Is India the new China? (Ian Roper Interview)

1
00:00:00,080 --> 00:00:02,960
Righto money miners.
The China commodity theme will

2
00:00:02,960 --> 00:00:05,280
continue in this episode.
We've got an absolute RIP

3
00:00:05,280 --> 00:00:09,000
snorter coming in from Japan and
the theme of MMS being the

4
00:00:09,000 --> 00:00:12,040
greatest mining contractor in
Australia is something that will

5
00:00:12,040 --> 00:00:15,200
never end, especially
considering they got gear ready

6
00:00:15,200 --> 00:00:18,240
to go to move dirt right now.
Like there's like you think open

7
00:00:18,240 --> 00:00:21,880
pit, you think MMS goes
together?

8
00:00:21,880 --> 00:00:24,200
You bloody need to know like a
glove.

9
00:00:24,920 --> 00:00:27,880
Don't This could be the last
last in our brief series.

10
00:00:27,880 --> 00:00:29,840
Endeavour to China for a little
while, Maddie, but we'll be

11
00:00:29,840 --> 00:00:31,920
back.
Alright mate, we're as many

12
00:00:31,920 --> 00:00:33,640
episodes as people in the
country.

13
00:00:33,640 --> 00:00:36,360
It's bloody, it's bloody great,
but boys, I.

14
00:00:36,360 --> 00:00:38,840
Think we could we could brand
this one with an Indian flag?

15
00:00:38,840 --> 00:00:41,120
Just about yes.
Strong, strong pick.

16
00:00:41,120 --> 00:00:44,680
Yeah, right.
So today, money more as we have

17
00:00:44,720 --> 00:00:49,440
Ian Roper from Asterisk
Advisory, previously worked, but

18
00:00:49,440 --> 00:00:53,360
he's CLSI Macquarie mate.
He covers bulks, base metals,

19
00:00:53,360 --> 00:00:58,440
new energy, materials and live
from Tokyo, probably possibly

20
00:00:58,440 --> 00:01:01,200
the greatest city in the world.
Mate, welcome onto the show.

21
00:01:02,000 --> 00:01:03,920
Cheers.
Yeah, yeah, certainly the good

22
00:01:03,920 --> 00:01:06,880
city, yeah.
Just don't mind lifting up a bit

23
00:01:06,880 --> 00:01:10,000
of sashimi while you're there
mate, just to keep a bit of a

24
00:01:10,040 --> 00:01:12,600
Japanese feel to it.
Take out for you here.

25
00:01:12,680 --> 00:01:15,720
Boys, you want to give a bit of
an intro of what today's episode

26
00:01:15,720 --> 00:01:19,360
will all be about?
Yeah, let's let's RIP in.

27
00:01:19,360 --> 00:01:22,080
So Maddie, as you know, we've
been going on a bit of a, a

28
00:01:22,080 --> 00:01:24,960
China venture, a bit of a
commodities broader sort of

29
00:01:25,320 --> 00:01:29,120
venture, given all the the
stimulus chat that we've seen in

30
00:01:29,480 --> 00:01:33,000
in recent weeks.
And this is another one, Ian's

31
00:01:33,000 --> 00:01:35,480
been recommended to us by an
Aussie fund manager.

32
00:01:35,480 --> 00:01:40,120
So thought we'd get in touch and
get the over overview from a

33
00:01:40,120 --> 00:01:44,240
commodity strategist and that is
very much Ian's background.

34
00:01:44,240 --> 00:01:47,480
So where I want to start the
conversation, Ian, is the

35
00:01:47,480 --> 00:01:49,520
stimulus, it's the, it's the
elephant in the room, the one we

36
00:01:49,520 --> 00:01:53,760
have to kind of talk about.
And you told me when we were

37
00:01:53,760 --> 00:01:56,440
chatting before the call that
you'd, you'd had a bit of a, a

38
00:01:56,440 --> 00:01:59,360
pick on China prior to the year
starting.

39
00:01:59,360 --> 00:02:02,440
And then there was a bit of
sentiment and perhaps sentiment

40
00:02:02,440 --> 00:02:06,920
changing in and around LME week
last week or the week before.

41
00:02:06,920 --> 00:02:10,759
So I'm keen to hear what you're
kind of picking up, how the the

42
00:02:10,759 --> 00:02:13,360
mood is on the back of the
stimulus that we've seen in

43
00:02:13,360 --> 00:02:14,880
China.
Yeah.

44
00:02:14,880 --> 00:02:17,440
So, so China's had a really
tough year this year.

45
00:02:17,840 --> 00:02:19,360
It started at the end of last
year.

46
00:02:19,360 --> 00:02:22,280
She made it very clear that it's
unhappy local governments have

47
00:02:22,280 --> 00:02:24,840
just been spending too much
money, too heavily indebted.

48
00:02:25,120 --> 00:02:29,480
So there was a big clamp down on
local government debt spending

49
00:02:29,480 --> 00:02:33,720
etcetera, LGF, ES, especially
the off balance sheet lending

50
00:02:33,720 --> 00:02:35,600
they were using to fund a lot of
infrastructure.

51
00:02:35,960 --> 00:02:39,280
So there's one key data series I
look at, which is the newly

52
00:02:39,280 --> 00:02:42,160
signed construction contracts
quarterly data series that was

53
00:02:42,160 --> 00:02:46,760
running down 5 trillion RMB,
about 10% year on year in Q4

54
00:02:46,760 --> 00:02:48,840
last year.
And that was a very clear

55
00:02:48,840 --> 00:02:51,280
indication that the
infrastructure this year was was

56
00:02:51,280 --> 00:02:53,360
just going to be down sharply.
Yeah.

57
00:02:53,720 --> 00:02:57,760
So cement demands been running
down double digits all year,

58
00:02:57,920 --> 00:03:01,040
steel demands down about 5%.
You know, what I call the old

59
00:03:01,040 --> 00:03:05,440
economy in China has really been
struggling, but that's not the

60
00:03:05,440 --> 00:03:08,800
whole picture for China.
You know, backs in the 2000s, a

61
00:03:08,800 --> 00:03:11,920
super cycle, it's a rising tide
lifted all boats, right?

62
00:03:11,920 --> 00:03:14,520
Whereas now China's really
seeing a lot of divergent

63
00:03:14,520 --> 00:03:16,880
because you've got the old
economy, housing,

64
00:03:16,880 --> 00:03:19,320
infrastructure, yes, very, very
weak.

65
00:03:19,320 --> 00:03:22,040
They've just been in decline for
the last few years.

66
00:03:22,040 --> 00:03:24,280
That's where things like like
steel demand have suffered

67
00:03:24,280 --> 00:03:27,920
especially, but also we've got
the new economy direct, China's

68
00:03:28,360 --> 00:03:31,960
massive investment in EVs, in
renewable energy.

69
00:03:32,240 --> 00:03:33,920
And that's where the base metal
demand is.

70
00:03:33,920 --> 00:03:36,920
And that's why you're seeing
this divergent where steel

71
00:03:36,920 --> 00:03:40,320
demand running down 5% this
year, but aluminium consumption

72
00:03:40,320 --> 00:03:42,920
is still growing 5%.
Copper demand is going to be up

73
00:03:42,920 --> 00:03:45,000
3 or 4%.
So you've got a real kind of

74
00:03:45,000 --> 00:03:47,760
split in China between old and
new.

75
00:03:47,800 --> 00:03:53,480
And that all comes back to to
XI's version of of Chinese

76
00:03:54,600 --> 00:03:57,800
modernisation as he calls it.
She's new version of Chinese

77
00:03:57,800 --> 00:04:02,600
modernisation, which is that she
wants the Chinese to invest

78
00:04:02,600 --> 00:04:06,440
heavily on the technology side
and upgrading manufacturing,

79
00:04:06,440 --> 00:04:09,200
going high end, leading the
world in all the technologies,

80
00:04:09,200 --> 00:04:11,480
EVs, etcetera.
And you see they're doing a good

81
00:04:11,480 --> 00:04:16,079
job on that, whereas the old
economy, you know that that's

82
00:04:16,079 --> 00:04:17,600
just something that they're not
focused on so.

83
00:04:17,959 --> 00:04:20,480
Ian, given given your role,
speaking with plenty of

84
00:04:20,680 --> 00:04:25,040
institutions out there, what
what are the the traders in and

85
00:04:25,040 --> 00:04:28,200
around Asia making of the
stimulus?

86
00:04:30,200 --> 00:04:32,960
So there's still a lot of
scepticism about the stimulus.

87
00:04:32,960 --> 00:04:36,160
So, yeah, China is now very
different to what it used to be,

88
00:04:36,160 --> 00:04:38,520
right?
In the old days, Beijing would

89
00:04:38,520 --> 00:04:41,400
say stimulus and everyone would
jump and off to the races.

90
00:04:41,400 --> 00:04:46,200
You know, 2000 and nine, 2016
markets moved very rapidly.

91
00:04:46,760 --> 00:04:49,640
This time around, quite
different now, I'd say the

92
00:04:49,880 --> 00:04:53,920
Chinese peoples have been very
depressed since COVID basically.

93
00:04:54,440 --> 00:04:56,480
You've had a number of different
angles there.

94
00:04:57,200 --> 00:05:00,800
Not least she's the corruption
clamped down, right, making life

95
00:05:00,800 --> 00:05:03,920
more uncertain, especially for
entrepreneurs and business

96
00:05:03,920 --> 00:05:07,280
people, finance people.
So that's kind of hit a lot of

97
00:05:07,400 --> 00:05:11,080
investigative confidence within
China, both on the manufacturing

98
00:05:11,080 --> 00:05:16,720
side, investing side.
For the last 20 years, people

99
00:05:16,720 --> 00:05:20,240
have been used to wage growth.
You know, jobs were plentiful.

100
00:05:20,240 --> 00:05:21,960
You know, people were getting
richer all the time.

101
00:05:21,960 --> 00:05:25,360
That's really kind of come to an
end with the downturn we've had

102
00:05:25,360 --> 00:05:27,920
since 2020 and all the COVID
restrictions.

103
00:05:29,560 --> 00:05:32,720
And so that's where you've got a
lot of people that are feeling,

104
00:05:32,720 --> 00:05:36,200
you know, my house price is not
going up anymore, wage incomes

105
00:05:36,240 --> 00:05:38,600
growth not there anymore.
And that's why consumers have

106
00:05:38,600 --> 00:05:41,520
been miserable and not spending
and therefore manufacturers have

107
00:05:41,520 --> 00:05:44,600
been miserable and not investing
in new manufacturing either.

108
00:05:45,000 --> 00:05:48,000
So that's the kind of weakness
we've been suffering from really

109
00:05:48,000 --> 00:05:52,120
since since COVID.
And Beijing's been trying to

110
00:05:52,160 --> 00:05:54,840
cheer people up for the last
couple of years.

111
00:05:54,840 --> 00:05:57,760
And that's where it's been, you
know, so different to previously

112
00:05:57,760 --> 00:06:01,600
that the word stimulus has been
too overused now that we've seen

113
00:06:01,600 --> 00:06:05,040
numerous little stimuli, I
suppose, over the over the last

114
00:06:05,320 --> 00:06:07,480
couple of years.
And they're always tweaking

115
00:06:07,480 --> 00:06:11,200
housing restrictions and trying
to loosen things at the margin.

116
00:06:11,920 --> 00:06:14,240
And then it just falls flat.
You know, it's not enough to get

117
00:06:14,240 --> 00:06:17,920
things moving.
So I've been very dismissive of

118
00:06:17,920 --> 00:06:21,960
the stimulus headlines that
we've seen through the year

119
00:06:21,960 --> 00:06:24,400
until this latest one at the end
of September.

120
00:06:24,400 --> 00:06:25,840
And this really is a shift
change.

121
00:06:26,040 --> 00:06:29,800
To me, this is very clearly a
strong change in direction where

122
00:06:29,800 --> 00:06:32,360
Beijing's just said, look,
growth is just too weak now.

123
00:06:32,680 --> 00:06:35,240
Consumers are too miserable.
They're not spending,

124
00:06:35,400 --> 00:06:38,560
manufacturers are not investing.
And we're really struggling to

125
00:06:38,560 --> 00:06:41,080
hit the targets here.
So yes, the green economy is

126
00:06:41,080 --> 00:06:44,280
doing really well, but we still
need the consumers to be

127
00:06:44,280 --> 00:06:46,200
spending.
We still need the manufacturers

128
00:06:46,480 --> 00:06:49,200
to be investing and having a
more optimistic outlook.

129
00:06:49,800 --> 00:06:52,120
So you've really seen seen a big
shift.

130
00:06:52,880 --> 00:06:57,120
But at the same time, they're
still constrained by she's kind

131
00:06:57,120 --> 00:07:01,560
of reluctance to go too heavy on
the leverage side of things.

132
00:07:01,880 --> 00:07:04,880
So this is not like old
fashioned stimulus about the

133
00:07:04,880 --> 00:07:07,960
gloves are off, you know, just
money and spend on anything.

134
00:07:08,000 --> 00:07:11,080
So they're they're she's still
determined not to do a bridges

135
00:07:11,080 --> 00:07:13,160
to nowhere policy, right.
They're not just going to build

136
00:07:13,160 --> 00:07:15,000
infrastructure for
infrastructure's sake.

137
00:07:15,000 --> 00:07:19,200
It has to be show some kind of
economic return still and the

138
00:07:19,200 --> 00:07:20,760
housing market, that's the big
issue.

