
00:49:51,160 --> 00:49:55,120
pretty idea in a lab into
something that's a proper pile

839
00:49:55,120 --> 00:49:57,760
up and proper demo.
And then, you know, potentially

840
00:49:57,760 --> 00:50:00,280
commercialized.
In the US we still have pretty

841
00:50:00,280 --> 00:50:02,120
good R&D and many of these
things.

842
00:50:02,120 --> 00:50:06,040
And of course we are committing
the cardinal sin of not being

843
00:50:06,040 --> 00:50:08,880
able to scale it up to
commercial production because

844
00:50:08,880 --> 00:50:12,560
the VC sector never had to care
about it And everything that was

845
00:50:12,560 --> 00:50:17,120
high tech, high end hardware
migrated to Taiwan, South Korea

846
00:50:17,120 --> 00:50:19,760
or Japan.
And then of course, large scale,

847
00:50:19,760 --> 00:50:25,200
low margin, big volume
metallurgy ended up in China and

848
00:50:25,200 --> 00:50:27,160
hence the problem in the middle
of the value chain.

849
00:50:27,600 --> 00:50:32,040
So yes, we, you know, you're
right, there'll be different

850
00:50:32,360 --> 00:50:36,960
stages there, but I think stage
1 is not, we're not at the end

851
00:50:36,960 --> 00:50:40,160
of that yet at all.
It's only starting.

852
00:50:42,080 --> 00:50:46,160
If we if we break down the
specific commodities that

853
00:50:46,160 --> 00:50:50,120
constitute critical minerals,
there's many ways to, you know,

854
00:50:50,120 --> 00:50:52,920
to evaluate their relevance in
this multi polar world.

855
00:50:52,920 --> 00:50:57,320
One one way that is, is simple
to think about on just a bar

856
00:50:57,320 --> 00:51:01,960
chart is is, yeah, like how much
like how much we depend on them

857
00:51:02,360 --> 00:51:04,160
from from China versus the rest
of the world.

858
00:51:04,160 --> 00:51:08,320
When when you just identify the
the most attractive commodities

859
00:51:08,320 --> 00:51:11,320
to go searching for for
investment opportunities like

860
00:51:11,320 --> 00:51:15,000
what, what ranks near the top of
the the the list for you,

861
00:51:15,000 --> 00:51:18,080
Thomas.
You know what I'm in love with

862
00:51:18,080 --> 00:51:21,160
these days?
The table of elements because

863
00:51:21,160 --> 00:51:26,040
it's it's, it's not only because
it brings me back to school, but

864
00:51:26,040 --> 00:51:31,000
also how it actually makes such
perfect sense like few other

865
00:51:31,000 --> 00:51:34,360
things in nature.
And you can, you can see how

866
00:51:34,360 --> 00:51:40,040
things connect in the market.
So I strongly encourage people

867
00:51:40,040 --> 00:51:42,000
to go back to that, to the
source.

868
00:51:43,160 --> 00:51:47,040
So we tend to view the market as
three different segments with

869
00:51:47,040 --> 00:51:50,080
their own rules and regulations.
If you wish rare earths is a

870
00:51:50,080 --> 00:51:55,480
sort of 1 sector is sufficiently
rich, right, with 17, if we wish

871
00:51:55,480 --> 00:52:00,360
actually 16 elements, 15 or 14
lanthanides +2.

872
00:52:00,400 --> 00:52:05,360
And we have, you know, we very
much a focus on the heavies plus

873
00:52:05,640 --> 00:52:10,160
samarium, atrium and gadolinium
for specific demand reasons.

874
00:52:12,120 --> 00:52:14,600
You have a source between
different types of geology, of

875
00:52:14,600 --> 00:52:16,920
course.
But at the end of the day, if

876
00:52:16,920 --> 00:52:20,600
someone finds really, you know,
high itch room xenotime and it's

877
00:52:20,600 --> 00:52:23,640
not owned by the Japanese and
still you can actually leverage

878
00:52:23,640 --> 00:52:27,000
this in the equity market.
I'll be, you know, a happy

879
00:52:27,000 --> 00:52:30,920
taker, so please let me know.
The second second segment is

880
00:52:30,920 --> 00:52:33,920
battery materials, very unhappy
sub sector in the last three

881
00:52:33,920 --> 00:52:35,600
years until probably two months
ago.

