‘You have to think, not believe’: Canadian Mining Symposium day 2 features Don Lindsay, Jeffrey Christian

The second day of the Canadian Mining Symposium (CMS) went global on June 17, with the virtual event bringing together another set of speakers from across a wide spectrum of the industry. The sessions ran the gamut from technical presentations to discussions with junior miners, as well as in-depth and personal conversations with some of the biggest names in the business.

The morning began with Anthony Vaccaro, Group Publisher of The Northern Miner and Head of Global Mining for Glacier Resource Innovation Group, telling the online audience that, based on the feedback received after day 1, there was a sense that the CMS had already surpassed the expectations of attendees.

Clearly there is a desire among those in the mining community to find ways to overcome the lockdowns and remote settings created by the global pandemic and keep the lines of communication open. And this is something Vaccaro believes the CMS can help facilitate.

So it was only fitting that the first presentation of the day was a technical one from Nokia that showcased their Digital Automation Cloud, an enhanced, secure communications solution for the mining industry.

Stephan Litjens, Nokia’s general manager, digital automation, detailed what the firm calls their 5G-ready Digital Mine (though it can also operate with 4G technology). This end-to-end platform brings industrial-grade digitalization to miners, allowing for the creation of private wireless networks that can operate both above and below ground. Litjens highlighted that the platform was specifically designed to operate in harsh, industrial settings.

The next speaker at the symposium was the first to be appearing not from their head office nor even their home office. Instead, Don Lindsay, President and CEO of Teck Resources (TSX: TECK.B; NYSE: TCK) was appearing from his firm’s Fording River steelmaking coal operation in southeastern British Columbia.

Teck CEO Don Lindsay speaks during an interview with Northern Miner editor-in-chief Trish Saywell at the Canadian Mining Symposium on Zoom.

From the steelmaking coal mine, one of four Teck operates in B.C.’s Elk Valley, Lindsay sat down for an Executive Fireside Chat with Trish Saywell, The Northern Miner’s Editor-in-Chief. Their talk began as Lindsay was asked about his early days in the mining business.

“My first real job was working underground in Uranium City,” Lindsay said, recalling the community in northwestern Saskatchewan where the young mining engineer began his long career. And he loved it from the get-go.

This led him to Labrador City in 1980, when he was hired by the Iron Ore Company of Canada, an experience that began hitting the ground running. “By midnight of the first day on the job I was a foreman,” Lindsay said with a laugh, remembering a job for which he felt he was wholly unprepared for. Especially as all the other veteran miners were watching his every move, and every mistake. He recalled that, “If you made it from September to Christmas, they adopted you.”

Lindsay did, in fact, make it through this initiation into the world of hard rock mining. He also told Saywell that it was in Labrador City that he used every moment he had to learn about all the equipment being used at the mine. When asked if he could operate just about any piece of equipment at a mine, Lindsay smiled and nodded.

Being open to broadening his knowledge base came in handy as Lindsay next transitioned to the financial sector. He went to work at CIBC and eventually founded their mining group. And it was while at CIBC that Lindsay says his eyes were first opened to the then developing markets in Asia.

Since leaving the financial sector and returning to the mining side of things, Lindsay has continued to broaden his understanding of global markets.

This led Saywell to ask about the firm’s partial pivot away from China and towards India, when it comes to exports of steelmaking coal.

“We all have ‘Chinese price risks,’” was one reason Lindsay gave, referring to overreliance on a single national market.

It was five years ago, he said, that Teck began reducing volume exports of coal to China and increasing them to India. Back then they were shipping just, “250,000 tonnes to India. Today, [that’s] over 4 million tonnes — more than to China.”

He reminded the audience that steelmaking coal still makes up about half of Teck’s revenues, calling it a core business for the firm. However, he said this would be changing in the future.

“We’re taking revenue from coal and zinc and putting it into our copper business,” adding that, “We intend our copper business to be our largest business.”

Lindsay told Saywell that he is enthusiastic about new technologies in the mining sector, as well. In particular, he mentioned Race21, Teck’s business transformation program, which he described as data mining that would increase safety, production and eventually reduce operating costs.

When asked by an attendee about green vehicles in mines, Lindsay had a blunt answer. “I ultimately think we’ll see electric haul trucks, and sooner than people think.”

As the chat wound down, Lindsay highlighted an important reason for his trip to Fording River: to personally thank Teck’s employees for the last 100 days of working under the stress of the Covid-19 pandemic.

“We are our brother’s keeper,” he said, while also emphasizing that 2020 will continue to be difficult.

“It’s going to be a rough year ahead as Covid goes through developing countries,” he cautioned. And even in countries where people hope the worst may be over – such as Canada – Lindsay wanted to remind everyone that, “We have got to keep the focus. The key is to not get complacent.”

Caution for the future was also highlighted by the midday talk from Jeffrey Christian, the Managing Partner of CPM Group, a commodities research and financial consulting firm.

From his base in New York, Christian spoke to Frik Els, Executive Editor of The Northern Miner’s sister publication MINING.com. Their talk began with Els asking how the current economic recession differs from previous events.

“What we’re living through today is radically different from Black Monday,” Christian said referring to the stock market crash of 1987. “Or any recession we’ve encountered, anything going back to World War Two. Even in January of this year, we didn’t expect a recession.”

The main difference, according to Christian, is that the current recession was caused by governments shutting down economies. And, he added, the way things recover will also be guided by government actions.

“Manage your portfolios in the expectation that there will be disruptions,” Christian advised the audience.

Els asked him about the bullish interest within the mining community surrounding electric vehicles (EVs), something Christian wrote about back in 1979.

“You have to think, not believe,” he cautioned. “There’s not enough electricity to power EVs. You have all kinds of structural impediments to EVs.”

Christian went on to recall how in the early 1990s the European Union (EU) heavily promoted and subsidized diesel, in the mistaken belief it was a cleaner fuel source than gasoline. It would not be until the mid-00s that the EU realized they had made a mistake, by which time diesel-powered vehicles were everywhere on the continent.

“Electric vehicles are not nearly as clean as people think they are. And that could come back to whack the EV industry in the same manner that diesel vehicles were hit in the EU.”

When asked which commodities have the most potential for growth as we recover from Covid-19, Christian said he believes copper has great potential to keep rising in demand. However, he does not think its price will continue to rise with that demand, simply because the supply will eventually increase.

As to gold, Christian said, “Our view is that the price rises over the course of the year, though maybe it’ll go sideways or down a bit in July, August. But we see 3-5 years from now another global recession, and in that environment we see gold continuing to historical [highs].”

However, he was quick to add, with a chuckle, “But what could upset that is the world could get better.”