139
00:07:21,040 --> 00:07:24,480
So one fantastic step on the
housing market since China

140
00:07:24,480 --> 00:07:27,800
privatised the housing market in
1999.

141
00:07:27,800 --> 00:07:29,520
You know, prior to that it was
all communism.

142
00:07:29,520 --> 00:07:33,160
It was all allocated housing.
It's only been a private market

143
00:07:33,160 --> 00:07:36,120
since 1999.
They've actually built more than

144
00:07:36,120 --> 00:07:41,480
one apartment for every urban
family in 25 years, right?

145
00:07:41,480 --> 00:07:43,200
That's ridiculous.
You know, some of us live in 100

146
00:07:43,200 --> 00:07:44,960
year old houses in the rest of
the world.

147
00:07:45,280 --> 00:07:49,760
China's literally built the
entire urban housing stock in 25

148
00:07:49,760 --> 00:07:52,840
years.
So that's why the policy for the

149
00:07:52,840 --> 00:07:55,880
last few years has been, Oh
dear, look at the demographics.

150
00:07:55,880 --> 00:07:57,480
We've built far too much
already.

151
00:07:57,640 --> 00:08:00,480
We'd better stop building it.
We can't continue at this kind

152
00:08:00,480 --> 00:08:02,920
of pace.
So it's about better utilising

153
00:08:02,920 --> 00:08:06,960
what they've got and not
building so many new ones.

154
00:08:07,120 --> 00:08:10,120
So that's why you've seen such a
drop off in in housing in a new

155
00:08:10,600 --> 00:08:13,360
new housing constructions are
running at about 1/3 of the peak

156
00:08:13,360 --> 00:08:17,280
levels in the late twenty 10s.
So that's again something that's

157
00:08:17,280 --> 00:08:20,440
not going to come back, right.
So they want to stimulate the

158
00:08:20,440 --> 00:08:21,760
consumers.
They want to get the

159
00:08:21,760 --> 00:08:24,400
manufacturers on the
entrepreneurs investing and

160
00:08:24,400 --> 00:08:27,920
people feeling good.
But she's still reluctant to let

161
00:08:27,920 --> 00:08:32,000
the local governments spend more
money recklessly to boost the

162
00:08:32,000 --> 00:08:34,520
housing market and get
developers building more

163
00:08:34,520 --> 00:08:36,240
apartments.
You know, those bits of the old

164
00:08:36,240 --> 00:08:39,039
economy are still things that
they're holding back there.

165
00:08:39,480 --> 00:08:41,919
And that's where you're getting
kind of this these mixed

166
00:08:41,919 --> 00:08:46,360
conceptions and kind of lack of
belief in stimulus where a lot

167
00:08:46,360 --> 00:08:48,760
of people are still looking for
the old fashioned stimulus

168
00:08:48,760 --> 00:08:50,800
infrastructure and housing.
It's just not happening.

169
00:08:51,160 --> 00:08:54,480
Whereas the kind of this new
stimulus is all about trying to

170
00:08:54,480 --> 00:08:57,000
get confidence back.
And personally, I think they'll

171
00:08:57,000 --> 00:08:58,600
get there.
They'll they'll be able to raise

172
00:08:58,600 --> 00:09:01,120
the confidence.
You will see consumers coming

173
00:09:01,120 --> 00:09:03,600
out now spending more money.
Hopefully we'll see a pick up in

174
00:09:03,600 --> 00:09:06,960
investment levels domestically
and then for metals that could

175
00:09:06,960 --> 00:09:08,840
could well trigger a restocking
cycle.

176
00:09:09,400 --> 00:09:11,480
That would be the real upside
for metals prices.

177
00:09:11,480 --> 00:09:13,840
If you then get all of the
manufacturers restocking, you

178
00:09:13,840 --> 00:09:16,920
then get the traders restocking.
You get a lot of belief and

179
00:09:16,920 --> 00:09:19,360
excitement heading into Chinese
New Year next year that, Oh

180
00:09:19,400 --> 00:09:23,000
yeah, 2025 is going to be much
better than 2024 and off to the

181
00:09:23,000 --> 00:09:25,920
races we go.
When when you say consumer, are

182
00:09:25,920 --> 00:09:28,840
you referring to Chinese
consumers or international

183
00:09:28,840 --> 00:09:32,040
consumers?
Oh, no, Chinese consumers, yeah.

184
00:09:32,080 --> 00:09:34,760
So obviously one of the.
Yeah, sorry.

185
00:09:34,760 --> 00:09:37,680
So if that's the case, like how
much of China is made up of the

186
00:09:37,960 --> 00:09:43,000
the low income Chinese part of
the population, that is

187
00:09:43,000 --> 00:09:46,200
obviously why everything is so
cheap to buy here because of the

188
00:09:46,200 --> 00:09:49,720
cheap labour.
How much of that is made up, how

189
00:09:49,720 --> 00:09:51,560
much of China is made up of that
group?

190
00:09:51,560 --> 00:09:54,200
And if so, like as I assume they
can't spend much more because

191
00:09:54,200 --> 00:09:59,320
they earn nothing so.
Yeah, I mean, the, the, the big

192
00:09:59,320 --> 00:10:01,920
issue since COVID is that the
savings rates are up so much,

193
00:10:02,200 --> 00:10:03,840
right?
Because, yeah, for the last 20

194
00:10:03,840 --> 00:10:05,640
years, you have rising house
prices.

195
00:10:05,640 --> 00:10:08,320
Why is it rising wage growth?
People felt they were getting

196
00:10:08,320 --> 00:10:11,840
richer and happy to spend.
And then since COVID, you've

197
00:10:11,880 --> 00:10:14,200
seen, all you've seen is the
savings rates going up and up

198
00:10:14,200 --> 00:10:17,200
and up because people are just
have a lack of belief in the

199
00:10:17,200 --> 00:10:18,800
future.
They don't see that they're

200
00:10:18,800 --> 00:10:20,200
going to be better off in five
years.

201
00:10:20,200 --> 00:10:22,600
So everyone's kind of hoarding
cash now.

202
00:10:22,600 --> 00:10:25,440
The big problems in China that
you have a structurally the lack

203
00:10:25,440 --> 00:10:28,320
of a safety net, right, that
most of the medical system is

204
00:10:28,320 --> 00:10:31,280
still private, so you've got to
save money in case you get some

205
00:10:31,280 --> 00:10:34,040
nasty disease.
Most of the education system,

206
00:10:34,320 --> 00:10:37,880
you need a lot of private money
as well for, for all the extra,

207
00:10:37,880 --> 00:10:40,560
you know, tutoring and different
schools and things.

208
00:10:41,360 --> 00:10:44,720
So there's a lot of reasons why
the Chinese always been very

209
00:10:44,720 --> 00:10:49,000
conservative and tend to save
very heavily for a rainy day.

210
00:10:49,400 --> 00:10:52,720
So there's two aspects that
Beijing can look at to try and

211
00:10:52,720 --> 00:10:55,400
get the consumer spending again.
Number one is obviously the

212
00:10:55,400 --> 00:10:58,720
confidence factor of get them
believing that, you know, the

213
00:10:58,720 --> 00:11:01,480
economy will be good, you will
be able to make more money next

214
00:11:01,480 --> 00:11:03,840
year.
So feel free to to go out and

215
00:11:03,840 --> 00:11:07,040
spend today.
And the other thing is, is

216
00:11:07,040 --> 00:11:10,160
potentially reforms around
pensions, health care,

217
00:11:10,400 --> 00:11:14,080
education, who Co reform, you
know, the registration system,

218
00:11:14,080 --> 00:11:15,880
whether you're in the city or
the countryside.

219
00:11:16,600 --> 00:11:19,120
So if they can strengthen some
of the social safety net, that's

220
00:11:19,120 --> 00:11:21,800
certainly something to watch out
for is more structural reforms

221
00:11:21,800 --> 00:11:23,720
that could try and get the
consumer spending more.

222
00:11:24,720 --> 00:11:28,640
Ian, you, you spoke about making
the most of the the property

223
00:11:28,640 --> 00:11:31,320
that they've got and that kind
of doesn't, doesn't sound too

224
00:11:31,520 --> 00:11:34,560
great for overall demand for
commodities.

225
00:11:34,560 --> 00:11:37,160
How are you thinking about that?
Yeah.

226
00:11:37,200 --> 00:11:40,520
So start of the year, I said
that I'm very bearish on on the

227
00:11:40,520 --> 00:11:42,440
old economy, on infrastructure,
on housing.

228
00:11:42,440 --> 00:11:46,800
I think steel demand will be
down 3% this year, but I still

229
00:11:46,800 --> 00:11:50,040
think that copper and aluminium
demand will be +3 or so because

230
00:11:50,040 --> 00:11:54,160
the green economy is doing.
And that's something which even

231
00:11:54,160 --> 00:11:57,560
with the stimulus coming
through, I still maintain those

232
00:11:57,680 --> 00:12:00,800
that split in the economy will
maintain.

233
00:12:00,800 --> 00:12:03,160
And we'll see a lot of
differentiation between

234
00:12:03,160 --> 00:12:06,240
different kind of metals
consumption in the coming years.

235
00:12:06,440 --> 00:12:10,520
So yes, I don't see a rebound in
steel demand for example, next

236
00:12:10,520 --> 00:12:11,480
year.
I think, you know,

237
00:12:12,200 --> 00:12:15,280
infrastructure is probably not
going to have a similar drop to

238
00:12:15,280 --> 00:12:17,800
this year, probably come starts
to flatten out.

239
00:12:17,920 --> 00:12:21,000
Equally housing's probably not
taking another leg down now, but

240
00:12:21,000 --> 00:12:24,200
it's unlikely to recover.
So steel demand trajectory

241
00:12:24,240 --> 00:12:28,000
absolutely doesn't look very
impressive, but the renewables

242
00:12:28,000 --> 00:12:31,400
build out, the EVs roll out.
And then, yeah, in terms of

243
00:12:31,400 --> 00:12:34,440
housing stimulus that you are
seeing is all about completions.

244
00:12:34,880 --> 00:12:37,600
It's about buying up unsold
units for social housing or

245
00:12:37,600 --> 00:12:40,200
renovating old units.
So that still means, you know,

246
00:12:40,200 --> 00:12:43,680
rewiring, installing new
appliances, etcetera, maybe

247
00:12:43,680 --> 00:12:45,360
putting solar panels on the
roofs.

248
00:12:46,320 --> 00:12:47,920
So there's still a lot of metals
demand.

249
00:12:48,040 --> 00:12:50,960
It's just it's not steel.
It's going to be more aluminium,

250
00:12:51,080 --> 00:12:53,640
copper, that kind of thing.
Yeah, it's very, very

251
00:12:53,640 --> 00:12:57,080
interesting.
The whole, you know, consumer

252
00:12:57,080 --> 00:13:00,640
stimulus in China, if you think
of it from a like an Australian

253
00:13:00,640 --> 00:13:06,880
landscape, don't think we need
any consumer stimulus for mining

254
00:13:06,880 --> 00:13:09,800
companies to know that Grounded
needs to build the mining camp.

255
00:13:10,320 --> 00:13:11,600
Well, that's what you don't
need.

256
00:13:11,880 --> 00:13:15,040
Like they just know that is the
right thing to do.

257
00:13:15,040 --> 00:13:18,440
Like as we described last week,
like just from the new law that

258
00:13:18,960 --> 00:13:21,720
you have to like have a builder
with Sicilian background to know

259
00:13:21,720 --> 00:13:24,280
that you're going to get the
quality, the longevity, the

260
00:13:24,280 --> 00:13:27,240
expertise for any piece of
infrastructure on your mind

261
00:13:27,240 --> 00:13:29,200
site.
And that would be limited to

262
00:13:29,200 --> 00:13:32,360
Grounded only.
You've seen pictures of these

263
00:13:32,360 --> 00:13:34,120
camps, Maddie.
They are the worst.

264
00:13:34,840 --> 00:13:36,720
Jesus.
Cross their bloody.

265
00:13:36,880 --> 00:13:40,080
Extra room like my great gym
facilities.

266
00:13:40,400 --> 00:13:44,680
I just don't think you can beat
what can be built by the team at

267
00:13:44,680 --> 00:13:46,520
Grounded.
I'd actually say they.

268
00:13:46,640 --> 00:13:50,040
Contacted the Coburn local
council and to get permission to

269
00:13:50,040 --> 00:13:53,280
knock down my house and get a
grounded camp in to replace it

270
00:13:53,320 --> 00:13:55,520
because they're just even better
than my house.

271
00:13:55,640 --> 00:14:00,360
Yeah, it's it's, that is just
the the quality of craftsmanship

272
00:14:01,240 --> 00:14:05,120
and the attention to detail,
Travis, that Paul Natali and the

273
00:14:05,120 --> 00:14:07,880
grounded team put towards these
mining camps is just

274
00:14:07,880 --> 00:14:10,400
unparalleled in the industry.
So like.

275
00:14:10,640 --> 00:14:12,720
Get yourself a Crown Plaza out
in the Bush.

276
00:14:13,080 --> 00:14:16,000
Oh mate, if you could tower
Hilton up it wouldn't even be as

277
00:14:16,000 --> 00:14:19,520
good as a grounded camp.
So mate, and we give you direct

278
00:14:19,520 --> 00:14:23,200
access to Paul with his email in
the show notes.