882
00:52:36,040 --> 00:52:39,720
On lithium side, the cobalt is
difficult to read because it's

883
00:52:39,720 --> 00:52:43,280
been a tug of war between DRC
and PRC this year.

884
00:52:44,120 --> 00:52:47,600
So we don't know what's, you
know, how, how Kinshasa will

885
00:52:47,600 --> 00:52:51,320
play with the with, with, with
the quotas going forward.

886
00:52:51,320 --> 00:52:55,080
Technically like an argument
that quotas are illegal from the

887
00:52:55,080 --> 00:52:57,280
perspective of the World Trade
Organization.

888
00:52:57,280 --> 00:53:00,600
But then, you know, we've had a
lot of quotas and I don't think

889
00:53:00,600 --> 00:53:05,000
many people are rushing to with
Lausanne and Geneva anymore to

890
00:53:05,520 --> 00:53:10,760
to fight their cases.
But, you know, graphite,

891
00:53:10,760 --> 00:53:16,200
manganese, vanadium, nickel, all
in pretty bad space right now.

892
00:53:16,720 --> 00:53:21,160
Some of these might not go back
to the, you know, heyday of

893
00:53:21,840 --> 00:53:26,360
excitement of better materials
for, say, NCM chemistry.

894
00:53:26,360 --> 00:53:29,000
So got to be cautious.
But it looks like lithium is

895
00:53:29,000 --> 00:53:34,160
going to have a better year in
this excitement over over energy

896
00:53:34,160 --> 00:53:36,000
storage.
And then there's this third

897
00:53:36,200 --> 00:53:40,120
area, which is the specialty
materials, which we tend to kind

898
00:53:40,120 --> 00:53:42,320
of dissociate between those that
are directly mined.

899
00:53:44,000 --> 00:53:46,400
And there's tungsten, there's
antimony, that's tin,

900
00:53:46,400 --> 00:53:52,400
increasingly titanium, but for
metal, titanium sponge, not not

901
00:53:52,400 --> 00:53:56,040
dioxide.
And then of course a number of

902
00:53:56,200 --> 00:54:02,120
by products, gallium, germanium,
Indium, what else hafnium that

903
00:54:02,120 --> 00:54:06,720
comes with zirconium usually
maybe an opportunity there is

904
00:54:06,720 --> 00:54:09,560
zirconium production might not
continue to grow.

905
00:54:09,560 --> 00:54:14,360
So by products are usually might
benefit from this.

906
00:54:15,760 --> 00:54:20,640
We like floor spar for a variety
of reasons, not only because of

907
00:54:21,040 --> 00:54:24,120
hexafluoride, you know, nasty
piece of toxic thing without

908
00:54:24,120 --> 00:54:27,880
which graphite production is not
possible, but also because it's

909
00:54:27,880 --> 00:54:30,520
an important element in the, in
the nuclear cycle.

910
00:54:30,520 --> 00:54:33,680
We're not exposed directly to
the large markets such as, you

911
00:54:33,680 --> 00:54:37,560
know, uranium and copper, but we
do look at things that matter

912
00:54:37,560 --> 00:54:40,800
for the uranium cycle.
SRMS and and and low and rich

913
00:54:40,800 --> 00:54:45,680
actually use different metals
out there and some of them, you

914
00:54:45,680 --> 00:54:47,480
know, some of these markets are
tighter than others.

915
00:54:48,200 --> 00:54:52,640
Is, is the decision to not play
in spaces like copper because

916
00:54:52,640 --> 00:54:54,400
that's a quite a competitive
space?

917
00:54:54,400 --> 00:54:56,280
Is that by mandate of the of the
fund?

918
00:54:56,280 --> 00:55:00,920
How do you think about that?
So not a hard mandate, but I

919
00:55:00,920 --> 00:55:03,440
think there's a lot of products,
there's a lot of opportunities

920
00:55:03,440 --> 00:55:06,400
to invest in copper straight.
We, we actually have one

921
00:55:06,400 --> 00:55:08,960
position right now and I'm very
happy about that position.

922
00:55:08,960 --> 00:55:11,640
And you know, it's a, it's a
story that we strongly believe

923
00:55:11,640 --> 00:55:15,000
in, but we wouldn't like to
have, you know, the core of the

924
00:55:15,320 --> 00:55:18,600
of, of the portfolio in it.
So it's sort of marginal in the

925
00:55:18,600 --> 00:55:23,840
in the grand scheme of things.
Why not those?

