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Andy Home from Reuters, how are you, sir? I’m very well. How are you? I am coping, let’s put it like that. I’m struggling to stay fit and mentally alert, but I’m coping Good, pleased to hear it What about you? How have you been keeping yourself busy? Yeah, I mean well last week was London Metals Exchange Week, which normally is the gathering of like all the greats and the good of the global metals industry in London, with a lot of partying, free champagne and sort of too many late nights All virtual this year, obviously. Zoom meetings, electronic webinars and all that but it was still a really good chance to take the collective pulse, if you like, from the metals industry. It always is. There are always great talking points there, as I said electronic this year but again it was a good snapshot of where we are, where we think we are, in terms of the metal market I mean, do you miss the conference component to it, you know like sliding up to someone in a corridor or behind a closed door, or did you manage to get a lot out of it virtually? Yeah, I mean, I get a lot out of it virtually because I want to hear what analysts have to say in public, but you’re quite right. I mean the real value quite often is, I call them the meetings over a couple of pints of beer, when people are much more open about discussing stuff So yeah, this time we had to sort of forgo that, and I have to add though that at my age, I’m increasingly less likely to be at the 2 o’clock or 3 o’clock morning parties So, that’s just the natural aging process but I mean, you’re right, I did miss that and of course that’s where the real conversations take place. But I mean we still had a lot of really good webinar events. There were a lot of good talking points that came out of it I think there’s got to be a graph somewhere which, based on pints drunk and how useful the information is, where I think the first 3 pints or so, you get the good stuff. After that it just deteriorates. I’m sure, by 2am, there’s nothing happening Listen, my disco days are long gone, I have to be honest with you. As a younger man, I was there for everything. The last couple of years, I’m tucked up in bed by midnight like Cinderella Good man. That sounds late to me. Right, so we’d better try and extract from you some of the learnings of last week, from LME, because as you say it’s valuable, all the main players are there, they’ve all got a voice. Shall we talk through some of the commodities? What was the big commodity of last week, do you think? You know, for me the winner was Copper. I think that came through very strongly webinar to webinar. The reason why? It’s a combination of factors. Seeing a very strong short-term market plan. But we also have a really building bullish narrative over the medium-term, and that’s really linked to what I call the global drive towards decarbonisation, right? Whichever way you want to look at this whole sort of agenda. You look at EVs, Electric Vehicles, you can look at smart grids, you can look at renewable energy, right? All of it needs Copper wiring. That’s building, as I said, there’s a nice future narrative and it’s combining with some extraordinarily bullish market optics at the moment. What are those? Well, very simply, China. China is importing refined Copper at record pace. I mean, the monthly imports at the moment are running at about 500,000t a month Let’s put that into perspective, right? If you add up all the visible stocks held by the exchanges of the world, London Metals Exchange, CME in the United States, Shanghai Futures Exchange in China, they hold less than that. So that amount of metal is being shipped every month right now to China What that is effectively doing is, all the surplus metal that was built up during out Covid lockdowns in the rest of the world is simply being hoovered into China. I’m not going to suggest that those imports are a true reflection of manufacturing uses in China. China’s sort of recovering extraordinarily fast from Covid lockdowns, but not that fast. So we are seeing stock building on a major scale, down the supply chain in China. So in some ways, it’s a redistribution of excess stock It’s being moved from the rest of the world to China, but that’s important because once it’s in China, it’s probably not going to come out again or if it comes out again, it’s going to come out as manufactured products, so air conditioner units, whatever So that actually has left the rest of the world feeling quite tight, and amazingly so considering that we saw manufacturing like just fall through the floor in the first couple of

quarters of this year, and even now we’re really struggling to recover, right? But I mean, it doesn’t matter. It’s all being shipped to China, and I think that has really, as I said, enthused analysts. And then you combine that with this building medium-term bull story. That I would suggest is why it was kind of the pick of last weeks’ event. Every quarter, Reuters holds a poll of base metal analysts, and we did so last week as well. Copper was also the winner of that poll in terms of analysts’ expectations for average pricing next year But there’s a really big caveat. The medium forecast for Cash Copper next year was USD$6,800/t, up 12.5% from what people were expecting this year, but low spot prices Now we’ve had a little sell off in Copper just this week, so we’re now at about a USD$6,700/t So that’s my carrier right? Analysts like it. In terms of average pricing next year, it seems to be the clear winner but they’re looking at a price, which is around current levels. So let’s not get too excited here. It’s not going to be making a linear price explosion, but that just reinforced the anecdotal sort of evidence I heard during the various webinars last week. Short-term. Very bullish optics A nice, building medium-term bull narrative So what do we understand about what China’s doing in terms of the stockpiling, you know, because they’ll have a quote that they want to reach, just to have it available for this new infrastructure build that they’re doing for the increased manufacturing, I guess we’ll see whether the West is there to buy the goods or not At some point they’re going to stop What’s that going to do to the price? Yeah well, I mean, we have seen this