279
00:14:23,200 --> 00:14:26,720
Flick him a message and ask for
a bloody best mining camp in the

280
00:14:26,720 --> 00:14:31,240
history of mining and camps.
One of the reasons that you're

281
00:14:32,120 --> 00:14:35,840
that the the consumer has such
sort of negative sentiment

282
00:14:35,960 --> 00:14:38,840
towards, you know, investing
domestically is is because a lot

283
00:14:38,840 --> 00:14:41,680
of the policy settings have
actually created an environment

284
00:14:41,680 --> 00:14:46,280
where these, you know, these
downstream, you know, businesses

285
00:14:46,760 --> 00:14:50,040
are unprofitable because they
they have to run kind of under

286
00:14:50,040 --> 00:14:53,360
capacity or utilisation.
There's too many of them that

287
00:14:53,360 --> 00:14:55,560
exist because the local
governments are all have all

288
00:14:55,560 --> 00:14:59,440
have their own steel mill, have
their own yeah, lithium refinery

289
00:14:59,760 --> 00:15:02,520
in those sort of sensors and
hence kind of don't have the

290
00:15:02,520 --> 00:15:06,120
efficiencies and aren't
necessarily very profitable.

291
00:15:06,560 --> 00:15:09,640
But how do you think about the
risk that the policy setting

292
00:15:09,880 --> 00:15:14,880
will actually result in fewer
number of remaining steel mills

293
00:15:14,880 --> 00:15:19,440
actually being actually
operating and a focus on

294
00:15:19,480 --> 00:15:23,120
profitability in that in that
downstream again and the

295
00:15:23,120 --> 00:15:25,520
implications of that could have
for example in the iron ore

296
00:15:25,520 --> 00:15:27,840
market?
Yeah, Well, that's certainly

297
00:15:27,840 --> 00:15:30,760
something that's that's some
discussion at the moment around

298
00:15:30,760 --> 00:15:33,360
should there be another wave of
kind of supply cyber falls,

299
00:15:33,360 --> 00:15:35,200
right.
That was very successful there,

300
00:15:35,200 --> 00:15:38,440
2016, 1718.
And so you saw a lot of kind of

301
00:15:38,440 --> 00:15:41,960
redundant capacity being closed
and actually steel mills had had

302
00:15:41,960 --> 00:15:44,720
good margins there and your
commodity prices were generally

303
00:15:44,720 --> 00:15:47,000
higher.
So there's a lot of people in

304
00:15:47,000 --> 00:15:49,840
the industry who are calling for
same again, you know, let's

305
00:15:49,840 --> 00:15:51,560
let's have another round of
cuts.

306
00:15:52,200 --> 00:15:55,360
But at the same time, the
central government's conflicted

307
00:15:55,360 --> 00:15:58,560
of, of, you know, on the one
hand, they're willing to take

308
00:15:58,560 --> 00:16:00,360
the pain for the longer term
gain.

309
00:16:00,360 --> 00:16:03,280
You know, we're not short term
kind of politicians just looking

310
00:16:03,280 --> 00:16:05,120
for a, for a good story for one
or two years.

311
00:16:05,120 --> 00:16:06,760
We're trying to be structurally
sound here.

312
00:16:06,760 --> 00:16:11,840
We don't want too much debt and
too much, too much negativity

313
00:16:11,840 --> 00:16:14,800
overhanging the economy.
But on the other hand, they're

314
00:16:14,800 --> 00:16:17,080
showing a real reluctance to
take too much pain.

315
00:16:17,600 --> 00:16:20,560
So you've got huge number of
zombie companies in China,

316
00:16:20,640 --> 00:16:22,800
right?
And the triple R cuts, the

317
00:16:22,800 --> 00:16:26,080
interest rate cuts we saw for
the banks in this stimulus that

318
00:16:26,080 --> 00:16:29,120
read more like a bank bailout
because the banks are clearly

319
00:16:29,120 --> 00:16:31,800
struggling with a lot of
unrealised MPLS and just having

320
00:16:31,800 --> 00:16:35,240
to endlessly roll over debts.
And and you know, the

321
00:16:35,240 --> 00:16:40,040
government's reluctant to push a
lot of companies to the end edge

322
00:16:40,040 --> 00:16:43,480
and actually deal with the
redundancies and the resulting

323
00:16:43,480 --> 00:16:46,760
problems because there's kind of
too much pain from that sense

324
00:16:47,120 --> 00:16:49,840
that was would result there.
So they really start between a

325
00:16:49,840 --> 00:16:52,080
rock and a hard place at the
moment.

326
00:16:52,800 --> 00:16:55,400
But I do think there there's
decent odds that perhaps you

327
00:16:55,400 --> 00:16:58,760
will see renewed talk of things
like supply side reforms and

328
00:16:59,080 --> 00:17:02,240
push to perhaps close capacity
in some of the Heavy Industries

329
00:17:02,240 --> 00:17:05,480
like steel.
And certainly the talk of that

330
00:17:05,480 --> 00:17:09,200
could help help prices and kind
of people heart back to the good

331
00:17:09,200 --> 00:17:12,079
old days of supply side reform
and they were making big margins

332
00:17:12,079 --> 00:17:14,280
and things.
So the industry itself is

333
00:17:14,280 --> 00:17:19,000
certainly encouraging that talk.
Have you got an explicit view on

334
00:17:19,000 --> 00:17:22,920
where you see iron ore over the
next 135 years?

335
00:17:25,200 --> 00:17:27,680
Well, iron ore has been a real
conundrum this year.

336
00:17:27,680 --> 00:17:30,040
I mean you've seen very strong
supply growth right now.

337
00:17:30,320 --> 00:17:34,320
Imports in China are going to be
up 60 or 70 million tonnes this

338
00:17:34,320 --> 00:17:37,120
year.
India's annualising up from from

339
00:17:37,120 --> 00:17:40,880
40 odd million last year to 60.
Plus Brazil's had a good year.

340
00:17:41,080 --> 00:17:43,440
Australian exports are up
decently as well.

341
00:17:43,440 --> 00:17:45,720
You've still got some new supply
coming in Onslow and such

342
00:17:45,720 --> 00:17:48,400
ramping up.
So there's been plenty of iron

343
00:17:48,400 --> 00:17:50,840
ore supply.
And yet steel demand in China

344
00:17:50,840 --> 00:17:53,160
has been running down about 5%
this year.

345
00:17:53,400 --> 00:17:55,920
Now, obviously they've been
exporting a bit more steel, so

346
00:17:55,920 --> 00:17:58,760
keeping the steel production not
quite down that much.

347
00:17:58,760 --> 00:18:01,280
But still the iron ore port
inventures have been rising

348
00:18:01,680 --> 00:18:04,120
throughout the year.
There's no shortage of iron ore.

349
00:18:04,480 --> 00:18:07,000
And it's, it's, you know,
amazing to me how the price

350
00:18:07,000 --> 00:18:09,600
hasn't been weaker.
I've been calling for the price

351
00:18:09,600 --> 00:18:13,680
to fall into kind of the 80s all
year because you know, oil

352
00:18:13,680 --> 00:18:16,960
prices are quite low, freight
rates are not that high and the

353
00:18:16,960 --> 00:18:19,640
grade discounts are very narrow.
That's the most important thing

354
00:18:19,640 --> 00:18:22,440
for the iron ore cost curve.
Mills are not making money.

355
00:18:22,440 --> 00:18:26,400
They're happy to buy low grade
so that that essentially

356
00:18:26,400 --> 00:18:28,760
suppresses the top of the cost
curve, which is dominated by all

357
00:18:28,760 --> 00:18:32,320
the low grade suppliers.
So from that perspective, you

358
00:18:32,320 --> 00:18:34,880
know, I've been surprised iron
ore's not be weaker.

359
00:18:35,000 --> 00:18:37,680
And then of course on the back
of stimulus, iron ore's the one

360
00:18:37,680 --> 00:18:39,760
that's had the biggest move.
Now the problem we have with the

361
00:18:39,760 --> 00:18:44,880
iron ore market is the price is
just so dominated by this retail

362
00:18:44,880 --> 00:18:48,200
trading in Dalian, right.
You look at the Met coal price,

363
00:18:48,200 --> 00:18:50,760
that's entirely a physical
market and a very liquid 1.

364
00:18:50,760 --> 00:18:53,160
You look at the aluminium market
and that's entirely a physical

365
00:18:53,160 --> 00:18:57,080
market and a very liquid 1.
So those markets tend to be very

366
00:18:57,080 --> 00:19:01,640
depressed or or very kind of
excited, but they definitely

367
00:19:01,640 --> 00:19:05,680
reflect physical changes,
whereas the iron ore market is

368
00:19:05,680 --> 00:19:07,920
just just moves on hot air so
much at the time.

369
00:19:09,040 --> 00:19:12,320
And so that's why our iron ore
went from $89.00 just before

370
00:19:12,320 --> 00:19:15,800
stimulus was announced to 114
within days.

371
00:19:16,800 --> 00:19:19,280
And like I said, stimulus is not
adding steel demand, it's not

372
00:19:19,280 --> 00:19:21,880
adding iron ore consumption.
So that's just a complete

373
00:19:21,880 --> 00:19:24,040
overreaction.
Can you, can you peel into that

374
00:19:24,040 --> 00:19:25,320
a bit?
This is a comment I've heard a

375
00:19:25,320 --> 00:19:28,040
couple of times as we ventured
into the, you know, the, the

376
00:19:28,040 --> 00:19:30,960
China kind of commentary.
And that's the extent to which

377
00:19:31,800 --> 00:19:35,800
there is like Chinese retail
money that massively influences

378
00:19:36,040 --> 00:19:38,680
kind of the the short term
gyrations of some of these like

379
00:19:38,680 --> 00:19:42,520
pretty, pretty hefty markets
that grab headlines here in in

380
00:19:42,520 --> 00:19:44,920
the West.
Yeah.

381
00:19:44,920 --> 00:19:47,840
So I'm, I'm not too sure what
the current numbers are on iron,

382
00:19:47,840 --> 00:19:50,520
but I remember a few interesting
comments over the years.

383
00:19:50,520 --> 00:19:53,520
I mean, the average holding
period on iron ore trades and

384
00:19:53,520 --> 00:19:56,840
Danny Anne was like 2 hours for
for a certain period.

385
00:19:56,920 --> 00:19:58,720
You know it's a real day trading
market.

386
00:20:00,080 --> 00:20:02,960
And there was more trading
activity in the old days,

387
00:20:02,960 --> 00:20:03,960
certainly.
I don't know if it's still

388
00:20:03,960 --> 00:20:06,240
current, but there used to be
more trading activity in the

389
00:20:06,240 --> 00:20:09,120
night session, you know, when
the market would open in the

390
00:20:09,120 --> 00:20:12,320
evening than during the day,
which again, shows it's kind of,

391
00:20:12,320 --> 00:20:14,600
you know, retails people just
trading.

392
00:20:14,600 --> 00:20:16,720
And I don't know how many of
them are trading drunk as well.

393
00:20:16,720 --> 00:20:18,880
So that probably accounts for
some of the generations.

394
00:20:19,160 --> 00:20:20,600
Is this the futures?
Market is.

395
00:20:23,360 --> 00:20:25,520
Is this the futures market
you're you're referring to?

396
00:20:25,520 --> 00:20:27,440
Yeah, the Dalian Dalian
exchange, yeah.

397
00:20:29,200 --> 00:20:33,320
Wow, that's that's amazing.
And and that's not seen in most

398
00:20:33,320 --> 00:20:35,040
other commodities.
Is that right?

399
00:20:35,680 --> 00:20:37,720
It's extreme on, on, on all,
yeah.

400
00:20:37,720 --> 00:20:39,560
It's just Dino is just
dominated.

401
00:20:39,560 --> 00:20:42,600
You know, the Dalian volume is
much, much greater than the SGX

402
00:20:42,600 --> 00:20:46,560
volume, which is kind of like
the the Western trading market.

403
00:20:47,200 --> 00:20:49,520
But then even on the SGX volume,
I think an awful lot of that's

404
00:20:49,520 --> 00:20:54,280
kind of Chinese arc trade as
well following the Dalian moves.

405
00:20:55,400 --> 00:20:59,200
Whereas, yeah, when you look at
the base metals, obviously LME

406
00:20:59,320 --> 00:21:03,520
comics, they've still got
massive volumes outside of the

407
00:21:03,520 --> 00:21:06,400
SHFE market.
And so that's where you tend to

408
00:21:06,400 --> 00:21:08,840
see the base metals a less
volatile because I'd say you've

409
00:21:08,840 --> 00:21:12,840
got more international trading
money that's offsetting any kind

410
00:21:12,840 --> 00:21:15,040
of retail in China.
Whereas iron ore just doesn't

411
00:21:15,040 --> 00:21:16,760
have an offset.
You know, it's that Dalian

412
00:21:16,760 --> 00:21:22,080
market just dominates.
If if we change tech in India is

413
00:21:22,080 --> 00:21:24,840
a country that a lot of people
have spoken about the, the sort

414
00:21:24,840 --> 00:21:28,880
of cool narrative and you, you
seem to hold that view as well.

415
00:21:28,880 --> 00:21:32,240
Maybe I'll just give you a, a
sort of broad angle to, to start

416
00:21:32,240 --> 00:21:34,880
with what you're thinking of
India and then came to get into

417
00:21:35,200 --> 00:21:38,360
METCO specifically.
Yeah.

418
00:21:38,360 --> 00:21:41,280
So when I was living in China in
the 2000s, you know, there were

419
00:21:41,280 --> 00:21:44,240
all these bullish Chindia
reports doing the rounds of,

420
00:21:44,240 --> 00:21:46,720
hey, India's got a billion
people that can follow China.