926
00:55:23,840 --> 00:55:27,680
We didn't believe that China
would be weaponizing copper or

927
00:55:27,680 --> 00:55:32,040
uranium percent.
We might change our view as now

928
00:55:32,040 --> 00:55:36,000
70% of copper smelting is in
China.

929
00:55:36,200 --> 00:55:40,600
So we're getting slowly to the
point, you know, where China

930
00:55:40,600 --> 00:55:44,400
might be in a position depending
how the TCRC problem is resolved

931
00:55:44,640 --> 00:55:46,920
between Chile and, and, and
China at the moment.

932
00:55:46,920 --> 00:55:49,440
It's it's a very artificial
market right now.

933
00:55:49,440 --> 00:55:52,760
But let's not forget, you know,
we look at copper prices, which

934
00:55:52,760 --> 00:55:54,680
is refined price and not
concentrate.

935
00:55:55,040 --> 00:55:58,400
And therefore it's more
important to smelt and refined

936
00:55:58,400 --> 00:56:00,680
this stuff.
Then who minds just to say that,

937
00:56:00,720 --> 00:56:03,360
you know, out of 10 largest
copper mines around the world, 8

938
00:56:03,360 --> 00:56:05,920
are controlled by Western
interests and only two by the

939
00:56:05,920 --> 00:56:09,000
Chinese is not enough if we
don't smell and refine this

940
00:56:09,000 --> 00:56:10,480
stuff.
So we'll be watching this space,

941
00:56:10,480 --> 00:56:16,440
but it's not, this is not how we
pitch the the funds to to our

942
00:56:16,440 --> 00:56:18,760
investors.
And uranium of course is, you

943
00:56:18,760 --> 00:56:21,680
know, there's so many other
opportunities to invest,

944
00:56:21,680 --> 00:56:23,640
including the sequestration
funds and so on.

945
00:56:23,640 --> 00:56:28,160
So we might have exposure to it
because someone produces, say,

946
00:56:28,600 --> 00:56:32,280
something else in uranium, but
that's that's only as far as it

947
00:56:32,280 --> 00:56:37,160
goes.
In, in Antimony, we noticed like

948
00:56:37,160 --> 00:56:43,880
a, a couple of months ago the a
bid by US antimony Co-op to, to

949
00:56:43,880 --> 00:56:47,080
acquire Lovato effectively.
It looks, it looks a bit more

950
00:56:47,080 --> 00:56:50,080
complicated now that their
script has peeled off, not too

951
00:56:50,080 --> 00:56:52,440
dissimilar from what might have
happened with, with Anglo and

952
00:56:52,480 --> 00:56:55,160
Normandy back in the day.
I I suspect.

953
00:56:55,200 --> 00:56:58,040
But is this a trend that we're
going to see more and more of

954
00:56:58,040 --> 00:57:02,000
these US kind of companies
bidding for, for the Wild West's

955
00:57:02,280 --> 00:57:04,160
like assets?
Can we like, do you think this

956
00:57:04,160 --> 00:57:07,480
will be the first of many of
these types of of deals to pop

957
00:57:07,480 --> 00:57:10,200
up on our radar?
Well, I would hope so they will

958
00:57:10,200 --> 00:57:15,000
see some meaningful
consolidation in the space and

959
00:57:15,000 --> 00:57:17,720
that consolidation in this case
will be vertical.

960
00:57:18,280 --> 00:57:20,320
And that's exactly where the
Chinese are beating us.

961
00:57:20,680 --> 00:57:24,040
Because, you know, we kind of
in, in mining in general and not

962
00:57:24,040 --> 00:57:30,640
just mining, we, we espouse
this, this gospel about 25 years

963
00:57:30,640 --> 00:57:33,760
ago that you have to just be
good at one node in the value

964
00:57:33,760 --> 00:57:35,600
chain and nothing else.
And it works perfect in

965
00:57:35,600 --> 00:57:38,320
semiconductors.
We thought it works fine in

966
00:57:38,320 --> 00:57:41,240
mining until you realize that,
you know, one company drills,

967
00:57:41,240 --> 00:57:45,640
another company moves the trucks
and yet another company owns the

968
00:57:45,640 --> 00:57:47,920
space, but someone else is
trading for them.

969
00:57:47,920 --> 00:57:49,880
You know, very few companies do
the whole thing.