before and we saw it during the Global Financial Crisis 10-years ago. They are very keen on what they view as bargain basement prices, and they are in Yuan right now, right? The Yuan is strong relative to the dollar. We may look at some Copper and say it’s a strong price. They look at it and say, that’s a really good purchase price I would suggest you have two components here. You have a lot of speculation of the state planner, the State Reserves Bureau is in the market for strategic stocks. It’s tremendously secretive. I can’t tell you, no one else can tell you for sure, but it would make sense. More importantly though, I think if you put yourself into the shoes of a Chinese trader, let’s think – AFC, right? We have the communist party plenum going on at the moment We’re waiting for the 5-year plan. Everyone expects it to be Copper heavy. So if you know, for example, or you think that the state grid in China is going to go on a massive sort of Copper buying spree, as it sort of builds up more electrification, it makes sense to be ahead of that curve, from a Chinese merchant point of view, right? It really is quite simple. If you expect prices to go up and China is very close to the driving engine of Copper, and it makes sense that you see a lot of commercial stockpile building in China ahead of that. But yeah, cheap prices in Yuan. Very important point to remember Now, we’re sort of talking to a lot of mining companies, you know, wannabe Copper producers These are big infrastructure projects. These are USD$Bs of spend required to get these things going. Did you hear anything last week with regards to some of the centres outside of China, like US or Europe, in terms of their infrastructure build? In this kind of post-Covid world where we’re going to have to kick start the engine again? Yeah, I mean I think the European Union is the one really to watch right now, in terms of we know they are planning a sort of what they call a green recovery strategy. We know that decarbonisation will be a key driver of that. All positive for actually all metals, but Copper as well. Now, the big unknown is a little event called the US presidential elections next week, right? Mr Biden is also promising a massive green infrastructure program. You have the possibility of a green drives, metal intensive green drives in China, the European Union and the United States simultaneously. I’m not going to pre-judge what happens next week, but I mean even without that, what the European Union is looking at, which is massive investments in EV charging infrastructure, smart grids, it’s all positive news for Copper Then of course, I mean, China, it’s not just the recovery. We’ve had the President saying that they will be carbon-neutral by 2060 Wow. Wow. Just think about that. China is one of the biggest carbon emitters in the world. To get

there, it will have to electrify massively I mean, it’s already leading the electric vehicle revolution, so that’s why all eyes are on this kind of a meeting this week, and we’ll see what the new 5-year plan holds, but the expectations are it is going to be very metals intensive. Particularly when you look at a grid build, state grid company, you know, there are rumours and it is only rumours at this stage, their budget could be doubled from the last 5-year plan. What are they going to build? Wires. What do we use for wires? Copper, right? So as I said, I mean, China’s leading as always The European green recovery plan is coming together. It’s going to be mega. You’ve already seen individual recovery plans emphasising again green infrastructure, EV charging stations, etc. etc. If we get the same in the United States, you’ll have the entire developed world moving in the same direction at the same time It’s pretty frightening. But I think the thing that we should point out here is, we’re talking about infrastructure development and a green economy, but that doesn’t necessarily mean it’s dependent on the EV revolution. You know, that’s got a slightly different timeline to it and I think people don’t necessarily think of them as separate. So again, what are you hearing with regards to, what are your thoughts on the timing of this EV revolution? Because I read an article of yours with regards to Nickel, you know, suggests that we all need to temper their expectations on timing? I mean, look it’s not been a good year to say the least, for automotive anywhere. Anywhere at all, right? Whether that’s internal combustion engines, electric vehicles, everyone has taken a hit. Remember during the European lockdowns, assembly lines just closed Doesn’t matter where they were, they just stopped building cars. I think that has really pushed back, you know I refer to maybe a couple of lost years of the electric vehicle revolution. But, again, look at those recovery plans that are being unveiled across Europe They all put electric vehicles as an immediate winner, if you like. It’s something government’s can do very easily. They were always going to build electric vehicle charging stations, but there’s an acceleration of this now There’s an acceleration of subsidy schemes with electric vehicles. I would suggest that where China has really led this up until now, the next big accelerator if you like will be the European Union itself. But you’re absolutely right. The EV revolution is happening. I think it has taken a knock as the entire automotive industry has taken a knock this year, right? But I suspect that’s its going to come back very strongly as governments really bring focus in. It’s a really easy win-win for governments, if you think about it. It can revitalise manufacturing and meet decarbonisation goals But it’s only one part of a much bigger picture, as we all know. There’s no point in driving a nice, clean electric vehicle if your power’s coming from a Coal-fired power station So the second leg of this is renewable energy So you’re thinking of wind farms, solar panels, and you’re seeing, again, increasing progress on that insofar as, governments have stopped talking about vaguely, about 10-years time. Projects are now actually sort of like really being accelerated again, and again these are all very metals intensive. And beyond that, well then you have sort of like your electric vehicle, you have a nice, clean source of power let’s say, you