421
00:21:46,960 --> 00:21:48,480
And I was always highly
sceptical, right?

422
00:21:48,480 --> 00:21:50,640
And I went to India a few times
in the 2000s.

423
00:21:50,640 --> 00:21:53,600
It's nothing like China and
nothing could ever get done

424
00:21:53,600 --> 00:21:56,040
there, right?
It was kind of bureaucracy or

425
00:21:56,360 --> 00:21:58,600
land access rights.
So there are a lot of problems

426
00:21:58,600 --> 00:22:02,120
where where just things didn't
progress very quickly, power

427
00:22:02,120 --> 00:22:06,080
availability, etcetera.
Whereas post COVID and I'm

428
00:22:06,080 --> 00:22:08,400
speaking to a lot of my India
contacts and people doing

429
00:22:08,400 --> 00:22:10,280
business there, but they were
saying, well, things have really

430
00:22:10,280 --> 00:22:12,480
changed, you know, demands
jumped up and looks really

431
00:22:12,480 --> 00:22:15,120
sustainable.
So I went there again last year

432
00:22:15,120 --> 00:22:18,480
for the first time since 2009,
completely transformed.

433
00:22:18,720 --> 00:22:20,680
It's amazing.
I think Mode has done quite a

434
00:22:20,680 --> 00:22:25,040
few important key changes there.
Number one, he invested a lot in

435
00:22:25,040 --> 00:22:27,840
infrastructure early on.
So India hasn't really suffered

436
00:22:27,840 --> 00:22:31,240
blackouts, brownouts on the
power side since about 2019.

437
00:22:31,400 --> 00:22:34,720
Power supply is plentiful and
they're taking the renewables

438
00:22:34,720 --> 00:22:39,600
from something like 200
gigawatts to 500 gigawatts by

439
00:22:39,600 --> 00:22:42,920
the end of the decade, massive
investment in that.

440
00:22:42,920 --> 00:22:45,840
And they're still adding another
80 gigawatts of thermal power as

441
00:22:45,840 --> 00:22:47,880
well.
So you've got huge investment in

442
00:22:47,880 --> 00:22:49,680
power.
You've had big investment in

443
00:22:49,680 --> 00:22:53,320
airports, like flying around.
It feels just just like, you

444
00:22:53,320 --> 00:22:56,120
know, China or anywhere with
modern airport facilities,

445
00:22:56,120 --> 00:22:59,280
everything works much better,
roads as well, ports.

446
00:22:59,800 --> 00:23:04,200
So you've had a lot of
infrastructure investment early

447
00:23:04,200 --> 00:23:06,480
on as well.
Modi did this cancellation of

448
00:23:06,480 --> 00:23:09,160
all the banknotes when if you
remember that, and they kind of

449
00:23:09,160 --> 00:23:13,240
bought all the banknotes into
the banking system and that's

450
00:23:13,240 --> 00:23:15,720
helped to eliminate a lot of the
corruption because everyone has

451
00:23:15,720 --> 00:23:18,680
bank accounts, a lot less cash
oriented, digital money and

452
00:23:18,680 --> 00:23:21,560
everything.
A lot of the social handouts now

453
00:23:21,560 --> 00:23:24,240
or digital money will direct
into people's bank, bank

454
00:23:24,240 --> 00:23:27,160
accounts as well.
And if you're paying everything

455
00:23:27,160 --> 00:23:30,720
digitally, there's less room for
officials to be dipping their

456
00:23:30,720 --> 00:23:33,680
hands in as well.
Less cash being handled equally,

457
00:23:33,680 --> 00:23:36,680
digitisation of government.
So they've streamlined a lot of

458
00:23:36,680 --> 00:23:40,280
processes, a lot of the forms,
documentation, everything now is

459
00:23:40,280 --> 00:23:41,440
on a system.
It's online.

460
00:23:41,440 --> 00:23:44,640
You're not actually going to a
physical person needing a stamp

461
00:23:44,640 --> 00:23:47,640
or a signature or something.
Again, that's removing a level

462
00:23:47,840 --> 00:23:51,200
of potential corruption,
speeding up the processes with

463
00:23:51,200 --> 00:23:53,720
the paperwork and everything,
you know.

464
00:23:53,800 --> 00:23:57,040
Yeah, bankruptcy reform, a bit
of land access reform and stuff.

465
00:23:57,640 --> 00:24:00,360
And so India's got a number of
key drivers now.

466
00:24:00,360 --> 00:24:02,560
So they keep hiking the
infrastructure budget.

467
00:24:02,560 --> 00:24:04,880
I think they've raised the
infrastructure budget 1/3 every

468
00:24:04,880 --> 00:24:09,040
year for the last three years.
This year it's only up 11% with

469
00:24:09,080 --> 00:24:10,920
the with the budget being a bit
more responsible.

470
00:24:10,920 --> 00:24:13,600
But they've still got big plans
on infrastructure.

471
00:24:13,600 --> 00:24:15,960
They're going to electrify the
entire rail network.

472
00:24:16,560 --> 00:24:20,240
India is already starting to
build a Japanese bullet train

473
00:24:20,240 --> 00:24:22,000
network.
It's the only countryside

474
00:24:22,280 --> 00:24:24,840
country outside of Japan that's
actually going to have bullet

475
00:24:24,840 --> 00:24:28,000
trains, and I think the Japanese
government's lending quite a lot

476
00:24:28,000 --> 00:24:30,000
of the money for that at a state
level.

477
00:24:30,800 --> 00:24:34,800
But yeah, the first one will be
up in in 2026, so don't know.

478
00:24:35,200 --> 00:24:37,640
They have to culturally.
No more sitting on the roof at

479
00:24:37,640 --> 00:24:40,360
400 kilometres an hour.
That'd be a bit of a change, but

480
00:24:40,920 --> 00:24:44,600
should be revolutionised.
They're moving around India with

481
00:24:44,600 --> 00:24:49,000
bullet trains there, as I said,
the renewable energy build out

482
00:24:49,000 --> 00:24:52,400
as well, you know, going up to
500 gigawatts by the end of the

483
00:24:52,400 --> 00:24:54,880
decade.
One of Modi's pledges in the

484
00:24:54,880 --> 00:24:58,280
election was free power for all
the rural households.

485
00:24:58,280 --> 00:25:00,760
So they've already started a
programme this year of 10

486
00:25:00,760 --> 00:25:03,600
million rural houses getting
free solar installations.

487
00:25:03,880 --> 00:25:05,720
So people have got free access
to power.

488
00:25:05,720 --> 00:25:08,880
And then you could charge your
electric bike or something as

489
00:25:08,880 --> 00:25:13,000
well for free.
I'd say big plans on the

490
00:25:13,000 --> 00:25:15,480
infrastructure side and any
other thing that mood is doing a

491
00:25:15,480 --> 00:25:17,720
great job of trying to attract
all the FDI.

492
00:25:18,480 --> 00:25:21,760
So saying to people, why don't
you move your factories out of

493
00:25:21,760 --> 00:25:25,200
China, come to India, so going
to the the freedom loving

494
00:25:25,200 --> 00:25:27,800
democracies and say, hey, we're
a freedom loving democracy.

495
00:25:28,040 --> 00:25:30,840
You should be investing here for
for security of supply.

496
00:25:30,840 --> 00:25:33,640
And then of course mode is at
the BRICS conferences as well.

497
00:25:33,760 --> 00:25:36,760
Good friends with the BRICS guys
get them to invest as well.

498
00:25:37,480 --> 00:25:40,080
So he's doing a good job of kind
of being mates with everyone at

499
00:25:40,080 --> 00:25:42,480
the moment and trying to attract
investment from everywhere.

500
00:25:42,880 --> 00:25:45,880
So that's where India's really
interesting, because India

501
00:25:45,880 --> 00:25:48,320
doesn't really have much of a
manufacturing base at the

502
00:25:48,320 --> 00:25:50,600
moment.
I believe India only produces

503
00:25:50,600 --> 00:25:54,000
about 2% of global goods and
consumes about 4%.

504
00:25:54,720 --> 00:25:57,160
But Mode is really trying to
attract all this investment with

505
00:25:57,160 --> 00:25:59,600
this Made in India scheme.
And you're seeing a lot of big

506
00:25:59,600 --> 00:26:02,440
companies starting to put
factories in India, big

507
00:26:02,440 --> 00:26:04,200
government subsidies encouraging
that.

508
00:26:04,800 --> 00:26:07,720
So yeah, you've basically got
the infrastructure side, the

509
00:26:07,720 --> 00:26:11,320
green energy side and the
manufacturing side all being

510
00:26:11,320 --> 00:26:14,200
built out.
And, and you put that together

511
00:26:14,200 --> 00:26:17,080
and, and it's giving very strong
growth rates for commodities

512
00:26:17,080 --> 00:26:19,400
demand.
So if you think of India versus

513
00:26:19,400 --> 00:26:24,240
China today for steel, you know,
India's 140 million tonnes of

514
00:26:24,240 --> 00:26:27,960
steel production versus China at
a billion, it's about 15% of the

515
00:26:27,960 --> 00:26:30,000
size.
It's growing at about 10% a

516
00:26:30,000 --> 00:26:31,800
year.
Whereas the base metals are more

517
00:26:31,800 --> 00:26:33,560
interesting things like copper
and aluminium.

518
00:26:34,360 --> 00:26:37,960
India's only about a tenth of
the size of China, but it's

519
00:26:37,960 --> 00:26:41,400
growing at a 15% kega, which
looks very sustainable.

520
00:26:42,080 --> 00:26:45,800
So if you think of that for the
world, you know, China's 50% of

521
00:26:45,800 --> 00:26:49,400
global copper demand growing at
3% a year, then that gives us

522
00:26:49,400 --> 00:26:51,800
what, 1 1/2 basis points of
global growth.

523
00:26:52,560 --> 00:26:56,880
Whereas India is only 5% of the
world, but growing at 15% a

524
00:26:56,880 --> 00:26:59,920
year, that's giving us 75 basis
points of global growth.

525
00:27:00,160 --> 00:27:03,760
So India actually in absolute
tonnage terms is about half the

526
00:27:03,760 --> 00:27:06,840
size of China already on an
incremental annual basis.

527
00:27:06,840 --> 00:27:09,840
So it's not just that it's a
nice tailwind for commodities.

528
00:27:09,840 --> 00:27:11,840
I think you can really start to
make a difference now.

529
00:27:12,400 --> 00:27:18,480
Yeah, speaking like about the
rise of India, I guess who, who

530
00:27:18,480 --> 00:27:24,120
do you think is going to rise
first out of India and race,

531
00:27:24,120 --> 00:27:26,400
botany and Australian earthworks
and haulage?

532
00:27:26,960 --> 00:27:29,680
Race botany's already already
risen, You know, India's still

533
00:27:29,680 --> 00:27:34,000
rising well.
Because since IEH is like

534
00:27:34,000 --> 00:27:38,360
anytime expiration V2 like
anytime expiration, I'd call

535
00:27:38,360 --> 00:27:41,160
China and then.
Race India.

536
00:27:41,240 --> 00:27:44,760
Race and IEH are probably going
to be the India which probably

537
00:27:44,760 --> 00:27:46,960
will surpass China.
Rising at a faster rate.

538
00:27:46,960 --> 00:27:48,640
Yeah, yeah.
Wouldn't you think, JD?

539
00:27:49,960 --> 00:27:52,520
I think you've hit the nail on
the head there mate.

540
00:27:52,600 --> 00:27:56,200
The the way I say the vertically
integrated relationship between

541
00:27:56,840 --> 00:27:58,800
anytime exploration in
Australian earthworks and

542
00:27:58,800 --> 00:28:02,280
haulage like Reese is the cake.
Sheamus is the cherry on top.

543
00:28:02,760 --> 00:28:08,360
That's like like between the
earthworks haulage bloody that

544
00:28:08,360 --> 00:28:13,120
can work absolutely remote as
like it's just bat shit crazy

545
00:28:13,120 --> 00:28:16,680
how remote these guys can work
unsupervised with any time

546
00:28:16,680 --> 00:28:19,920
providing the field he's in G OS
to oversee the earthworks, the

547
00:28:19,920 --> 00:28:23,720
rehabilitation, the damn
building all with the expertise

548
00:28:23,720 --> 00:28:28,760
of races decades worth of bloody
earthworks experience.

549
00:28:29,360 --> 00:28:32,440
You just I hope you got the
phone in your hand now.

550
00:28:32,440 --> 00:28:35,680
His numbers in the show notes.
Just like India, Maddie, it's

551
00:28:35,680 --> 00:28:37,440
one you don't want to miss mate.
Just give him a call.

552
00:28:37,520 --> 00:28:39,560
He is the Tendulkar of
earthworks.

553
00:28:40,600 --> 00:28:42,960
I think the the people who've
been like a bit, you know,

554
00:28:42,960 --> 00:28:46,160
trepidatious about certain
commodity markets point to the

555
00:28:46,160 --> 00:28:49,160
growth of India as as sort of
filling a gap that that, you

556
00:28:49,160 --> 00:28:52,200
know, China as China's demand
might sort of, you know, ease in

557
00:28:52,200 --> 00:28:54,320
certain areas.
Is it as simple as, you know,

558
00:28:54,320 --> 00:28:57,040
they seamlessly fill a gap or,
you know, do you think you kind

559
00:28:57,040 --> 00:29:00,880
of have pretty substantial
volatility in in between where

560
00:29:00,920 --> 00:29:02,160
you know things could get a bit
dicey?