970
00:57:51,240 --> 00:57:54,360
Meanwhile, you know, a a Chinese
SPV goes to Africa and

971
00:57:54,360 --> 00:57:57,960
everything is taking care of,
including future off take and

972
00:57:57,960 --> 00:58:00,120
financing.
And therefore you don't have an

973
00:58:00,120 --> 00:58:02,400
off take risk, don't have
jurisdictional risk because it's

974
00:58:02,400 --> 00:58:04,920
under, you know, Focock in
Africa.

975
00:58:04,920 --> 00:58:09,080
I'll see like in in South
America, you don't have a price

976
00:58:09,080 --> 00:58:11,800
risk, you don't have a cycle
risk, you can't compete with

977
00:58:11,800 --> 00:58:13,400
this.
And in addition to it, you know,

978
00:58:13,400 --> 00:58:17,520
cost of capital below inflation
and below GDP and growth level

979
00:58:17,520 --> 00:58:20,200
in China.
So that's that's for the

980
00:58:20,200 --> 00:58:24,000
vertically integrated system.
And so I would hope so that's

981
00:58:24,000 --> 00:58:26,800
one reason why I hope so.
Secondly, many of these U.S.

982
00:58:26,800 --> 00:58:28,160
companies are not particularly
good.

983
00:58:28,880 --> 00:58:32,880
So for them to have access to
decent assets would be a

984
00:58:32,880 --> 00:58:37,120
positive thing.
You know, recently a very

985
00:58:37,320 --> 00:58:42,160
shadowy U.S. company acquired A
metallization play in UK,

986
00:58:42,440 --> 00:58:47,200
actually the only western rare
earth metallization factory.

987
00:58:48,280 --> 00:58:51,240
And thanks God they did because
honestly they had very poor

988
00:58:51,240 --> 00:58:56,760
assets, you know, a nondescript
rare earth potential asset in

989
00:58:56,760 --> 00:59:00,120
Texas and an old Hitachi plant
without software.

990
00:59:00,280 --> 00:59:03,720
So not a great way to start, you
know, building a rare earth

991
00:59:03,720 --> 00:59:05,240
business.
But now they have metallization

992
00:59:05,240 --> 00:59:08,440
plant.
So I think, you know, probably

993
00:59:08,440 --> 00:59:11,440
MP materials will have the
currency to do something.

994
00:59:12,040 --> 00:59:16,400
We know that Linus is very
averse to anything in terms of

995
00:59:16,400 --> 00:59:19,760
consolidation in general.
That's a shame.

996
00:59:19,760 --> 00:59:22,560
I think it would be an
interesting, interesting role

997
00:59:22,560 --> 00:59:24,680
for them.
Your performance would be

998
00:59:24,680 --> 00:59:26,960
another one there.
You know, they, they have to

999
00:59:26,960 --> 00:59:30,880
find material that's not Russian
and sooner rather than later.

1000
00:59:31,160 --> 00:59:34,000
So it's there, there are
opportunities there.

1001
00:59:34,000 --> 00:59:36,280
Definitely.
I think we should see more of

1002
00:59:36,280 --> 00:59:38,240
this.
And then the question is going

1003
00:59:38,240 --> 00:59:41,000
to be of, you know, the value
and what, what the alternatives

1004
00:59:41,000 --> 00:59:43,480
are.
But we we do hope to start

1005
00:59:43,480 --> 00:59:45,960
seeing that as as, as the place
matures a bit.

1006
00:59:46,480 --> 00:59:49,520
And when you look across the the
three buckets that you described

1007
00:59:49,520 --> 00:59:51,720
and and look at some of those
elements, are there other

1008
00:59:52,120 --> 00:59:54,640
pockets or specific elements
that you're particularly excited

1009
00:59:54,640 --> 00:59:59,960
about at the moment?
I mean we're, we're excited

1010
01:00:00,360 --> 01:00:02,840
about specific.
So we start always looking at

1011
01:00:02,840 --> 01:00:07,320
the at the macro level and the
commodity level and then we're

1012
01:00:07,320 --> 01:00:10,160
looking, you know, at relative
value of course and, and other

1013
01:00:10,160 --> 01:00:13,600
drivers and whether there is a
significant commitment to the

1014
01:00:13,600 --> 01:00:16,720
Western value chain.
But at the end of the day, it's

1015
01:00:16,720 --> 01:00:22,080
really about the the asset
itself, right, because there is