need a grid. You need a smart grid. The grid’s going to have to handle sort different sort of like, I mean, functions if we’re all charging electric vehicles. So all these things kind of go hand in hand. You can’t have an EV revolution if we’re all still burning Coal. Therefore, renewable energy has to slot into place. But you can’t have that system without the grid being able to hand it in a way that we haven’t really built grids in the past. You look at the United Kingdom, for example When did we design our electricity grid? Decades ago. It’s there, it’s an old industrial economy grid if you think about it. They create energy They push it out to us. What you may be looking for in a smart grid is a 2-way close. You may want to charge your vehicle overnight. Maybe you don’t use it. Maybe you sell that to recharge into the grid. Outwards, not really capable of dong that at the moment, right? All these things must go hand in hand if you think about it, otherwise there’s no coherence to the strategy. What I see is that coming together in China,

and I see that coming together in the European Union, the United States we will wait and see We know that Mr Trump is not a great fan of the electric vehicle revolution. We know that Mr Biden is. So that’s the last leg to fall here, if you like. Al eyes on what happens next week It’s quite interesting. We’re in danger of getting into an economics discussion rather than metals there but you know, it’s a question of spending money to make money to kick-start these large infrastructure projects and get the country going again. China, they can afford that. Most of the European countries are, you know, under a burden of a large debt having financed their way through this kind of Covid period that we’re in. So, it’s interesting that these countries are electing to do it anyway. So let me bring it back to – let’s stay away from economics – let’s bring it back to metals. So we’ve established, for Copper, the demand story It’s there in a big way in those 3 centres The supply story doesn’t look so pretty Well, I mean, right now obviously the world has generated excess Copper, albeit, it’s been shipped to China. If you look at the growth scenarios, like for Copper demand, let’s say over even a 5 to10-year period. This mining industry has not got a great track record of meeting demand surges There are 2 reasons for that. I mean it’s getting more difficult to find what I call super tier-1 class Copper deposits. We all know this, right? We’ve been mining Copper as humans for a long, long time. You look at the big mines down in Chile. They’ve been operating for almost a century. Easy Copper seems to, it’s not there anymore. There may be, there are still like great resources say in the Democratic Republic of Congo, but the easy wins are not there. Certainly, you have an industry that historically has been prone to massive unexpected disruption. It could be strikes. It could be roadblocks with mines in Peru. You name it, it’s happened to the Copper industry. So you’re right, I mean right now it doesn’t feel like we’re in any danger of running out of Copper I’m just saying that if, I look at some of these demand projections that, the amount of Copper we are going to need globally in 10-yeras time, it may not be as easy for the world’s miners to meet that demand as we expect Just incidentally, as a said issue there, I think one of the things, one of the themes you’re going to see on the Copper supply side, is a much greater emphasis on recycled Copper. This is a really forgotten part of the supply chain, and to be honest with you again, the world, you know, we’re talking the United Kingdom. When I started this work in the late 1980s, we had 3 Copper refineries in the UK, right? 1 in Liverpool, and 2 in the midlands. All of them were running totally or partially on scrap. All of them closed in the 1990s. We have been sending our scrap to China for refining. Now, from a European Union perspective, from anyone’s perspective, this is a waste of resource. We’re going to need that Copper and also of course recycling is very, very environmentally friendly. It ticks that decarbonisation box very strongly, yeah? So I’m expecting to see, maybe as a by-product if you like of these trends evolving, a greater emphasis maybe on using scrap Copper that we’ve been sending to China, at home That may not be necessarily in new refineries but it may be manufacturers using more scrap into their mix. So that could potentially be quite an interesting area to look at. Again, to be honest with you, the rest of the world has really neglected this side of its Copper supply As I said, we contracted that, the whole thing out to China. China’s got really picky about what grades of Copper scrap it will take in now. You’re already seeing scraps surpluses in the rest of the world. That could be a real opportunity. That could be a real opportunity I think so. We’ve spoken to a few companies, one of them being Neometals, an Aussie company, coming into Europe and recycling batteries, just generally and extracting all sorts of minerals out of that process. I think we’ll see a lot more entrants into that marketplace. So I totally agree with you there. With regards to the Copper supply side, it feels to me that there’s more interest from the institutions to invest into these large Copper projects because they’re seeing this wave of demand coming down the line. So they are investing for sure