561
00:29:03,760 --> 00:29:05,640
I think it's different for
different commodities, right?

562
00:29:05,640 --> 00:29:09,160
So look, the biggest kind of
beneficiary of the Chinese

563
00:29:09,160 --> 00:29:12,440
growth obviously was iron ore
because China just geologically

564
00:29:12,440 --> 00:29:15,520
doesn't have much hematite.
Iron ore had to rely on high

565
00:29:15,520 --> 00:29:18,560
cost magnetite and that's where
it just became so big on the

566
00:29:18,560 --> 00:29:22,760
iron ore import side of things.
Whereas for for India, it's it's

567
00:29:22,760 --> 00:29:25,080
all about met coal, right?
India has an abundance of iron

568
00:29:25,080 --> 00:29:29,840
ore, has an abundance of thermal
coal will be poor quality, but

569
00:29:29,840 --> 00:29:33,440
it has next to no met coal.
So for commodities like met

570
00:29:33,440 --> 00:29:36,520
coal, India is already the
biggest importer in the world,

571
00:29:36,520 --> 00:29:39,680
surpassed Japan a few years ago,
70 million tonnes a year out of

572
00:29:39,680 --> 00:29:41,720
a global market of about 300
million.

573
00:29:42,720 --> 00:29:46,400
But India is going to double its
blast furnace steel capacity by

574
00:29:46,400 --> 00:29:49,960
the end of the decade.
So the met coal imports are

575
00:29:50,280 --> 00:29:53,600
going to be huge, potentially
even even with the green steel

576
00:29:53,600 --> 00:29:58,000
revolution going on in Europe,
North America, North East Asia,

577
00:29:58,000 --> 00:30:00,960
where companies are looking at
closing blast furnaces and

578
00:30:01,400 --> 00:30:04,560
opening Eafs or kind of green
steel basis.

579
00:30:04,800 --> 00:30:08,880
I still think the global met
coal demand grows over 20% in

580
00:30:08,880 --> 00:30:11,840
the next 5 years with very
little supply additions.

581
00:30:11,840 --> 00:30:14,840
So that's where met coal is a
massive beneficiary of the India

582
00:30:14,840 --> 00:30:17,800
story.
Equally, copper, India doesn't

583
00:30:17,800 --> 00:30:21,960
have much copper geologically,
so it's going to be a big

584
00:30:21,960 --> 00:30:25,120
importer of copper as well.
I just had Adani just switched

585
00:30:25,120 --> 00:30:28,280
on the world's largest copper
smelter earlier this year, half

586
00:30:28,280 --> 00:30:31,080
a million tonnes a year.
That's partly why copper TCS are

587
00:30:31,080 --> 00:30:34,360
so low, because India's taking a
lot of the copper concentrates

588
00:30:34,360 --> 00:30:38,280
away from China this year.
Aluminium as well.

589
00:30:38,280 --> 00:30:41,880
At the moment, India's a big
exporter of aluminium primary

590
00:30:41,880 --> 00:30:44,040
and then imports a lot of
aluminium products.

591
00:30:44,360 --> 00:30:46,480
But again, you know, the
aluminium demand growth means

592
00:30:46,480 --> 00:30:48,760
they'll, they'll, they'll be
consuming a lot more of that as

593
00:30:48,760 --> 00:30:51,400
well.
So it's a different story for

594
00:30:51,400 --> 00:30:52,880
different commodities, I think
for India.

595
00:30:53,880 --> 00:30:57,600
Just on, on copper there, Ian,
we've seen a pretty volatile

596
00:30:57,600 --> 00:31:01,880
year in copper prices in in part
because of the the changes in

597
00:31:01,880 --> 00:31:06,400
TCRCS and how they've just
really been been crunched over

598
00:31:06,600 --> 00:31:09,680
2024.
Have you got insight on, on that

599
00:31:09,680 --> 00:31:11,120
sort of trend?
Is that something you expect to

600
00:31:11,120 --> 00:31:12,960
keep going for the for the
foreseeable?

601
00:31:14,600 --> 00:31:15,480
Yeah.
So there's definitely some

602
00:31:15,480 --> 00:31:17,760
interesting things going on in
the copper market this year.

603
00:31:17,760 --> 00:31:20,920
So normally we look at the TCS
as a good lead on refined

604
00:31:20,920 --> 00:31:23,200
prices.
And yeah, if the TCS are tight,

605
00:31:23,200 --> 00:31:25,920
then that means surely the the
refined market's going to

606
00:31:25,920 --> 00:31:27,840
tighten up later on because
there must be a lack of

607
00:31:28,120 --> 00:31:31,200
concentrate to produce the
refined copper this year.

608
00:31:31,200 --> 00:31:32,680
That's not quite come true,
right.

609
00:31:32,720 --> 00:31:35,800
It's a little bit more of an
issue if we had a number of ex

610
00:31:35,800 --> 00:31:39,040
China smelters coming through.
So, yeah, we've got India, this

611
00:31:39,040 --> 00:31:41,200
half million Tadani ones
starting up.

612
00:31:41,880 --> 00:31:45,360
Ivanhoe started the smelter in
their African project.

613
00:31:45,640 --> 00:31:48,360
Grasberg's been trying to start
the smelter in Indonesia or

614
00:31:48,360 --> 00:31:50,160
their corset that's been having
problems.

615
00:31:50,720 --> 00:31:53,360
And there's another smelter that
started up in Chile this year as

616
00:31:53,360 --> 00:31:55,560
well.
So we've only got global mine

617
00:31:55,560 --> 00:31:59,840
supply growth this year anyway
of 2 1/2, maybe 3% globally.

618
00:32:00,400 --> 00:32:03,160
But we've got a lot more smelter
additions outside of China.

619
00:32:03,360 --> 00:32:05,760
And that's meant that there's
just a lot less concentrate

620
00:32:05,760 --> 00:32:09,080
available for the Chinese
market, which also has its own

621
00:32:09,080 --> 00:32:12,120
smelter additions this year.
So that's where the concentrates

622
00:32:12,120 --> 00:32:16,960
have gone extremely tight.
And you know, the TCS, spot TCS

623
00:32:16,960 --> 00:32:18,800
even went negative for a period.
And you're like, well, how's

624
00:32:18,800 --> 00:32:20,800
that possible?
You know, how can spot TC be

625
00:32:20,800 --> 00:32:23,440
negative?
So the other issue from the the

626
00:32:23,960 --> 00:32:28,440
smelters perspective, of course,
is, is the, the byproducts,

627
00:32:28,440 --> 00:32:30,800
things like gold, right?
The gold credits for some of

628
00:32:30,800 --> 00:32:33,440
them with gold prices being as
high as they are.

629
00:32:33,440 --> 00:32:35,560
And one of the Chinese copper
smelters was telling me every

630
00:32:35,560 --> 00:32:40,040
$100.00 an ounce on gold is
about $10 on the TC for some of

631
00:32:40,040 --> 00:32:43,120
the concentrate supplies with
decent gold content.

632
00:32:43,640 --> 00:32:46,080
So that's another reason why the
Chinese are just paying

633
00:32:46,080 --> 00:32:52,120
ridiculously low TCS for, for to
secure the concentrate supply.

634
00:32:52,640 --> 00:32:55,040
So yeah, there's quite a few
technical factors there.

635
00:32:55,040 --> 00:32:57,960
Whereas this year it's been more
about ex China smell to growth

636
00:32:58,320 --> 00:33:03,800
having outpaced the mine supply
growth, whereas yeah, next year

637
00:33:03,960 --> 00:33:05,720
your mine supply growth will
continue.

638
00:33:06,480 --> 00:33:08,560
Yes, you've still got the ex
China smelters ramping up.

639
00:33:08,560 --> 00:33:11,240
It's definitely going to keep
TCS very tight.

640
00:33:11,520 --> 00:33:14,200
But it's going to be interesting
going into negotiating season

641
00:33:14,200 --> 00:33:16,080
because I think there will
definitely have to be some

642
00:33:16,080 --> 00:33:22,160
changes to the the kind of the
idea of an annual TC or just one

643
00:33:22,160 --> 00:33:24,280
price agreed for all smelters
globally.

644
00:33:24,280 --> 00:33:25,480
I don't think we're going to see
that.

645
00:33:25,480 --> 00:33:28,600
I think systems definitely going
to break apart, perhaps similar

646
00:33:28,600 --> 00:33:31,760
to what we saw with iron ore in
2008, nine when that broke

647
00:33:31,760 --> 00:33:34,800
apart.
One of the things we saw over

648
00:33:34,800 --> 00:33:37,520
the past 20 years with the
growth of China was China

649
00:33:37,520 --> 00:33:41,200
actually going, signing JV's,
trying to buy assets all around

650
00:33:41,200 --> 00:33:43,080
the world.
Do you do you expect India to do

651
00:33:43,080 --> 00:33:46,480
the same?
That's a good question.

652
00:33:46,480 --> 00:33:49,280
I mean, it seems to have been
quite reluctant so far for

653
00:33:49,280 --> 00:33:53,000
things like METCO where the
steel mills know they, they

654
00:33:53,000 --> 00:33:56,280
desperately need METCO.
But at the same time they, they

655
00:33:56,280 --> 00:33:59,400
don't seem willing to say
overpay for assets, right?

656
00:33:59,400 --> 00:34:02,040
They're still a little bit
disciplined in, in what they're

657
00:34:02,040 --> 00:34:05,120
willing to pay.
And they, they view themselves

658
00:34:05,120 --> 00:34:07,800
as we're Steelman's, we're not
miners, we don't know how to run

659
00:34:07,800 --> 00:34:10,000
mines so much.
So I think there's a reluctance

660
00:34:10,480 --> 00:34:14,840
to, to go upstream on that side.
But then you have seen some

661
00:34:14,840 --> 00:34:17,600
transactions, right?
You've had Jim Dao bought the

662
00:34:17,600 --> 00:34:20,800
Motis assets from from Valley
last year.

663
00:34:22,560 --> 00:34:24,840
But yeah, it's certainly a big
question mark for India where

664
00:34:24,840 --> 00:34:26,159
they're going to get the met
coal from.

665
00:34:26,159 --> 00:34:29,679
So one of the fascinating things
last year, the Indian Steel

666
00:34:29,679 --> 00:34:33,600
Association sent a delegation to
Mongolia and I was asking them,

667
00:34:33,600 --> 00:34:35,280
well, how are you going to get
the coal out of Mongolia?

668
00:34:35,320 --> 00:34:37,800
You know, the Chinese will never
let you rail it through China.

669
00:34:37,800 --> 00:34:41,360
And the Trans Siberian is jammed
with Russian commodities into

670
00:34:41,360 --> 00:34:43,520
the seven East Coast ports.
You're not going to get it out

671
00:34:43,520 --> 00:34:46,280
there.
And a couple of months ago, the

672
00:34:46,280 --> 00:34:49,800
Indian government actually
announced investment in ports in

673
00:34:49,800 --> 00:34:54,679
Iran with the idea that they can
rail cold 7 1/2 thousand

674
00:34:54,679 --> 00:34:59,320
kilometres northwest out of
Mongolia, across Russia, down

675
00:34:59,320 --> 00:35:02,880
through Georgia and Armenia, and
across Iran, and then ship it

676
00:35:02,880 --> 00:35:05,840
out of Iran into India.
So you can imagine what that'll

677
00:35:05,840 --> 00:35:09,000
do for the cost curve 7 1/2
thousand kilometres of railing

678
00:35:09,360 --> 00:35:11,400
now that those rail lines
already exist.

679
00:35:11,400 --> 00:35:14,600
I mean, Iran gets a lot of
Russian commodities via that

680
00:35:14,600 --> 00:35:17,240
rail route.
So it would also open up kind of

681
00:35:17,240 --> 00:35:20,360
more, more commodities from
Russia into India.

682
00:35:20,640 --> 00:35:23,440
So yeah, they're just adding the
bulk pork capacity in Iran with

683
00:35:23,440 --> 00:35:25,560
an idea of of shipping it that
way that.

684
00:35:25,560 --> 00:35:29,400
Trade relationship between
Russia and India is, yeah,

685
00:35:29,400 --> 00:35:31,720
particularly interesting with
like, you know, all the reports

686
00:35:31,720 --> 00:35:35,440
that some of the the growth in
India of of late has been kind

687
00:35:35,440 --> 00:35:37,800
of propped up about because
they're, they're buying like

688
00:35:37,800 --> 00:35:41,040
discounted oil from Russia
because no one else in the world

689
00:35:41,040 --> 00:35:45,520
is buying it from Russia.
Yeah, yeah.

690
00:35:45,520 --> 00:35:49,120
So that's where Modi's kind of
treading a fine line at the

691
00:35:49,120 --> 00:35:51,200
moment of being everyone's
friends, right, where he says

692
00:35:51,720 --> 00:35:54,440
one of the freedom loving
democracies of the world and and

693
00:35:54,520 --> 00:35:56,960
you know, mates with all, all
the democracies.

694
00:35:56,960 --> 00:36:00,280
But equally, yeah, happily part
of the BRICS club as well.

695
00:36:00,280 --> 00:36:03,520
Very close with Russia obviously
from their kind of the military

696
00:36:03,520 --> 00:36:05,720
supplies from a budget
standpoint.

697
00:36:07,040 --> 00:36:09,400
And then, yeah, taking a lot of
the Russian commodities.