1016
01:00:22,080 --> 01:00:25,760
no futures market where these
prices you know are gyrating and

1017
01:00:25,760 --> 01:00:28,520
that you're going to bank on
something as a high beta equity

1018
01:00:28,520 --> 01:00:35,080
exposure proxy to that price.
Therefore, you know, the asset

1019
01:00:35,080 --> 01:00:38,520
itself has to make sense that
some of these assets are new and

1020
01:00:38,520 --> 01:00:42,920
in development, say floor spar
and some others like beryllium

1021
01:00:42,920 --> 01:00:46,880
are mature or you know, high
periodic warts are mature and

1022
01:00:47,240 --> 01:00:50,560
absolutely critical and
strategic for the, for the

1023
01:00:50,560 --> 01:00:53,880
Western value chain.
And so we, you know, we, we, we

1024
01:00:54,040 --> 01:01:00,760
tend to kind of look across
across the space and we, you

1025
01:01:00,760 --> 01:01:06,240
know, we, we probably a little
less optimistic about some of

1026
01:01:06,240 --> 01:01:09,400
the battery materials.
I think there's some, there's

1027
01:01:09,400 --> 01:01:14,920
some disconnect here in general
in, in in this space and what

1028
01:01:14,920 --> 01:01:19,400
happened with the bifurcation
between the Western slash

1029
01:01:19,400 --> 01:01:23,680
Japanese car markets and the and
and the Chinese market.

1030
01:01:24,040 --> 01:01:26,080
But that happened for an
entirely different reason.

1031
01:01:26,080 --> 01:01:28,640
Has not absolutely nothing to do
with commercial rationale.

1032
01:01:28,640 --> 01:01:32,400
It's is the way China wanted to
reduce their dependence on

1033
01:01:32,400 --> 01:01:36,400
liquid fuels imported from the
Middle East and transported from

1034
01:01:36,400 --> 01:01:40,240
Malacca Straits, which is, you
know, strategic rationale and

1035
01:01:40,240 --> 01:01:42,120
not not commercial rationale at
all.

1036
01:01:42,240 --> 01:01:44,520
So that's the electrification of
their transportation.

1037
01:01:45,160 --> 01:01:48,880
Yeah, yeah, Yeah, totally.
Final question from from me.

1038
01:01:48,880 --> 01:01:54,000
Thomas, you, you've noted at
some point that the number of

1039
01:01:54,000 --> 01:01:56,440
funds in the mining space, we've
kind of spoken around this topic

1040
01:01:56,440 --> 01:01:59,120
quite a bit today is down
dramatically, I think down by

1041
01:01:59,120 --> 01:02:05,280
75% over the last decade alone.
Is that a, you know, the, the

1042
01:02:05,280 --> 01:02:08,400
quantum of money seeking
opportunities that that you look

1043
01:02:08,400 --> 01:02:10,000
at?
Is that something you think will

1044
01:02:10,240 --> 01:02:12,680
will grow?
Will we see more specialized

1045
01:02:12,680 --> 01:02:16,400
mining funds, more funds seeking
at critical minerals exposure

1046
01:02:16,400 --> 01:02:19,440
specifically in in the coming
five years say?

1047
01:02:21,680 --> 01:02:24,120
Right.
So first looking at the peso,

1048
01:02:24,160 --> 01:02:28,560
I'm not sure if it's 70%.
I had those numbers between 2010

1049
01:02:28,560 --> 01:02:32,760
and 2023.
So for london-based specialist

1050
01:02:32,760 --> 01:02:37,240
funds, which was back in the day
the largest source, that shrank

1051
01:02:37,240 --> 01:02:41,560
from 40 billion U.S. dollars in
assets under management to 12.

1052
01:02:42,520 --> 01:02:47,200
And in Canada over the same
period of time from 16 or 17

1053
01:02:47,200 --> 01:02:50,800
billion to about two.
So quite dramatic.