I would suggest there’s also a very important flip side to that. Institutional money may not be so keen to fund fossil fuel projects any more. Copper ticks your green funding; most of the metals tick that very nicely. One of the things I suspect we’re starting just to feel for if you like is that institutional money, which is increasingly wary of going down the fossil fuel, well what do you do with it? Where are you going to invest it? You put it in the bank, you’re going to get 0% interest rate, so I think that’s part of the story. You know, those ESG pressures on institutional money are only going to get more acute and that poses a real headache. I mean, if you’re managing a really large portfolio, and let’s say in the past you’ve really been happy to put your-, back, like, fracking projects in the United States, a lot of investors are going to say, ‘No, no, no We don’t’ want that any more.’ So where would you put your money? Metals have a much better ring, like a tinge if you like, than traditional fossil fuels. So that may also be the flipside of it Money’s got to find something to invest in, and if its a huge amount of money that’s flowed into the fossil fuel industry over the last 50-yeras If it doesn’t flow anymore, where does it go? Yeah, it’s still there obviously. We’ve noticed that because if you think back 5-years ago, we were looking at sort of ESG focused funds could struggle to find, well more than a handful I had a look about 3-weeks ago, I found 40. So the money is flowing into these green funds as it were and I think we’ll see a lot more of it The big boys are already there in the Blackstone Fidelity. They’re already there. It’s not just these small niche funds. These are the big boys. It’s interesting times Yeah, and the other market dimension to this, I mean moving away just from project finance, is again, you look at the big commodity baskets that people invest in, the heavyweight investors, they are all because of historical reasons very tilted towards fossil fuels, and I’m picking up suggestions that a lot of funds who haven’t really got involved in metals for many years, maybe, are getting interested in baskets for metals again Exactly the same sort of driver there. You don’t want necessarily to be bound by your shareholders every year, or quarter, about like where you’re investing your money. I’m not saying the trigger has fully been pulled yet in terms of asset allocation, but I’m detecting something shifting in the heavyweight fund money arena. It’s probably negative for fossil fuel contracts around the world. It’s probably positive for metal contracts No, I think that’s right. I think that’s right I want to move it on to, just cognizant of time; I want to talk about Nickel. So I’ve seen a headline: Nickel Surplus Looms as Electric Vehicle Buzz Fades. Now, that’s a headline, but based on what you just said a few moments ago, that is the case, but countries are going to play catch up. They’re going to throw money at this problem. So are you saying that we should be nervous about the immediate Nickel future, or actually it’s going to be okay? Well right now, actually Nickel this morning on the London Metals Exchange, has hit a new year to date high. When I say to you, I’m not going to win many fans for saying this, this has got nothing to do with EV by the way, this is really our old Nickel drivers. This is a shortage of ore going Nickel Pig Iron producers who feed China’s massive stainless steel industry. It’s a very traditional dynamic that’s playing out here. It is exciting We are reaching something of a crisis point Indonesia, which was the world’s largest supplier of Nickel ore to China, banned all exports this year. The Philippines is really struggling to catch up. So you have this dynamic is really sort of pushing the Nickel price at the moment But let’s turn to the EV side of it. Here’s a fact. EVs account for less than 5%, right now, of Nickel usage in the world. It’s going to increase massively, I have no doubt about that, but if you’re looking at what right now is the key driver, I’m going stainless steel. That’s where 75%-80% of all Nickel’s used, that’s what we’re seeing right now. Again, it comes back, there are 2 issues here why I think, it’s not just Nickel, you look at what’s happening across what I call the battery metal space, right? You saw Altura Mining coming into receivership, it’s a Lithium mine in Australia, low Lithium prices. Remember all the excitement about Lithium last year? It’s been a bad year for pricing of Lithium, it’s been a bad year for pricing of Cobalt, as I said, the EV story this year has gone into slow-mo

Something else though. It came as a bit of a surprise when Tesla, I mean Tesla has been very vocal about calling for more Nickel mines to supply its batteries, right? When Tesla started producing its Model 3 in China, it uses batteries without Nickel It uses an old technology called a Lithium Iron Phosphate, and again if you’re of my generation, you know what those are. They used to drive our milk floats around in London’s streets. I mean, a very low-grade battery. But that technology has steadily improved on the quiet over the last 3 or 4-years. It reduces the cost massively They’re much cheaper than Cobalt Nickel batteries, and I’m not going to say that this is the way Tesla’s going. Actually, it’s just a case of, it’s such a big differentiated auto-market, different solutions for different areas. So, model 3 in China, it’s city run-around. I don’t need 600, 700 mile, and actually, I mean given like the speed restrictions in most Chinese cities, you’re not going to go from 0-60mph very fast any time soon The message here is that the EV revolution is happening, the battery revolution is happening, but it doesn’t mean that every battery’s going to have Nickel in it, and Tesla’s just shown us that that’s going to be the case. So I think that’s one of the reasons, that comes as a little bit of a shock, I think, to all of us, as I said the story hasn’t gone away. I call it, it’s hit the slow lane this year and that’s a little bit because of, we all got reminded, there’s lots of battery technology out there, it doesn’t always have to include Nickel And as I sad, overall, automotive production has just had a terrible first half of the year. It will rev up again. What we call Nickel-Cobalt Manganese batteries, certainly in the west, are going to be an important component of that, but he chose, Mr Musk chose, a different battery technology for his Chinese production, which they may ship when they export Chinese models to other parts of Asia. Many technologies, I think a lot of people think this is a binary outcome. So it’s either got to be LFP batteries, which are old technology, or it’s got to be the new ones. No It’s going to be all of them. And by the way, it’s also probably going to be Hydrogen as well. Such is the scale of the decarbonisation challenges ahead of the world, every technology probably has a role to play in it. It won’t just be one, it’ll be all of them simultaneously. So I think that’s probably why a little bit, as I said, I’m just a bit wary of the EV story on Nickel right now It’s not been a good year for that narrative; it