‘Change is coming’: Roskill’s Robert Baylis on supply chains, ESG and commodities at the Global Mining Symposium

As the Covid-19 pandemic shutdown economies around the globe, it revealed a number of underlying problems with regional supply chains. The production of copper, cobalt, lithium and other key metals and minerals were severely impacted, leading to supply and demand problems internationally.

As part of The Northern Miner’s Global Mining Symposium, Frik Els, executive editor of sister publication MINING.com, spoke to Roskill’s managing director, Robert Baylis, about some of the issues related to fractured supply chains.

Els began the conversation by asking if the trade tensions between the United States and China, as well as the worldwide impact of the pandemic, were signs that a fundamental shift was occurring within mining supply chains.

“I’m not sure we are seeing fundamental changes,” said Baylis, but he did highlight three factors that had become apparent this year.

The first is U.S. trade policies that have become increasingly protectionist in nature. Baylis reminded the audience that these trade policies have not only been targeted at China, as Canada also saw aluminum and steel tariffs imposed by the Trump administration.

The second factor, said Baylis, was the realization that “many countries and regions were relying on concentrated sources for their materials.” All it took was for one country to go into lockdown and the disruptions began.

Finally, he said the pandemic raised awareness that rare, unpredictable events for which society is unprepared may occur and disrupt physical trade.

Shifting to environmental, social and governance (ESG) issues, Els asked if it was wishful thinking that consumers would pay a premium for a commodity produced, for example, from a “green mine”.

“I do think there is a place in the market for that,” replied Baylis. “You [will] pay because you see a benefit to the environment and whatnot.” However, he did caution that paying a premium for a sustainable metal is an idea that was still seeking acceptance in the marketplace.

Roskill’s Baylis then shared his opinion about the dynamics in the markets for specialty and technology metals, which he characterized as having smaller markets.

“A lot of these metals do have a concentration of production,” he said. “You can generally say that most of the rare metals have better growth prospects, though the volume may be quite small and not noticed.”

The conversation then turned to environmental issues, with MINING.com’s Els asking when the tipping point would be reached for fossil fuels, such as coal?

“I think that change is coming, and it’s coming pretty quickly,” he answered. “We’ve already seen it with coal.” Baylis then highlighted how the German government had been subsidizing coal miners to exit the sector.

When asked about copper, Baylis replied, “Copper, in the long term, you would always think would do well. With electrification, copper plays a big role. However, in the short term, the price rise is really about Chinese consumption.”

Els asked about the lithium market and lithium miners.

“Yes, it’s been a tough ride the last twelve months,” Baylis said. “But it could be a rapid turnaround. We think demand is going to come back, next year, with stronger electric vehicle demands.”