Abstract:

Canadian mining has been spoiled to date. With the USA to the immediate south, the EU to the immediate east and Japan to the immediate west, Canada’s natural resources never needed to go far to reach the G7 markets. McKinsey now projects that 52% of the world’s GDP will come from Asia in the next 20 years; this compares to 42% for the G7 today. The metal client pays CIF so as the F grows, the C must accommodate. As Asia consists from Japan to the Middle East and contains more than half of the world’s population whose consumption curve and wealth has just begun, serious cost adjustment must be undertaken for the soon-to-be distant mines and Canadian companies will have to look for Asia-centric mining and recycling more often. Then there will be a host of Asian countries who, as mining hosts, will be increasingly demanding; just look at LNG; three quarters of the demand is in Asia, as is the supply. And with a capital market that will be more demanding of mining companies in terms of both least-risk and in terms of dividend yields. The capital markets will not abate. With the seven AFATMAN* firms now totalling over US $8 tn, the 50 top mining companies that total $1 trillion, pale in comparison. The future mining company must first cut existing costs with better metallurgy and digitisation, or move to Asia and deal with aggressive govenments andéor pare back on risk more, and pay out more dividends. These will all be new.

(* Alphabet, Facebook, Apple, Tesla, Microsoft, Amazon, Netflix).

Biography of the presenter: Mauro Chiesa is a semi-retired project financier with four years in Ottawa, and 25 years with two banks in NYC and the World Bank Group in Washington, DC.

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Mr. Mauro Chiesa

Biography