won’t go away. I’m telling you that much now There’s always going to be electric tingle around the Nickel market, and you can really see that in some ways in the forward-structure of the LME as well. There’s a big accumulation of what I call long-hitch positions, way down the curb, that’s European carmakers hedging their future needs So it’s there. It’s a physical reality but maybe this year, like Lithium, like Cobalt, it’s a slow-lane year. Everyone’s expecting these metals to bounce back strongly, whether it’s next year, the year after, I don’t know. But this year, slow lane Great, I like that, so it’s different designs for different use cases but it will slowly, over time, get to where it needs to get to Absolutely, and this comes back to, actually I’m a lot more positive about the battery metals now than I was maybe 3-months ago, because I just read evermore countries giving subsidies to these, a really key one by the way was the German subsidy system. You know, Germany has one of the biggest automotive sectors in the world, if you like. They chose not to grant subsidies to traditional vehicles, only to EVs That surprised a lot of my German friends So I’m sorry, if you’re making a fantastic ICE Mercedes or whatever, no subsides You’re making electronic? Yes. That’s just a really good indication of the way that governments are going to prioritise electric vehicles. So I’m actually much more confident in the outlook of battery metals as I see more of these schemes being unrolled around the world. 3-months ago, it did look really bad but I can see a really fast reacceleration now, of EV manufacturing of course, with EV manufacturing, you need the batteries and you need the materials for the batteries Absolutely. So what did you make of the Tesla battery day? There seemed to be some theatrics to it and some kidology and some pretty interesting things, it was a real sort of mixed bag. What was your big take away from that? My biggest single takeaway, I’ve read this, you’d better double check this though, isn’t it amazing

that, I think over 1M people have tuned in either live or afterwards to Tesla’s battery day. We’re taking about batteries. This is kind of like, not the most sexy thing, right? The level of interest though, He wasn’t talking about his new cars, he was just talking about batteries To get that level of interest, that’s my big take away. Batteries are kind of, they’re such a hot topic. Really, did anyone talk about batteries 10-yeras ago? Not that I’m aware of. If you were talking about batteries, it was the Lead acid batteries, right? No. That was my biggest single take away. I mean, there’s always going to be theatrics around Mr Musk. That’s just the nature of the guy, but that was my biggest single like, yeah, man, that’s a of of people getting interested in battery manufacturing, right? It is. I liked it because I learned a lot about the manufacturing process, the need for efficiencies in the manufacturing process in terms of speed and scale, so what you could do within a limited space and how they were designing these batteries. I though tit was fascinating, like everyone, I probably imagine there’s a few car enthusiasts listening in because they expected the theatrics too, but just wondered again if you heard anything from last week. What did the industry make of it? Because he is kind of showing them up in a way. He is, you know, getting the attention He’s getting the attention. He’s making his case. I mean, he’s a buyer of metals so the more metals are mined, better for Mr Musk I mean, everyone gets to talk their book I think the other interesting dynamic though, and Tesla’s a great example of this, and it kind of fits into our green theme here You buy an electric vehicle and you buy it because you want to do a good thing for the environment, etc. It doesn’t do the manufacturer or you any good if those metals are coming from, shall I put it, dirty origins. I think one of Mr Musk’s priorities, he can go and buy the metals he needs, but he wants them to be green metals He doesn’t want them to be associated with mines where the tailings have been dumped in the sea. He doesn’t want them to be associated with artisanal workers in the DRC. He wants clean metals, and so will everyone else. I think one of the little prompts he gave the industry specifically with his talk of a North American Lithium project, is he wants them close to home and he wants to know that they tick all the ESG boxes. Otherwise, what’s the point of making your fantastic green, clean vehicle if someone goes, hold on, you know where your materials came from, you really don’t want to be, so I think that’s another element to what he’s trying to do. I think we’ll see this becoming increasingly important Green revolution needs green metals. The audit trails are being built steadily around us. I mean, people, you know, you could go onto the Apple website, they will list every mine and refinery supplying their metals. Prior to Apple doing that, no one had even thought about that. Guess what, all the other big consumer companies are doing the same thing now. So people want to see, I’ll buy your product, you tell me it’s really clean and it’s going to be good for the environment, you show me that you have sourced that in the most compliant way that you can. I don’t think it’s any coincidence that I mean, he started referencing, oh maybe there’s a Lithium deposit in the States, maybe I don’t have to buy it from somewhere. Yeah, that’s part of that agenda. Whether it happens or not, I’m not sure but I mean, I think what you’re going to see is a lot of big automotive manufacturers, and other consumer durable manufacturers, starting to look very carefully at where their mines are. Where their refineries are. So you know, think about that. We haven’t really asked those questions around metal supply chains really in the past. Just getting them from a dirty operation using child labour down in the Congo is simply no longer an option for anyone So you’re going to be looking at either trying to transform the industry down there, and to be fair, Tesla’s been very supportive of that. I mean, there are lots of projects underway to integrate artisanal mining into the official sector, very positive. But you’re also going to see a drive to look at mines, maybe in the United States, Canada, Australia, with very high environmental standards, as opposed to maybe some of the other countries that we have traditionally sourced material from I think it’s getting fascinating. I get it, Cobalt from the Congo using child labour doesn’t sound good on any level. You know, deep sea tailing dumps, not good on any level. I can see why companies would want to track their supply

