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Mining News: Teck CEO sees long-term trends intact Lindsay: Increasing difficulty maintaining supply, growing demand bode well for mineral explorers; partnerships will help meet need Shane Lasley Mining News
Trepidation over scarce venture capital tempered the inherent ability of mineral explorers to envision the prospectivity of what lies over the horizon, resulting in an aura of guarded optimism during the 2013 Mineral Exploration Roundup, held Jan. 28-31 in Vancouver, B.C.
Teck Resources Ltd. President and CEO Don Lindsay addressed the anxiety and resilience of the explorers and miners attending the annual gathering.
“The mining industry is all about a license to dream,” Lindsay observed during opening remarks at the event. “If you don’t have that passion about dreaming the next drill hole that is going to come through for you … you wouldn’t have the motivation to go up against the odds and find that needle in the haystack.”
And, according to Lindsay, that needle is getting tougher to find.
“The theme of this year’s Roundup, “Digging Deeper: Resources for Life,” is incredibly relevant, I think, to the industry today,” he told attendees of a Jan. 29 luncheon. “Every year it gets harder to find new deposits. We are literally being forced to dig deeper – deeper in the earth, deeper into remote areas and deeper into challenging mining environments.”
“The result is often extended timelines and significant cost increases as companies are forced to develop more challenging projects in an increasingly complex permitting environment,” he added.
Resources for life While the mining sector is forced to dig deeper, the commodities they produce remain an essential ingredient to a growing and modernizing world.
“As an industry we can’t be guided by the short term ups and downs, we have to take the longer term approach,” Lindsay encouraged the crowd. “We have to remember that it is the long-term trends that underpin our growth and drive demand for the products that we search for and produce, and these long-term trends I am absolutely convinced remain in place.”
And one trend that has remained firmly intact throughout the eons is the commodities that miners produce are essential components of humanity.
“Every single thing that is used in our life comes from one of two sources – if you can’t grow it, you have to mine it,” Lindsay reminded the crowd.
Growing demand driven by developing countries coupled with increasing difficulty in maintaining supply bode well for the junior explorers that can emerge on the other side of financial turmoil with their assets intact.
“Those that are able to weather the down-cycles and maintain or advance their asset base will find themselves even better-positioned for future growth, and in our industry that growth lies in Asia and particularly in China,” Lindsay said.
China is an important customer for the copper, steelmaking coal and zinc mined by Teck. For this reason, the Vancouver, B.C.-based miner keeps close tabs on economic trends in the Middle Kingdom.
“China’s economy is expected to grow this year between 7 (percent) and 8 percent, and given that the country enjoys the largest foreign exchange reserves in the world, relatively low inflation and virtually no foreign debt, it has the full array of policy and monetary tools to maintain that level of growth,” Lindsay told the crowd.
Questioning the math of some Wall Street analysts, the Teck leader pointed out that the current growth of China’s economy adds some US$550 billion to the country’s gross domestic product per year; roughly double the US$250-US$350 billion GDP added by the country’s double digit growth rate of six or seven years ago.
Partnerships required For Teck, China’s expanding economy equates to a growing demand for the minerals it produces; and for exploration companies this means an increasing need for new discoveries.
“If the industry is going to continue to maintain or increase production, we are simply going to have to find new deposits; and for mining companies that will mean investing more heavily in exploration and in new partnerships in order to maintain that critical pipeline of development projects,” Lindsay hinted.
Further narrowing his wish-list, Lindsay reflected on Teck’s century-long tradition of developing long-lived projects in stable jurisdictions such as British Columbia, Chile and Alaska.
“Finding those long-life assets isn’t easy, and for a company that bases its strategy around those assets, it often requires partnerships,” he reminded the explorers in the crowd. “That is why we pride ourselves in being a partner of choice for mining ventures of all sizes; helping move discoveries through to production and building an inventory of long-life assets.”
“It is a strategy that has served Teck well over its 100-year history and continues to do so today,” Lindsay added.
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