Miners take Silicon Valley approach in pitching industry to investors

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Miners take Silicon Valley approach in pitching industry to investors

By Peter de Kruijff

There’s nothing like being at the top of the cycle of the minerals and metals markets to highlight the ecstasy and pitfalls of Western Australia’s resources-reliant boom-and-bust economy.

Walking around the historic Goldfields city of Kalgoorlie for the past week’s 30th iteration of the annual Diggers and Dealers conference – the nation’s largest mining forum – it’s not hard to see the signs.

The Kalgoorlie Super Pit is the hole full of gold which keeps on giving.

The Kalgoorlie Super Pit is the hole full of gold which keeps on giving.Credit: Ryan Stuart

There was an actual electronic trailer sign parked outside the conference itself by a local company advertising for drillers offsiders jobs, which spruiked $1000 swing bonuses in a bid to attract new staff, as companies sink cash into exploration to try and capitalise off high gold and iron prices.

Such is the fervour for re-emerging metals like lithium, copper, and nickel as part of the new energy economy, that with so many commodities doing well there is talk around Kalgoorlie of putting a digital stock ticker display back up on the balcony of landmark pub the Palace Hotel.

But with so much demand for skilled workers, the city’s got a rental vacancy rate of 1.2 per cent and there are still not enough bodies to fill all the jobs on offer.

On Thursday, the state government announced its intentions to run an advertising campaign to pinch skilled migrants from other jurisdictions in Australia and New Zealand, while seeking an extra 5000 onshore places through the federal government’s State Nominated Migration Program, to feed the resources beast which kept the country’s economy going through the COVID-19 pandemic.

An electronic sign trailer outside the Diggers and Dealers conference in Kalgoorlie trying to attract new drillers offsiders with $1000 swing bonuses.

An electronic sign trailer outside the Diggers and Dealers conference in Kalgoorlie trying to attract new drillers offsiders with $1000 swing bonuses.Credit: Peter de Kruijff

WA Mines and Petroleum Minister Bill Johnston said the mining sector had been strong over the past five years but commodity prices would return to long-run averages over time.

He was, however, positive about resources like lithium which had previously boomed before crashing, with analysts expecting greater demand as the electric vehicle revolution takes off around the globe.

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Green versus gold

You would not have thought gold was fetching about $2500 an ounce in recent months given the way base and battery metals were pumped up at the three-day conference.

IGO Limited, which promotes how it is “mining the metals for a clean energy future”, picked up one of the two major awards by being named the dealer of the year.

It did so by selling off its interests in the Tropicana gold mine in WA, which it was shopping around at the last Diggers and Dealers event, and going into a joint venture with Tianqi Lithium Corporation which has a 51 per cent stake in the Greenbushes project – the world’s largest hard-rock lithium mine – and 100 per cent ownership of the Kwinana Lithium Hydroxide Refinery.

IGO Limited managing director and chief executive Peter Bradford whose company was named the dealer of the year at the annual Diggers and Dealers conference.

IGO Limited managing director and chief executive Peter Bradford whose company was named the dealer of the year at the annual Diggers and Dealers conference.Credit: Peter de Kruijff

IGO managing director and chief executive Peter Bradford said BHP’s recent deal with EV manufacturers Tesla, run by offbeat billionaire Elon Musk, for nickel supply and Rio Tinto’s move into lithium were significant developments in the broader battery metals sector.

“It’s wonderful advertising for the whole space in really getting that interest from the top end of town and from the investors who invest in the top end of town,” he said.

“WA is so well positioned in this electric vehicle battery space ... the opportunity is there for WA to work out how far we go.”

IGO also has a nickel-copper-cobalt operation that has been producing since 2017 but will need to find more significant deposits if it wants to keep supplying nickel in the back end of the decade and in the future.

Bill Beament, a mining engineer in his 40s, set the tone on day one, announcing his company Venturex Resources’s rebrand to DEVELOP with a plan to turn the small miner, which has a copper-zinc-silver asset, into a global underground workforce consultancy with an eye on the commodities of the future.

Mr Beament roved the stage like the event was a TED Talk or the launch of a new tech product as he unveiled his vision for the company with an untucked shirt.

The young and tie-less engineer stood out from many of the lectern-bound mining executives as he talked up the environmental benefits of his proposals.

Mr Beament was the architect of the $16 billion merger of Northern Star Resources and Saracen Minerals, which runs Kalgoorlie’s iconic gold producing Super Pit, which he only detached himself form earlier this year.

But he boldly said on the sidelines of Diggers — an event where Aurum-loving companies dominate the speakers list — gold was not green-friendly.

There may not been any east coast investors at this year’s event thanks to WA’s hard border, but the 2520 delegates, the second-largest crowd on record, and people watching on a livestream were treated to presentations focusing on the social and environmental requirements of various funds.

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Ken Brinsden — the boss of lithium company Pilbara Minerals, which has an asset he thinks could rival Greenbushes in production — said on the sidelines of the conference miners in iron ore, fossil fuels, and even gold would be having an existential crisis.