chain and even show their customers that they’re tracking their supply chain, but making these demands for cleaner products, we’ve seen it with Canada Nickel Corp coming up with their net 0, you know, when they’re talking about the Carbon sequestration into their sulphide projects We’ve seen it in any companies where they’re saying, ‘We can provide a cleaner solution to you, but it’s going to cost you.’ Are people going to pay more for a greener solution or are they going to say, ‘Guess what, mining person, that’s your person. We’ll buy at market but we’ll buy from you if you’re greener than the next guy.’ How’s that going to work? It kind of very much depends on the product. If you think about, for example, your Apple phone, contains multiple metallic elements, none of which really determine the price of the phone They’ve all got an input cost but the phone is actually, the value of the phone is far greater than the cost of the metal. That’s less so of course with the electric batteries where the input cost of the metals is very high, but coming down we should say. So it depends, but there’s also another element here, I think which is important to think about You may not have a choice. Let’s take an example of Aluminium, which goes into all sorts of things including Mr Musk’s cars. European Union is seriously, I think, within a couple of years, have carbon borders. If your Aluminium has not got a low carbon footprint, guess what, it’s going to be taxed at the border. Yeah, so I mean there’s government overrides coming in here, I think, increasingly. I just wanted to throw out yet another element into this, and again going and looking at someone like Tesla, where they’re sourcing their materials, it’s no secret that Chinese battery makers have absolutely dominated the supply chain up until now What do we do in a de-globalisation environment? You look at what the European Union’s saying about how it wants to go green. That goes hand in hand with, they want to have their own resources They don’t want to be dependent on China, or anyone else for that matter. I think one of the things that’s not too different between the 2 presidential candidates is that same drive We want it either at home, these resources, or we want it from a friendly country. I call it redrawing the metals maps. This concept that I mean all manufacturing takes place in China, we don’t ask questions where they source their material from and they just ship us over fantastic products. I think we’ve reached peak globalisation from that point of view. So I think it’s what the European Union call strategic autonomy, I think that’s also a really key factor in terms of the cost of products So it goes hand in hand if you like with that decarbonisation drive. We are going to probably be looking at not so much a globalised-flow world as maybe more a regional metals flow world Strategic alliances. Canada, America and Australia in what they call a critical materials area European Union, Japan. The world is being redrawn to some extent. It’s very difficult to keep track of all these because there are multiple initiatives underway, but even China, where you’ll hear a lot coming out of this week’s meeting with the communist part, is a dual singularity economy That means make more in China and keep more in China. Everyone’s moving in the same direction Massively, that has cost implications but the consumer may not have that much point It’s not a new idea is it? We probably grew up with Made in Britain, Made in the USA This sort of protectionism component to this de-globalisation is in some ways quite damaging to international relationships, but everyone’s got to look after their own We talked at the beginning of this conversation about, there’s the China pool, there’s Europe, there’s USA, North America. Everyone’s putting out these critical mineral lists, and you’re trying to, we’re going to fund our own ecosystem, the Europeans have allocated 100Bs towards that, incentivising people to mine in Europe, which wasn’t really de rigueur for the last 30-years. People are going back into countries like Germany and the like, Poland and so forth, mining again, which they haven’t done properly for a long time I mean, in many ways this goes back to 2010, when China, which is the dominant Rare Earths producer of the world, stopped supplying the export market They claimed it was because they were having an

environmental audit. Everyone suspected it might be about a dispute with Japan over some disputed islands. That’s when you saw the rare earth prices rocket. It was a major wake up call, particularly in the United States. You cannot identify China as your long-term strategic rival in the geopolitical sphere and be dependent on them for every single bit of military hardware that you have. No wars are ever won that way, to be blunt about it. I think you’re seeing, that was the wake up call 10-yeras ago, and you ‘ve seen momentum build ever since. Then you look at China and US relations now. What id they stopped exporting car batteries? What are we going to do? That’s a real strategic geopolitical sort of like concern here, and the European Union is waking up to it as well. As I said, it really, really wants to be autonomous if it can be. It’s going to be a big challenge for them, but everyone’s singing from the same songbook at the moment and minerals, metals are kind of cutting edge, really. They’re at the forefront of this struggle, if you like Recycling. More recycling Recycling. That why recycling ticks lots of boxes. I mean, it’s environmentally clean but you do it at home, and it’s efficient, and you don’t rely on anyone else for recycled materials. It is really one to watch at the moment. You’re already seeing, everyone’s trying to recycle electric car batteries. It’s still formative technology That’s the way we’re going to go, though. I have no doubt about it I agree with you. I want to see