1054
01:02:51,680 --> 01:02:55,320
Let's say 23 was not glorious.
You're I'm not sure it's much

1055
01:02:55,320 --> 01:02:57,240
better right now.
There's a couple of reasons for

1056
01:02:57,240 --> 01:03:01,560
that.
First, of course, the ETFs, you

1057
01:03:01,560 --> 01:03:03,920
know, there's an entire new
generation of investors that

1058
01:03:03,920 --> 01:03:08,120
just are not comfortable with
sort of funds managed by by

1059
01:03:08,120 --> 01:03:12,040
humans because of the fee
structure, because of the gates,

1060
01:03:12,040 --> 01:03:15,160
because of this, because of that
ETF such as easy liquid and so

1061
01:03:15,160 --> 01:03:16,160
on.
But of course, because they are

1062
01:03:16,160 --> 01:03:22,320
easy and liquid, they're not
going to nurture a new industry

1063
01:03:22,320 --> 01:03:24,960
because essentially we're
talking about new industry, you

1064
01:03:24,960 --> 01:03:28,000
know, juniors going through this
birth canal of critical minerals

1065
01:03:28,280 --> 01:03:30,680
desert.
It's going to take a while.

1066
01:03:30,680 --> 01:03:33,280
And you cannot raise money for
ETFs if you don't have a broker

1067
01:03:33,280 --> 01:03:35,600
and a real fund specialist on
the other side.

1068
01:03:36,080 --> 01:03:39,160
So that's a problem.
It's a generational problem.

1069
01:03:40,920 --> 01:03:46,320
I think 1 area of hope is that
mining and critical minerals are

1070
01:03:46,320 --> 01:03:49,080
becoming a real topic here in
the United States.

1071
01:03:49,080 --> 01:03:51,000
I mean, it's really front page
news now.

1072
01:03:51,360 --> 01:03:53,440
There's constantly something
about this space.

1073
01:03:53,920 --> 01:03:57,760
And so people are becoming
curious, you know, start, you

1074
01:03:57,760 --> 01:03:59,360
know, calling and asking
questions.

1075
01:03:59,800 --> 01:04:02,040
And this is one of the reason
why I decided to write the book,

1076
01:04:02,040 --> 01:04:03,920
because they didn't necessarily
understand this space.

1077
01:04:04,400 --> 01:04:08,760
So you can find a sneak peek on
the mineralwar.com.

1078
01:04:09,320 --> 01:04:14,760
But it's it's just, it's an
attempt to explain to potential

1079
01:04:14,760 --> 01:04:20,320
allocators what the challenges
and why this space will matter

1080
01:04:20,320 --> 01:04:22,760
more and more and why this
demand is so structurally

1081
01:04:22,760 --> 01:04:26,880
important across a variety of
different industries.

1082
01:04:26,880 --> 01:04:30,120
We don't really usually think
about it as minors, but we have

1083
01:04:30,120 --> 01:04:32,480
to start thinking about it
because otherwise we won't be

1084
01:04:32,480 --> 01:04:34,160
able to redevelop those value
chains.

1085
01:04:35,600 --> 01:04:38,040
Thank you so much, Thomas.
It's a great place to leave this

1086
01:04:38,040 --> 01:04:39,360
conversation.
We've enjoyed it thoroughly.

1087
01:04:39,760 --> 01:04:41,760
Appreciate your time, Thomas.
Super.

1088
01:04:42,000 --> 01:04:43,240
Thank you.
Thank you for having.

1089
01:04:43,320 --> 01:04:46,000
Me big thank you to Thomas for
sharing his wisdom mate.

1090
01:04:46,000 --> 01:04:48,480
I really enjoyed that one.
Love the geopolitical and the

1091
01:04:48,480 --> 01:04:52,440
macro kind of ideations and
thinking that goes on behind the

1092
01:04:52,440 --> 01:04:53,880
scenes there.
He's clearly thought about it

1093
01:04:53,880 --> 01:04:56,440
quite a bit.
And I'll extend our thank yous

1094
01:04:56,440 --> 01:04:58,640
to Sandbicrand.
Support focus the platform by

1095
01:04:58,640 --> 01:05:01,760
market Tech Interlinks.
Check them out in the show

1096
01:05:01,760 --> 01:05:04,640
notes, as well as Switch
Technologies and Exceed Capital.

1097
01:05:05,200 --> 01:05:07,280
Uduru money Monas Uduru.
Go Australia.

1098
01:05:08,240 --> 01:05:11,080
Now remember, I'm an idiot.
JD is an idiot.

1099
01:05:11,440 --> 01:05:13,520
If you thought any of this was
anything other than

1100
01:05:13,520 --> 01:05:16,160
entertainment, you're an idiot
and you need to read out

1101
01:05:16,160 --> 01:05:16,640
disclaimer.