“You have to come up with innovation, you have to come up with an alternative to make sure the protesters aren’t standing outside your AGM,” he said.

But the under-fire gold miners at this year’s conference were not going to take any imputations lying down in a city built off the commodity.

Evolution Mining executive chairman Jake Klein voiced his frustrations that the gold price had dropped from the lofty $2800 an ounce last year.

“This year we the gold miners are in the dog house, even though the pandemic is far from over, the markets and the metal prices are acting as if it was,” he said.

“So-called green metals are the rage.

“Companies with assets in these commodities are being priced like internet companies, all about their potential and future earnings, it all seems almost too good to be true and just maybe it is.”

Mr Klein told reporters after his presentation while the gold price was still good he thought fund managers enthusiastic about green metals were under-valuing what he mined.

“I want Elon Musk to start tweeting about gold and not Bitcoin and all these other things,” he said, half-jokingly.

Upstart ‘new’ metals did little to take the shine off many of the gold presenters at the conference.

One Australian-listed gold company, West African Resources Limited, was named the digger of the year for starting a new mine in the land-locked country of Burkina Faso in the middle of a pandemic to build up a $1 billion market capitalisation.

Closer to home, Northern Star Resources’ new chief executive Stuart Tonkin took the gold comments of his predecessor in good humour as he maintained the company would find ways to reduce its carbon footprint when it came to power generation and keep its focus on the precious metal.

Mr Tonkin said wind farms could be a possibility but he thought governments should start talking about nuclear again.

“Fukushima was 10 years ago,” he said.

“If we don’t start talking about it, it absolutely won’t be part of our options in 10 years or 20 years.”

There’s gold under the streets of Kalgoorlie, which is plonked right next to the famous Super Pit, and Mr Tonkin said you did not have to move far from the headframe to find it, with the company planning to steadily work its way outwards from its current target area.

Northern Star Resources recently started a dialogue with the 137 residents of the suburb of Williamstown on a voluntary relocation program, where it could buy up homes and help move residents.

There is no specific mine plan in play for the suburb but the early community work is the sign of an expansion of operations which could be inevitable.

One looming spectre pushes long-term issues out of mind for many workers and executives: fears of Delta-variant COVID-19 spread in Australia loomed large on the last day of the conference and showed how quickly things could come crashing down.

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Pilbara mine rocked by COVID-19 scare

Fortescue chief executive Elizabeth Gaines had a whirlwind Diggers and Dealers conference as the last presenter for the forum.

Upon landing in Kalgoorlie on Wednesday afternoon she was in the middle of a crisis after the Department of Health notified the company a fly-in, fly-out contractor who had been at its Cloudbreak iron ore mine for a recent week-long swing had recorded a weak positive COVID-19 test.

No lockdowns have been triggered at the site, which can have as many as 2000 workers at any one time, or elsewhere in WA with uncertainty around whether the contractor, who got the virus last year, was actually spreading it.

Testing has ramped up at FMG and Ms Gaines said the company was keen to distribute vaccines when they became available from the government.

She also noted the skills shortage, coupled with vaccine hesitancy, could mean FMG did not try to enforce any sort of mandatory jab rule.

“We’ve all been hearing about labour shortages, it has been a key theme recently of this conference as well,” Ms Gaines said.

“Cutting off a large portion of the workforce in this current environment also doesn’t make sense. So I just think we have to work through this.”

Australia’s vaccine rollout was a bugbear for nearly all companies wanting to get access to skilled workers from overseas and interstate to supplement the workforce.

Mr Klein said he was frustrated at how Australia had gone from leading the fight against the pandemic to being a laggard.

“In a bitter twist of irony, Evolution has six assets, five of which are in Australia, and the only asset we can really visit at the moment is in Canada,” he said.

“There is clearly only one solution for this, and that’s for everyone to get vaccinated.”

Roy Hill chief executive Gerhard Veldsman called for serious conversations around facilities for quarantining international workers and set dates for the federal government’s vaccination target plan.

Dealing with ‘dinosaurs’

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Ms Gaines used her platform to once again decry the dearth of women in the mining sector as WA prepares to start a parliamentary inquiry into sexual harassment and rapes in the industry.

She said it was critical forums like Diggers and Dealers demonstrated a commitment in pushing for a diverse workforce.

“I know that my address has become somewhat synonymous with the annual ‘Diggers Diversity Index’ and this year, I was pleased to note a small increase in the number of females on the speakers’ list, which has increased from three to four,” Ms Gaines said.

“It is clear that the industry still has some work to do in this regard.”

Mr Brinsden was another executive to speak out on the issue and called for companies to rehabilitate “dinosaurs” who did not get with the program, rather than send them down the road to become someone else’s problem.

Indeed, the broader theme to come out of the conference was for Jurassic ways of thinking to go the way of the dinosaurs.

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