698
00:36:09,400 --> 00:36:11,920
And I think also the Russians
are quite big investors in India

699
00:36:12,480 --> 00:36:15,480
as well.
So, yeah, it's a very kind of

700
00:36:15,480 --> 00:36:19,480
close relationship there that
that's see giving them cheaper

701
00:36:19,480 --> 00:36:23,080
inputs for the last couple of
years, whether that continues.

702
00:36:23,640 --> 00:36:27,760
How do you think about the the
sort of bear case view on India

703
00:36:27,760 --> 00:36:31,200
if it if it doesn't materialise
in the next over the next

704
00:36:31,200 --> 00:36:33,760
decade?
I think so.

705
00:36:33,760 --> 00:36:37,000
The problems historically, like
I said, was a lack of

706
00:36:37,000 --> 00:36:41,720
infrastructure and a lack of the
ability to execute where people

707
00:36:41,720 --> 00:36:44,320
would have plans in India, but
they just never get anywhere

708
00:36:44,360 --> 00:36:47,400
right, Can't get land access,
can't get approval, you know,

709
00:36:47,440 --> 00:36:50,440
can't get access to to power or
resources or things.

710
00:36:50,440 --> 00:36:52,840
So those things do seem to have
structurally changed where the

711
00:36:52,840 --> 00:36:55,800
government's willing to
encourage investment, it's

712
00:36:56,320 --> 00:37:00,800
willing to to kind of help
people get things done and

713
00:37:00,800 --> 00:37:03,920
making the resources and the
infrastructure available.

714
00:37:05,320 --> 00:37:07,640
The other issue for India
historically, I guess, has been

715
00:37:07,640 --> 00:37:10,240
the politics side of things
where, you know, politics kind

716
00:37:10,240 --> 00:37:13,880
of becomes a factor that gets in
the way and delays things or

717
00:37:13,880 --> 00:37:16,240
changes and moves the goal posts
continually.

718
00:37:16,920 --> 00:37:20,040
That's something where on the
one hand, yeah, you've seen Modi

719
00:37:20,040 --> 00:37:23,720
won the election again in April
and and seems quite solid at the

720
00:37:23,720 --> 00:37:26,680
moment.
But equally, putting aside the,

721
00:37:26,760 --> 00:37:31,280
the politics at the central
level, the states all seem to be

722
00:37:31,280 --> 00:37:33,280
wanting to participate in this
growth.

723
00:37:33,280 --> 00:37:37,040
Even if the state is run by an
opposition party, you know, not,

724
00:37:37,040 --> 00:37:41,120
not one of the BJP alliances,
they're still, they're not

725
00:37:41,120 --> 00:37:44,240
standing in the way of growth
because it seems every single

726
00:37:44,240 --> 00:37:47,200
state doesn't want to get left
behind that I can't be a state

727
00:37:47,200 --> 00:37:50,040
where I'm, I'm get a reputation
that I can't deliver or you

728
00:37:50,040 --> 00:37:52,240
can't do business here because
I'll get left behind.

729
00:37:52,240 --> 00:37:54,720
People go to other states.
So even when they've got

730
00:37:54,720 --> 00:37:57,560
political differences, they
still seem economically these

731
00:37:57,560 --> 00:38:01,640
days to be, you know, willing to
push the investment to, to, to

732
00:38:01,640 --> 00:38:05,680
get the ports and the roads and
the rails and everything down to

733
00:38:05,920 --> 00:38:08,680
try and attract the FDI and the
investment.

734
00:38:09,120 --> 00:38:14,160
So yeah, it seems on a very
sound basis at the moment.

735
00:38:14,320 --> 00:38:16,960
Very, you know, we've seen
decent growth rates since COVID

736
00:38:16,960 --> 00:38:19,200
and I really do believe they are
sustainable.

737
00:38:21,320 --> 00:38:25,360
If we, if we move away from
India now you, you cover the,

738
00:38:25,360 --> 00:38:29,520
the battery with the energy, the
new energy materials space as

739
00:38:29,520 --> 00:38:32,560
well.
And nickel and lithium,

740
00:38:32,600 --> 00:38:35,760
obviously sort of key, key parts
of this, both having a bit of a

741
00:38:35,760 --> 00:38:38,520
tough time at the moment.
Why don't we start with lithium?

742
00:38:38,520 --> 00:38:41,120
Because I'm sure most people
will be keen to hear about that

743
00:38:41,120 --> 00:38:42,960
one.
What, what do you make of the

744
00:38:43,320 --> 00:38:47,120
the build out in China of, you
know, how they've just expanded

745
00:38:47,120 --> 00:38:50,000
so quickly and being able to
produce so much and the sort of

746
00:38:50,880 --> 00:38:55,000
debate going forward between
Bryan's Hard Rock assets and,

747
00:38:55,080 --> 00:38:57,360
you know, potentially clay
projects going forward?

748
00:38:58,240 --> 00:38:59,520
Yeah.
I mean, the astounding thing in

749
00:38:59,520 --> 00:39:02,160
lithium is how rapidly the
Chinese have gone overseas and

750
00:39:02,160 --> 00:39:05,800
developed mining assets.
But you know, in iron ore they

751
00:39:05,800 --> 00:39:08,320
were very slow to do that.
But that's because iron ore

752
00:39:08,320 --> 00:39:11,920
needs big, heavy infrastructure.
Obviously, the actual volumes in

753
00:39:11,920 --> 00:39:14,760
lithium are a lot smaller.
You can get away with just

754
00:39:14,760 --> 00:39:17,680
trucking projects.
So it's amazing how how much

755
00:39:18,120 --> 00:39:21,920
mine supply, Chinese sponsored
mine supply has emerged just in

756
00:39:21,920 --> 00:39:25,600
the last year out of Africa and
such, like just kind of small

757
00:39:25,600 --> 00:39:30,280
simple trucking shovel projects
that that, you know, low CapEx,

758
00:39:30,280 --> 00:39:33,240
maybe higher OpEx, but they get
the tonnes quickly.

759
00:39:34,320 --> 00:39:38,560
So China's been very aggressive
in that investment, mainly on

760
00:39:38,560 --> 00:39:40,400
the private side more than the
state side.

761
00:39:40,840 --> 00:39:43,680
And they seem to have, you know,
ensured that they've got enough

762
00:39:43,680 --> 00:39:45,480
supply now.
And that's where the lithium

763
00:39:45,480 --> 00:39:49,560
market's really in trouble.
So yeah, the Chinese lithium

764
00:39:49,560 --> 00:39:54,480
demand still growing very well.
EV sales in China are up 30%

765
00:39:54,480 --> 00:39:56,160
this year.
We've had kind of cash for

766
00:39:56,160 --> 00:39:58,240
clunkers upgrade policy since
April.

767
00:39:58,240 --> 00:40:00,960
That's helped support the sales.
So total auto sales have been

768
00:40:00,960 --> 00:40:04,080
struggling this year, but EV
sales still up 30%.

769
00:40:04,480 --> 00:40:07,920
Now the problem from a lithium
perspective is, is hybrids,

770
00:40:07,960 --> 00:40:09,480
right?
Hybrid sales were up 80 odd

771
00:40:09,480 --> 00:40:12,560
percent last year, again this
year soaring as well.

772
00:40:12,560 --> 00:40:16,320
So the actual lithium intensity
per unit essentially has been

773
00:40:16,320 --> 00:40:18,680
declining.
Even though the headline growth

774
00:40:18,680 --> 00:40:21,920
numbers are good, but lithium
prices have really been

775
00:40:21,920 --> 00:40:25,240
suffering about worries on the
export demand right through the

776
00:40:25,240 --> 00:40:27,920
supply chain, EV exports.
Obviously we've seen

777
00:40:27,920 --> 00:40:31,480
protectionism coming in US,
Europe, elsewhere.

778
00:40:32,080 --> 00:40:35,640
So there's worries there on the
EV exports, but also the battery

779
00:40:35,640 --> 00:40:38,920
exports, the, the, the process
lithium exports, you know,

780
00:40:38,920 --> 00:40:42,640
through the supply chain.
The Chinese market players are

781
00:40:42,640 --> 00:40:46,160
very concerned about X China
growth and the way that the EV

782
00:40:46,200 --> 00:40:48,760
sales globally have just cooled
so rapidly.

783
00:40:48,800 --> 00:40:51,040
That's really the thing that
that's got everyone on the back

784
00:40:51,040 --> 00:40:54,240
foot because, yeah, the Chinese
have built so much capacity

785
00:40:54,960 --> 00:40:58,680
through the battery supply
chains and the domestic demand.

786
00:40:58,720 --> 00:41:01,000
You know, I mean, the the
domestic EV penetration is

787
00:41:01,000 --> 00:41:02,880
running ahead of the 2030
targets now.

788
00:41:02,960 --> 00:41:06,000
You know, it's going extremely
well, but it's the Western world

789
00:41:06,000 --> 00:41:09,720
demand where which has really
disappointed this year and and

790
00:41:09,720 --> 00:41:12,560
that's the thing that that sent
the price down while the supply

791
00:41:12,560 --> 00:41:13,800
has been coming through
aggressively.

792
00:41:14,680 --> 00:41:17,880
What do you think about Rio
Tinto's thesis for the Arcadium

793
00:41:17,880 --> 00:41:20,680
takeover?
About the future of Braun and

794
00:41:20,680 --> 00:41:25,000
DLA being the big contributor to
the front of the cost curve, no.

795
00:41:26,920 --> 00:41:30,920
I'm not really familiar enough
on that to share any thoughts?

796
00:41:32,280 --> 00:41:33,520
Sorry.
Yeah.

797
00:41:37,080 --> 00:41:42,920
On the, on the, on the, the, you
know, the copper, nickel, you

798
00:41:42,920 --> 00:41:45,280
know, aluminium kind of side
side of the equation.

799
00:41:46,600 --> 00:41:49,880
You know, I'm, I'm kind of, I'm
curious to see how you, how you,

800
00:41:50,080 --> 00:41:53,120
you know, what your views or non
consensus views might be, you

801
00:41:53,120 --> 00:41:54,560
know, on those, on those other
commodities.

802
00:41:56,560 --> 00:41:58,920
Yeah, so, so for the battery
material side of things, I've

803
00:41:58,920 --> 00:42:02,480
long said copper's my favourite
because look, we just don't know

804
00:42:02,480 --> 00:42:04,680
which battery technology is
going to win, right.

805
00:42:04,680 --> 00:42:07,400
Essentially you're in this kind
of Betamax VHS battle.

806
00:42:07,400 --> 00:42:10,200
You know, a few years ago it was
all about NCM, now it's about

807
00:42:10,200 --> 00:42:13,440
LFP, you know, next year the
Chinese already bringing out

808
00:42:13,440 --> 00:42:17,040
solid state batteries.
It's the technology has just

809
00:42:17,040 --> 00:42:19,320
been evolving so quickly at the
actual battery level.

810
00:42:19,960 --> 00:42:22,080
But we know they need the
cables, right, The wires and the

811
00:42:22,080 --> 00:42:23,920
cars and the charging
infrastructure.

812
00:42:23,920 --> 00:42:27,000
We need mass grid investment
globally for the charging

813
00:42:27,000 --> 00:42:28,520
infrastructure.
I think that's part of the

814
00:42:28,520 --> 00:42:31,680
problem why EV sales have fallen
flat in so many countries

815
00:42:31,680 --> 00:42:34,320
globally, because people are
buying them and finding the

816
00:42:34,320 --> 00:42:36,000
charging infrastructure is just
not there.

817
00:42:36,280 --> 00:42:40,160
That's what Western governments
need to be investing in if they

818
00:42:40,160 --> 00:42:44,080
want to encourage EV roll out.
So to me copper is, is really

819
00:42:44,080 --> 00:42:48,440
the beneficiary or the one to
focus on for that kind of EV

820
00:42:48,760 --> 00:42:52,760
related demand growth.
Whereas yeah, nickel is really

821
00:42:52,760 --> 00:42:54,640
suffering a on the supply side
of the way.

822
00:42:54,640 --> 00:42:58,960
Indonesia's come in and just
gone from nothing 10 years ago

823
00:42:58,960 --> 00:43:01,320
to this year.
It's going to be 2.2 million in

824
00:43:01,320 --> 00:43:05,080
a three and a half million tonne
global market and pushing on

825
00:43:05,280 --> 00:43:09,160
still another 30 odd MHP and Mac
facilities coming in the next 18

826
00:43:09,160 --> 00:43:12,920
months.
So Indonesia's built all this

827
00:43:12,920 --> 00:43:17,680
supply on some of those heavy
projection growth rates for NCM

828
00:43:17,680 --> 00:43:20,360
from a few years ago.
And of course now they've fallen

829
00:43:20,360 --> 00:43:22,560
flat because LFP has taken all
the market share.

830
00:43:22,800 --> 00:43:26,880
So nickel looks really, really
challenged where yes, we need a

831
00:43:27,280 --> 00:43:29,640
pain trade there.
We need some of the high cost

832
00:43:29,640 --> 00:43:33,080
supplies to be sidelined and
we're seeing that happen now.

833
00:43:33,080 --> 00:43:36,120
But I don't think that means we
start a new cycle anytime soon.

834
00:43:36,120 --> 00:43:39,280
I think nickel is going to going
to be struggling all the way

835
00:43:39,280 --> 00:43:41,040
through next year at least as
well.

