Issue link: https://iconnect007.uberflip.com/i/1469343
28 SMT007 MAGAZINE I JUNE 2022 Dykes: e big change in the market in the last five to 10 years is resource nationalism where countries are now establishing rules to pro- duce the finished goods rather than ship out the raw material. ey've realized they can build the products and then sell you the fin- ished product. at's one big change in the market. China's approach is different than what's been done historically over the past 400 or 500 years. Normally, you mine your own material first, then you go mine some- one else's. China produces its own, but it's also buying up everybody's else's deposits, because they've got the money to do it; they go in and purchase all these. We have two or three offers on our deposits from the Chinese wanting to control the met- als in order to control the market and main- tain it. If you control 70% or more of the mar- ket, you can manipulate the prices so that you can flood the market at times and gather up all the deposits. Once you have control, you can throttle off the supply to raise the price. e other thing, of course, is these derivative markets. What happens is at certain times you can look at the market and realize there's been more copper sold than exists. at creates these artificially high prices. If a lot of these markets were called, the price would skyrocket because there's just not enough, so you get this contributing to the supply/demand curve. e bottom line is the world still needs the metal. As far as we're concerned, we either mine it or grow it. ose are the only choices. Mining is a major player, and a big change is the markets. ey've tried to regulate the mar- kets, but there are these ongoing derivatives and stockpiling, which, of course, control the short-term pricing. But in mining, you can't use short term pric- ing. You have to guesstimate the long-term price, in five- or 10-year chunks. I'm not inter- ested in the price of copper today; I'm inter- ested in the next five years and then in the next 10 years, because we must figure that out to do economic calculations. Johnson: In our business culture where Wall Street only cares about the next 90 days, to be thinking 20 years out just to get it running, and then a minimum of 10 years of production, is a long time. Dykes: Exactly. at's one difference in philos- ophy between the Western and Asian worlds. e Western world can't see past next week, and everything is controlled by these two- to three-year government plans. e Chinese, for example, and other Asian countries lay out 20-, 30-, 40-, even 50-year plans, so these small changes don't affect their plan. Johnson: With all the metals now used in elec- tronics, whether it's molybdenum, lithium, copper, aluminum, etc., what are the most challenging of the metals to supply from the mining perspective? Dykes: No surprise here: the rarer they are, the more challenging. I wouldn't call copper a rare metal. ere's quite a bit of copper still in the ground at lower grades around the planet, but it is more remote. It will cost you more to mine, but the price takes care of that. When the demand goes up—because of the long timeframe to start a mine—it may take four or five years for the mines to catch up, and you end up with supply and demand matching up. In