more of it. I’m going to briefly touch upon Zinc, because the thing I really want to talk about is Tin. Zinc had a good few months Really good, really good. Again, expectations are like, being a repeat of these, having to be adjusted in the Zinc market. So you go back to the start of this year. Zinc had a good price performance in the last couple of years, but as always happens with commodities, strong prices mean more supply. So we were all battening down the hatches, I think, of the Zinc market. We expected a lot of mines to come in, almost to wash over the market this year, but that just simply hasn’t happened because of Coronavirus What I call the lockdown lottery, which countries have to take lockdowns in their mining sectors, yeah Zinc got hit harder than any other metal because 3 countries in particular, Peru, Mexico, Bolivia, massive producers, massive suppliers to Chinese smelters, all took huge hits. Some of them haven’t got back, by the way. They are still operating below capacity. So we kind of have to, I think, collectively readjust our expectations. We have not seen any massive surplus of mining material. In fact, the market’s running short of it. We have seen Chinese smelters particularly in the first half of this year struggling to maintain production. You always know the Chinese smelter feed problems when they take early maintenance shutdowns. You saw that right across the second quarter in China. Now having said which, that’s where we are now. Market’s readjusting it’s views about, oh right, this is not going to be such a big year over supply then It may be building though. International Lead and Zinc Study Group issued one of their annual forecasts last week. They’re looking at big surpluses on refined metal next year. We’ve seen some of it show up on the London Metal Exchange, not all of it. But here’s the thing. So far, just in the way I was talking about how China had basically cleared excess Copper out of the rest of the world, China’s imports of Zinc, not that strong so far. I think there are great expectations. We might see some good arbitrage flows but the excess metal is here It’s sitting here, it’s weighing on price. You don’t see it so much in price, you see it on the spreads on the London Metals Exchange, which is super loose, and you have seen some quite chunky deliveries into LME warehouses I think there’s nervousness about how much more potential the Zinc price has from these levels. These are strong levels for Zinc, right? You’re looking next year, I mean you’ve got the ILZSG, the best statistical global body we have, it’s looking at a surplus of 1Mt this year and next. If that is in any way correct, I’m a little bit sceptical really how much further Zinc can go on the upside. But you’re right, right now it’s got momentum, the momentum funds love it, they’re all playing it. Market can go a long way before like a fundamentals rationale sort of like, I mean, determines anything So it’s very much, it’s the one in vogue right now. Little bit wary of it, though Okay. That’s fascinating. That’s really insightful, helps us elsewhere Something else that we’re looking at So let’s talk about Tin, okay. So MIT

did a study and came out with something quite surprising, so why don’t you tell us what that was and maybe we can talk about the Tin market? Yeah, this is the, Tin is the forgotten critical metal, as I call it. So yeah, MIT did a study. It was commissioned by Rio Tinto about a year ago and the question was, ‘Hey, look at all the new technologies out there and tell us which metals are going be the winners out of this.’ Tin won It beat Lithium, it beat Cobalt, it beat Copper Which is really surprising, right? I happen to know that the international Tin Association was itself surprised by this outcome and have had to run off and do their own research now But the answer is actually quite obvious if you think about it. A man of my generation, when I think Tin, I think of one product. The Tin can Non-perishable goods. Long-term storage. You know what, Tin-plating now accounts for about 40%-50% of global Tin usage. Do you know what the biggest usage is? That fit half of it? Nano-soldering. Every circuit board that you can imagine is soldered together with Tin It’s called the glue of the Internet. So what MIT was looking at was, whether we’re looking at EVs, which are going to need more Nano-soldering in their electronic circuits, or particularly what we call the fourth industrial revolution, The Internet of Things, machine learning, all this kind of groovy stuff from the science fiction. It’s all going to be held together by appliances using Nano-soldering, using Tin. It is on the US critical minerals list. It’s not on the European critical minerals list. I would suggest that’s because there is one big producer, refined producer in Europe, Metallo, which is now part of the Norddeutsche Affinerie or Arubis, as it’s now called. So they do have a strong domestic supply and the US doesn’t The US is a massive importer of Tin. So that may explain why it’s on one critical list and not the other. It’s one of the very few differences between the 2. The really interesting question is, one of the things we’re kind of expecting to see out of this meeting in China this week, the next 5-year plan, is whether they decide to stockpile what they view as critical minerals Tin’s under discussion. Now bear in mind, China’s the biggest Tin producer in the world, and if it is thinking about, man maybe we need to build up some stocks here, they are probably looking at exactly the same dynamics as that MIT study. Remember, China wants to own the new technology race. It wants to own solar panels. It wants to own electric vehicles Maybe it is waking up to, ‘Hey, we’re going to need a bit more Tin than we have here.’ China is the world’s largest producer, it’s got big mines but actually in the last few years, it’s become really dependent on raw materials from it’s Southern neighbour, Myanmar. There’s a couple of, China’s biggest producers are pretty much only treating mine material from Myanmar now. Problem with that is, those deposits are degrading really fast. So I’m not going to try and second-guess what the Chinese communist party decides on this one. For me, even the fact it’s on a potential hit list of metals they might want to stockpile, tells you that we’re not talking about Tin cans anymore here. They’re looking at it exactly the same way MIT’s looking down that road, what holds all these machines together that are going to connect our virtual and artificial intelligence worlds. Well at the moment, tiny, tiny bits of Tin soldering Amazing. Tin, the glue holding the future together Yeah, but that was the MIT finding basically. I don’t think even the Tin market is particularly, you know, it’s still getting its head around this if you like. I mean, it’s not been a particularly strong market over the last few years. Again, you know, Tin plating is a dying industry They’re using ever-thinner coats of Tin and Steel. We’re also using more Aluminium, more plastic packaging. I think the entire market has got a bit fixated on this decline usage area and slowly forgotten about what may be coming round the corner. That MIT analysis really was a wake up call I think, myself included by the way It’s interesting. People have certain perceptions Well, investors, that we’re talking to, they have perceptions about certain metals Nickel, no one thinks of it in stainless steel Copper, the green revolution coming down the line, I think people do get that, but interesting. So what’s the mood of the nation, Andy? We look like we’re about to go into a cycle, which the precocious metals are benefiting from because there’s nervousness about the economy, all of this quantitative easing, what the future holds, the US elections amongst many things So precious metals are doing well but for these base metals, for these battery metals,

you feel that, are we about to enter a positive cycle for all of those? It feels that way but look, I mean, if I had to use one word to describe the current sentiment across the base metals complex, it’s uncertainty. We have a one-legged recovery in terms of metals at the moment. China has bounced back with virtually zero economic scarring as far as I can see. As you and I both know, sitting here in the UK, this is simply not the way the rest of the world is following. We have a stop-start recovery. Frankly, we’re going to be completely dependant on whether we can contain the pandemic. There’s a pretty gloomy forecast out there for metals demand. Serous economic scarring could take place and we could be below pre-Covid levels for a couple of years yet But it all comes down to, what are governments going to do about it? If they really deliver on their green infrastructure revolutions, that will not only reboot economies but of course it’s going to be massively metals intensive. So, uncertainty right now. There’s just too much in the mix. The US presidential election particularly. I mean, this has become normal for all financial markets, maybe apart from Gold Take the money off the table, let’s see what happens first. Then roll that into, as I said, where the rest of the world is in controlling the pandemic, uncertainty rules right now I think that conviction generally across the investment space in metals, is pretty low Everyone’s on hold, everyone’s waiting to see. We know China’s recovered. We just don’t know what the rest of the world looks like. What I guess I’m saying is, what I’m reading or what I’m seeing in terms of recovery plans, in terms of decarbonisation, in terms of renewable energy, none of this happens without a massive usage of metals such as Copper, Tin, Aluminium, all of them basically. The only question is, when does that really take root? When does it kick in? When does it gain traction? Not this year, too early, right? Next year, maybe. Year after that, almost certainly. Growing momentum. So, uncertainty now? Yeah, I mean there’s a lot of buzz I think and quite rightly so, about medium-term outlook. But before we get there, there’s a little thing called Covid-19 that we have to get under control You’re not going to see investor conviction really come back until you see the pandemic controlled I’d agree with that. We need that kind of positively from the government to invest money into things that are positive. Infrastructure is great. I always get nervous when the Gold price goes up, because it means something’s wrong It’s telling you something. It’s a great uncertainty sort of metal, so it’s almost telling you itself how much uncertainty is out there. I mean, the way I expressed it is, quite recently is, when I look at demand profiles for something like Copper, there are sunny uplands ahead but before we get there, we’re going to have quite a long, hard slog for a year, maybe longer. I don’t know, and no one else knows at the moment The demand pitch is, really across the metallic board, very strong, but when do we get there? That’s the key question and it could be, we could have a hard road and a bumpy road before we start reaping the rewards of that. It’s the nature of markets that they try and anticipate what the future is, and that’s one of the reasons Copper is actually quite high in price at the moment, funds are trying to get ahead of that curve. They could equally get out of the Copper price if things just don’t pan out well over the next 6-months Yeah, it’ll be better for the soul if these base metals and battery metals do do well, because it’d suggest there are some good things happening in the economy. Last question. Gold or Silver? One of my great privileges in life is I don’t cover precious metals Give it, what’s your thought? Gold’s had such a great run, hasn’t it, and I kind of wonder whether it’s had its run, basically Silver’s more interesting I think, from that point of view. As I said, it’s my great privilege that I don’t have to worry about the Gold price, which is a very, very difficult market indeed Oh right, there’s some great people out there with some very strong views, as you say. Wise man. Andy, thank you so much. What a run through. What a romp Pleasure as always, nice talking to you Looks like, I mean like I say, you’re prolific as ever and people should be going to Reuters and looking at some of the articles you’re producing. They’re fantastic, they’re insightful, they get to the point real quick so appreciate your writing and I appreciate you spending your time with us. Thank you Thank you for inviting me to have a chat with you. It’s always nice to catch up

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