836
00:43:42,480 --> 00:43:45,400
Whereas yeah, copper's the
favourite structurally because

837
00:43:45,400 --> 00:43:49,520
that added demand from the EVs,
from the charging infrastructure

838
00:43:49,520 --> 00:43:52,360
on top of what we're already
seeing on the green energy

839
00:43:52,360 --> 00:43:56,560
revolution, wind farms, solar
panels, etcetera and all that

840
00:43:56,840 --> 00:44:01,000
again, wiring them into grids
and just the lack of copper mine

841
00:44:01,000 --> 00:44:03,160
supply growth.
So that's, yeah, copper's

842
00:44:03,160 --> 00:44:05,880
absolutely the favourite.
Nicole not so keen on at all.

843
00:44:06,680 --> 00:44:09,720
You, you posed the question
when, when a price is going to

844
00:44:09,720 --> 00:44:14,800
move sustainably high enough to
incentivize new production or

845
00:44:14,800 --> 00:44:17,680
whatever the outcome might be.
Have you, have you been brave

846
00:44:17,680 --> 00:44:20,760
enough to to put a timeline on
when we see that leg up in

847
00:44:20,760 --> 00:44:23,480
copper prices?
Yeah.

848
00:44:23,480 --> 00:44:26,920
So to me the copper prices have
always been about scrap

849
00:44:26,920 --> 00:44:30,240
generation.
So I used to have a great chart

850
00:44:30,240 --> 00:44:33,480
from Google Trends where if you
search Google Trends for

851
00:44:33,560 --> 00:44:36,840
articles about copper theft,
then that used to match the

852
00:44:36,840 --> 00:44:39,760
copper price really well through
the those peak prices in the

853
00:44:39,760 --> 00:44:43,120
early twenty 10s.
So it's almost like, you know,

854
00:44:43,120 --> 00:44:45,320
the criminals are out there on
their smartphones going, hey,

855
00:44:45,320 --> 00:44:47,520
enemy copper's up tonight Lance,
let's go RIP off some more

856
00:44:47,520 --> 00:44:49,640
wiring.
We're willing to risk

857
00:44:49,640 --> 00:44:52,200
electrocution at 12 K, but
you're not willing to risk that

858
00:44:52,200 --> 00:44:55,080
at 10K or something.
It's that's really a marginal

859
00:44:55,080 --> 00:44:57,000
supply.
I wouldn't say there's there's

860
00:44:57,000 --> 00:45:00,800
any mines in the world which are
not operating at $10,000 copper

861
00:45:00,800 --> 00:45:03,680
but will operate at 12,000.
You know, for your marginal

862
00:45:03,680 --> 00:45:06,400
supply, it's all about
incentivizing the scrap

863
00:45:06,400 --> 00:45:11,640
generation.
So that's what we're kind of

864
00:45:11,640 --> 00:45:15,480
running into in these these
these coming years where we're

865
00:45:15,480 --> 00:45:17,880
going to have the demand
outpacing the mine supply

866
00:45:17,880 --> 00:45:19,160
growth.
We're going to need to generate

867
00:45:19,160 --> 00:45:20,560
more scrap.
And if we're going to need to

868
00:45:20,560 --> 00:45:24,400
generate more scrap now than we
did last year, we're going to

869
00:45:24,400 --> 00:45:28,200
require a higher price to to
pull in those marginal scrap

870
00:45:28,200 --> 00:45:31,240
units.
So yeah, I've got kind of view

871
00:45:31,240 --> 00:45:34,520
that proper prices are just
continually higher in coming

872
00:45:34,520 --> 00:45:36,800
years.
You know, obviously we hit the

873
00:45:36,800 --> 00:45:41,160
$12,000 level back in May when
we had all that fast money

874
00:45:41,160 --> 00:45:44,920
coming in on AI and data centres
and all that over excitement,

875
00:45:44,920 --> 00:45:47,840
and that quickly evaporated.
But yeah, I think that kind of

876
00:45:47,840 --> 00:45:51,520
pricing will be quite achievable
early next year when when the

877
00:45:51,520 --> 00:45:54,800
market's really in deficit and
the Chinese demand keeps coming

878
00:45:54,800 --> 00:45:56,640
through and India's doing really
well.

879
00:45:57,680 --> 00:46:00,240
And yeah, the big thing we're
waiting for in commodity land, I

880
00:46:00,240 --> 00:46:03,480
think is a bit of a a Western
world restocking It's.

881
00:46:03,640 --> 00:46:06,680
An interesting way to frame it,
it's like, what, what, what

882
00:46:06,680 --> 00:46:09,360
price does copper need to be to
incentivize people to steal more

883
00:46:09,360 --> 00:46:11,280
of it?
Yeah.

884
00:46:11,400 --> 00:46:17,160
That's essentially it, yeah.
Trev, Trev mentioned aluminium

885
00:46:17,480 --> 00:46:19,760
before as well.
So I think we'd be remiss not to

886
00:46:19,880 --> 00:46:23,200
talk a bit more about that given
what's just happened in the, the

887
00:46:23,200 --> 00:46:26,320
past couple weeks with alumina
prices just flying, breaking

888
00:46:26,320 --> 00:46:30,160
through 600 bucks.
And you know, what we've also

889
00:46:30,160 --> 00:46:33,240
learned the past couple weeks is
all this fragility through the

890
00:46:33,240 --> 00:46:37,320
system, this this sort of choke
points where the whole system is

891
00:46:37,480 --> 00:46:39,440
very contingent on a, a few
factors.

892
00:46:39,840 --> 00:46:43,960
I think the, the prime example
is Guinean supply for the bulk

893
00:46:43,960 --> 00:46:46,560
site.
Do you think that fragility just

894
00:46:46,560 --> 00:46:49,880
lends itself to regular
disruptions over the the coming

895
00:46:49,880 --> 00:46:52,080
years?
Yeah, absolutely.

896
00:46:52,120 --> 00:46:54,760
Yeah.
It's so we've got a much tighter

897
00:46:54,840 --> 00:46:58,400
global aluminium market now as
opposed to Granana closure and

898
00:46:58,400 --> 00:47:03,080
stuff.
And yeah, the like you, you

899
00:47:03,080 --> 00:47:04,880
touched it there on the Guinea
side of things.

900
00:47:04,880 --> 00:47:07,600
So I'm wondering if this is
going to become a seasonal

901
00:47:07,600 --> 00:47:10,680
factor similar to what we have
in the met coal market.

902
00:47:10,680 --> 00:47:16,400
Actually where you've got
China's now reliant on imported

903
00:47:16,400 --> 00:47:20,880
bauxite is about 70% of their
supply and of that 2/3 is from

904
00:47:20,880 --> 00:47:23,360
Guinea.
So Guinea alone is about 1/3 of

905
00:47:23,360 --> 00:47:27,280
Chinese bauxite supply.
Guinea has rainy season from May

906
00:47:27,280 --> 00:47:30,400
to July.
So this the exports are down

907
00:47:30,400 --> 00:47:33,360
sharply.
And of course that means Chinese

908
00:47:33,360 --> 00:47:37,240
import arrivals are much weaker
in the third quarter, which is

909
00:47:37,240 --> 00:47:40,040
when China's in peak hydro
season and their aluminium

910
00:47:40,040 --> 00:47:42,520
productions are running at
record highs, pushing up to that

911
00:47:42,520 --> 00:47:45,600
45,000,000 tonne production cap.
So you've got a real inverse

912
00:47:45,600 --> 00:47:48,880
seasonality there between the
imported bauxite supply and the

913
00:47:48,880 --> 00:47:50,680
domestic Chinese aluminium
production.

914
00:47:51,520 --> 00:47:56,280
So when the prices spiked back
in June, and I was saying, well,

915
00:47:56,280 --> 00:47:58,920
you know, this is going to be
quite sustainable till November

916
00:47:58,920 --> 00:48:03,320
because historically when
alumina prices have spiked,

917
00:48:03,320 --> 00:48:06,800
you've seen Chinese exports come
out very quickly because China's

918
00:48:06,920 --> 00:48:10,360
never really struggled for
bauxite supply as an abundance

919
00:48:10,360 --> 00:48:13,720
of, of alumina refining capacity
and was able to switch on very

920
00:48:13,720 --> 00:48:16,240
quickly when the price incentive
was there.

921
00:48:16,520 --> 00:48:22,160
That's very different now post
COVID, both iron ore, zinc of

922
00:48:22,160 --> 00:48:24,720
oxide, you know, it's just
impossible to mine anything in

923
00:48:24,720 --> 00:48:27,440
China these days unless you're
already in existing mine.

924
00:48:28,120 --> 00:48:30,400
The anti corruption
environmental rules, you know,

925
00:48:30,400 --> 00:48:33,320
have just decimated the
elasticity of those supply

926
00:48:33,320 --> 00:48:36,040
curves in China.
So there's no supply response in

927
00:48:36,040 --> 00:48:40,240
China on mine supply.
And equally the refineries,

928
00:48:40,240 --> 00:48:43,640
there's still plenty of spare
refining capacity in China, but

929
00:48:43,760 --> 00:48:46,680
because the Ghanaian volume is
not there, they weren't able to

930
00:48:46,680 --> 00:48:49,000
ramp up either.
And with the domestic production

931
00:48:49,000 --> 00:48:52,480
of smelters being so high in
three Q, they were what they

932
00:48:52,480 --> 00:48:54,600
were producing extra was going
domestically.

933
00:48:55,320 --> 00:48:59,560
So yeah, that that's the problem
that we have now as a seasonal

934
00:48:59,560 --> 00:49:01,360
trade.
Could that be repeated next year

935
00:49:01,520 --> 00:49:04,080
and and increasingly more so
going forward?

936
00:49:04,080 --> 00:49:05,520
And that's a big question for
me.

937
00:49:06,120 --> 00:49:09,080
The alumina could start to
develop that seasonal trade.

938
00:49:09,600 --> 00:49:12,560
So the bizarre thing is how the
aluminium markets just not the

939
00:49:12,640 --> 00:49:14,600
aluminium markets not followed
through.

940
00:49:14,800 --> 00:49:17,480
You know, if you remember two
years ago when LME aluminium was

941
00:49:17,480 --> 00:49:21,800
$4000 on the back of, you know,
high energy prices every day,

942
00:49:21,800 --> 00:49:25,000
you know, the aluminium traders,
LME traders are talking about

943
00:49:25,000 --> 00:49:27,160
our spot.
European power prices are up.

944
00:49:27,160 --> 00:49:30,280
You know, aluminium's up, and
that wasn't a real cost curve.

945
00:49:30,280 --> 00:49:32,480
Who's producing aluminium with
spot power?

946
00:49:32,480 --> 00:49:34,640
You know, most smelters have got
contracted power.

947
00:49:34,640 --> 00:49:37,960
They're not using a spot unit of
power to produce reduced

948
00:49:38,480 --> 00:49:40,440
aluminium.
Whereas the alumina price is

949
00:49:40,440 --> 00:49:42,120
real.
Even if people aren't buying a

950
00:49:42,120 --> 00:49:45,000
spot cargo over alumina, an
awful lot of people have got

951
00:49:45,000 --> 00:49:47,120
contracts referencing the spot
prices.

952
00:49:47,400 --> 00:49:50,880
So a lot of smelters globally
have got to be feeling of that

953
00:49:50,880 --> 00:49:53,720
uplift in the alumina price and
that really should be pushing

954
00:49:53,720 --> 00:49:58,040
the, the aluminium cost curve
about say $3000 LME basis.

955
00:49:58,320 --> 00:50:00,680
But the aluminium price has been
very slow to move.

956
00:50:01,240 --> 00:50:03,840
And yeah, I, I just think people
are not understanding what's

957
00:50:03,840 --> 00:50:05,760
changed.
You know, the, the, the normal

958
00:50:05,760 --> 00:50:08,560
answer I get is luminous price
spikes never last long.

959
00:50:08,720 --> 00:50:10,720
You know, it'll be back down
again in a few weeks.

960
00:50:10,720 --> 00:50:13,800
So don't chase it.
Whereas it's not been up now for

961
00:50:13,800 --> 00:50:15,240
three months.
Like I said, it's just had

962
00:50:15,240 --> 00:50:19,160
another fly up in the last few
weeks as well and the risk is it

963
00:50:19,160 --> 00:50:21,800
stays higher now, you know,
could well be into next year.

964
00:50:22,240 --> 00:50:25,400
So yeah, LME aluminium,
Surprised it hasn't moved

965
00:50:25,400 --> 00:50:26,880
already.
It's really lagging.

966
00:50:28,480 --> 00:50:31,320
Is, is that the market you'd
sort of pick of the the bunch

967
00:50:31,320 --> 00:50:34,320
there that's most misunderstood?
Is there is there another one?

968
00:50:34,320 --> 00:50:37,400
That one I mean.
I think I'm I'm a prime example,

969
00:50:37,400 --> 00:50:40,000
but are there other ones you
think are super misunderstood?

970
00:50:41,960 --> 00:50:44,320
Yeah, that's one that really
stands out and and certainly for

971
00:50:44,320 --> 00:50:46,960
this year just in terms of
something that's changed

972
00:50:47,400 --> 00:50:51,480
dramatically.
But my other big, big one is

973
00:50:51,480 --> 00:50:53,880
metcoal where that's
structurally and very bullish on

974
00:50:53,880 --> 00:50:55,800
metcoal.
And equally that's got a very

975
00:50:55,800 --> 00:50:59,160
interesting seasonal pattern
because you know, iron ore.

976
00:50:59,160 --> 00:51:02,280
The nice thing about the iron
ore market seasonally is that

977
00:51:02,400 --> 00:51:06,400
Chinese New Year always January
or February matches the West

978
00:51:06,400 --> 00:51:09,080
Australian cyclone season and
the Brazilian rainy season.

979
00:51:09,200 --> 00:51:12,000
So you have both demand and
supply both week in the first

980
00:51:12,000 --> 00:51:15,800
quarter of the calendar year and
then you know both pick up after

981
00:51:15,800 --> 00:51:18,280
that.
Whereas for Metco, you've got

982
00:51:18,280 --> 00:51:22,160
India, the biggest buyer is on
monsoon season from May to

983
00:51:22,160 --> 00:51:25,680
September with reduced steel
production and then they come

984
00:51:25,680 --> 00:51:29,080
out of the monsoon season and
ramp steel production Q4 into a

985
00:51:29,080 --> 00:51:32,920
peak in Q1, which of course is
exactly when Queensland starts

986
00:51:32,920 --> 00:51:34,560
to suffer from all the rains and
cycling.

987
00:51:35,160 --> 00:51:38,760
So you've got a real inverse
seasonality in Metco where your

988
00:51:38,760 --> 00:51:43,320
biggest supplier out of East
Coast Australia is offline at

989
00:51:43,320 --> 00:51:47,160
the same time as as the biggest
producer India is, is, is

990
00:51:47,560 --> 00:51:49,400
pushing its production to peak
levels.

991
00:51:49,800 --> 00:51:52,320
So you've seen for the last two
years and again this year looks

992
00:51:52,320 --> 00:51:56,000
like being a repeat where
metcoal prices have been 300

993
00:51:56,000 --> 00:52:01,120
plus dollars at some point in Q1
on a cyclone induced spike.

994
00:52:01,880 --> 00:52:04,720
But middle of the year they're
down to $200 because the Indians

995
00:52:04,720 --> 00:52:07,360
are suffering from monsoon
season and Aussie productions

996
00:52:07,680 --> 00:52:10,760
back up to normal levels.
So you've got a real interesting

997
00:52:10,760 --> 00:52:13,200
seasonality there in metcoal,
which I think could just get

998
00:52:13,200 --> 00:52:17,440
more and more extremes as as the
Indian demand grows and grows.

999
00:52:17,520 --> 00:52:19,840
I wonder the commodity traders
make so much money.

1000
00:52:24,320 --> 00:52:26,880
Ian, I've got, I've got one, one
last commodity.

1001
00:52:26,880 --> 00:52:29,400
I just want to touch on a bit
out of left field, but nobody

1002
00:52:29,400 --> 00:52:31,480
talks about it and you cover the
the base base.

1003
00:52:31,480 --> 00:52:33,680
I wonder if you give it any
thought Zinc.

1004
00:52:33,680 --> 00:52:36,400
Is there any reason to get
excited about zinc?

1005
00:52:37,240 --> 00:52:39,280
Does it stink or does it smell
good?

1006
00:52:40,960 --> 00:52:42,480
Oh, it, it smells good at the
moment.

1007
00:52:42,480 --> 00:52:47,040
Yeah, it's, it's, yeah, Zinc's
had a very good year already.

1008
00:52:47,200 --> 00:52:50,760
Price has been up towards $3000
for much of the year, which

1009
00:52:50,760 --> 00:52:54,240
historically is very high level.
You've seen a lot of zinc mines

1010
00:52:54,240 --> 00:52:56,920
supply disruptions globally,
right?

1011
00:52:56,920 --> 00:52:59,360
Peru, Australia, 2 biggest
suppliers.

1012
00:53:00,120 --> 00:53:03,080
And again, as I said, on the
China domestic side, it's

1013
00:53:03,080 --> 00:53:06,040
something where we've lost that
elasticity of domestic zinc mine

1014
00:53:06,040 --> 00:53:11,040
production as well.
So the zinc concentrates markets

1015
00:53:11,040 --> 00:53:15,760
been extremely tight.
That's really hurt the Chinese

1016
00:53:15,760 --> 00:53:19,160
refined zinc production as well.
That's the refined zinc

1017
00:53:19,160 --> 00:53:21,160
production is really struggling
because of that lack of

1018
00:53:21,160 --> 00:53:23,440
concentrates.
So yeah, in copper, they've

1019
00:53:23,440 --> 00:53:25,720
found a bit more scrap.
They've managed to maintain the

1020
00:53:25,720 --> 00:53:28,640
copper production and they had
very high concentrate

1021
00:53:28,640 --> 00:53:30,960
inventories carrying over the
last year that have helped.

1022
00:53:31,480 --> 00:53:34,280
Whereas in zinc, that
concentrate tightness is really

1023
00:53:34,680 --> 00:53:37,160
feeding through to the refined
zinc market in China.

1024
00:53:37,640 --> 00:53:41,000
So refined zinc production's
down and China's having to

1025
00:53:41,000 --> 00:53:44,400
import more refined zinc from
the global market.

1026
00:53:44,720 --> 00:53:48,400
So that's, yeah, really
tightening up the global market.

1027
00:53:48,400 --> 00:53:52,160
And steel production obviously
has suffered a lot this year.

1028
00:53:52,960 --> 00:53:56,600
Steel's about 2/3 of of zinc
consumption goes into Gulf

1029
00:53:56,600 --> 00:53:58,240
steel.
Of that, about two thirds is

1030
00:53:58,240 --> 00:54:00,920
into autos.
So with this Chinese stimulus,

1031
00:54:00,920 --> 00:54:04,000
you know, that should certainly
help auto sales, appliance

1032
00:54:04,000 --> 00:54:07,680
sales, you know, a lot of those
end use zinc, galvanised steel

1033
00:54:07,680 --> 00:54:10,720
markets.
So I think the zinc demand will

1034
00:54:10,720 --> 00:54:13,560
be doing better in China in
coming months, whereas the

1035
00:54:13,560 --> 00:54:15,680
supply side still very
challenged, doesn't look like

1036
00:54:15,680 --> 00:54:18,320
that can recover until at least
next year.

1037
00:54:18,600 --> 00:54:21,520
So I think, yeah, seems already
quite punchy today.

1038
00:54:21,560 --> 00:54:24,200
You know, aluminium prices have
really underperformed.

1039
00:54:24,200 --> 00:54:25,800
They should catch up.
I'd say zinc.

1040
00:54:26,120 --> 00:54:29,200
The prices have done well, but
they certainly look sustainable

1041
00:54:29,200 --> 00:54:31,160
here.
On a kind of three to six month

1042
00:54:31,160 --> 00:54:32,600
view, it looks like a very tight
market.

1043
00:54:32,800 --> 00:54:34,360
Where?
Where were the disruptions in

1044
00:54:34,360 --> 00:54:41,400
Australia for Zinc North QLD?
Yeah, was it, Do your rivers

1045
00:54:41,400 --> 00:54:43,560
have have issues or not?
Yeah.

1046
00:54:43,560 --> 00:54:46,200
Century zinc soft line as well.
Century.

1047
00:54:50,200 --> 00:54:52,800
Yeah, fantastic.
Ian, I am all out of questions.

1048
00:54:52,800 --> 00:54:54,480
I think I've peppered you with
enough.

1049
00:54:54,760 --> 00:54:56,320
Bellis, do you have any more for
Ian?

1050
00:54:57,120 --> 00:54:59,360
Thank you so much, Ian, If, if
there's, you know, one last

1051
00:54:59,360 --> 00:55:01,120
thing, you kind of want to leave
our, our listeners with

1052
00:55:01,120 --> 00:55:04,040
something, you know, some
something we should all reflect

1053
00:55:04,040 --> 00:55:05,840
on or, or something non
consensus that you've been

1054
00:55:05,840 --> 00:55:07,640
pondering.
Love to hear it.

1055
00:55:09,720 --> 00:55:11,080
Yeah.
So I'd say the key thing really

1056
00:55:11,080 --> 00:55:14,200
and obviously India, we've got
the structural growth story and

1057
00:55:14,200 --> 00:55:16,720
and that's still very under
appreciated, you know, but as as

1058
00:55:16,720 --> 00:55:19,920
the demand keeps printing strong
numbers, hopefully they'll get

1059
00:55:19,920 --> 00:55:22,760
more and more attention.
But the other thing is on the

1060
00:55:22,760 --> 00:55:26,400
China side that it's not just
one China as it was for the last

1061
00:55:26,400 --> 00:55:28,720
20 plus years.
It's about the split between new

1062
00:55:28,720 --> 00:55:31,240
China and old China.
And that gives very different

1063
00:55:31,240 --> 00:55:33,440
stories for each of the
different commodities.

1064
00:55:34,800 --> 00:55:36,280
Excellent mate, amazing.
Thank you so much for.

1065
00:55:36,360 --> 00:55:38,000
Your time in.
Thanks for that bud.

1066
00:55:38,000 --> 00:55:40,040
Cool.
Good stuff.

1067
00:55:40,200 --> 00:55:43,480
Cheers guys.
Oh boy, Jay, let's talk about

1068
00:55:43,480 --> 00:55:44,720
buddy.
Something that's in your

1069
00:55:44,720 --> 00:55:47,200
wheelhouse and not mine.
You love that shit.

1070
00:55:48,400 --> 00:55:49,760
I had a feeling you might say
that.

1071
00:55:49,760 --> 00:55:52,480
And yeah, I did love it.
There was a good few details in

1072
00:55:52,480 --> 00:55:53,720
there that I hadn't heard
before.

1073
00:55:53,720 --> 00:55:57,600
So very, very fascinating and
awesome that we get a chat with

1074
00:55:57,600 --> 00:55:58,400
these folks.
Yeah.

1075
00:55:58,680 --> 00:56:00,600
It's amazing how I can.
Good intro but.

1076
00:56:00,840 --> 00:56:04,680
Yeah, good intro.
It's amazing how consensus like

1077
00:56:04,680 --> 00:56:07,360
long copperies, everyone's long,
everyone is super, super bullish

1078
00:56:07,360 --> 00:56:09,640
copper.
It's just it's an amazingly

1079
00:56:09,640 --> 00:56:11,920
consensus for you for.
The last four years.

1080
00:56:12,120 --> 00:56:13,600
Yeah.
But yeah, maybe it's when people

1081
00:56:13,600 --> 00:56:16,800
are fatigued that actually just.
When are they going to give up

1082
00:56:16,800 --> 00:56:20,360
Trev and just let it go up?
Well, I also think it's so

1083
00:56:20,360 --> 00:56:23,160
consensus in our very niche
world of the market.

1084
00:56:23,360 --> 00:56:27,320
You know, it's like it's, it has
gone beyond that, you know,

1085
00:56:27,320 --> 00:56:29,400
beyond.
And it did when copper ran over

1086
00:56:29,400 --> 00:56:31,760
5 bucks.
That was like hedge funds and

1087
00:56:31,760 --> 00:56:35,440
these sorts of characters who
aren't always playing in, you

1088
00:56:35,440 --> 00:56:37,520
know, mining stocks or whatever.
They might look at commodities

1089
00:56:37,520 --> 00:56:41,960
more broadly, but it's a
smallish part of the world.

1090
00:56:42,280 --> 00:56:45,200
MMS are going to be mining a
large part of the world soon,

1091
00:56:45,200 --> 00:56:48,960
JD, did you know that?
They are and grounded are going

1092
00:56:48,960 --> 00:56:50,960
to be supplying houses for a
large part of Perth.

1093
00:56:51,000 --> 00:56:52,720
Pretty bloody.
Pretty much MMS do a bit

1094
00:56:52,720 --> 00:56:54,480
grounded, Chuck the camp in for
it.

1095
00:56:54,720 --> 00:56:57,480
Crossbound your energy will
Chuck your power station in for

1096
00:56:57,480 --> 00:57:00,160
it.
Bloody savical put the ground

1097
00:57:00,160 --> 00:57:04,400
sport in for if it is an
underground mine CRE.

1098
00:57:04,440 --> 00:57:06,680
Got you insorted.
They'll insure the mine,

1099
00:57:06,680 --> 00:57:09,000
Greenland's equipment will sort
the water infrastructure out for

1100
00:57:09,000 --> 00:57:11,440
the mine.
K drill will find the mine.

1101
00:57:11,520 --> 00:57:16,400
Before this happens.
MMTS would have got the tenement

1102
00:57:16,400 --> 00:57:18,640
sorted for K drill to go.
Start drilling on it and

1103
00:57:18,640 --> 00:57:21,560
Australian and look at haulage.
Would have cleared the site, put

1104
00:57:21,560 --> 00:57:25,680
the dams in K drill to do the
holes and then once it's all

1105
00:57:25,680 --> 00:57:28,120
gone you'll see how it's
performing on the stock market

1106
00:57:28,120 --> 00:57:30,640
Morris Park chart.
Fantastic.

1107
00:57:31,160 --> 00:57:33,360
Mate very money miners.
The information contained in

1108
00:57:33,360 --> 00:57:36,160
this episode of Money of Mine is
of general nature only and does

1109
00:57:36,160 --> 00:57:38,960
not take into account the
objectives, financial situation

1110
00:57:39,000 --> 00:57:41,000
or needs of any particular
person.

1111
00:57:41,320 --> 00:57:44,360
Before making any investment
decision, you should consult

1112
00:57:44,360 --> 00:57:47,400
with your financial advisor and
consider how appropriate the

1113
00:57:47,400 --> 00:57:50,280
advice is to your objectives
financial situation.

1114
00:57:50,520 --> 00:57:51,080
And needs.