Why you should give a s**t about aluminium

Right home money miners talk about a bloody aluminium and alumina and bauxite spectacular coming your way. And tell you what, if you want to move an absolute shit load of bauxite, MMS would friggin move that for you. Or any other bloody blasted Rock You can think of. They are the movers of it. That's all you need to know. Give them a bell. They move it, they mine it, they make you money. They can be a bauxite

specialist, right boys? You've got the absolute OG legend of those three things I just said. This is aluminium Allen. There's no better way to to talk about him other than this is the guy you want insight into a market, which is pretty damn kind of nation requires like, you know, decades and decades of expertise to understand and and tentacles into China. This is the guy Aluminium Allen. He wasn't named Alan by accident from. Perth he was. Destined to be an aluminium

expert. That was it's our boy. It was sensational yarn. We RIP it in or you want to give a bit of context. 2 bit two things one is this was probably top three favourite conversation I've ever had on this show like it was it was just freaking awesome.

You can probably tell JD and I are frotham the whole way through it. The other, the other thing I'd point out is we actually recorded this right before the day before the news came out that, that, you know, this GAC, this bauxite miner in, in, in Guinea, which is owned by sort of the Emirates countries was having issues exporting bauxite.

And so Alan in some ways is a bit prophetic when he talks about, you know, some of the some of the tightness in the market and some of the the challenges that come around the, you know, the world's addiction to Guinea, Guinea in particular. Well said. Alan is a true Gen and I think we've said enough. Let's cut to the cut to the show. It was a truly awesome discussion. Awesome, here we go.

Alrighty, we've got aluminium Au with us here today and I think the the natural place to start this conversation now is why should people give a shit about bauxite alumina aluminium? That's a very good question. Why should they give a shit? A lot of people would say, well, they shouldn't. But I think when you look at the role that aluminium plays, you know, in society, look at the the different markets that

aluminium feeds into. This is one of the things that differentiates it from, you know, from steel or from copper or from, you know, some of these other metals is that now it's used all over the place. I mean, I'm holding a can here, right, which is aluminium, of course. And so it's packaging, it's construction, it's electrification, it's transport, it's consumer durables, all this, all these different applications, which makes it

quite a versatile metal. So and kind of no matter where you look, you're going to see it somewhere. So people should care a little bit more about it, I'd say. Yeah. I think that the, the care factor is somewhat proportionate to the, you know, ability for people to get it like, you know, financial exposure. There's not, there's not like 20 aluminium stocks out there that people. To gamble on. Stocks for people to gamble on, gamble on literally.

Yeah, that's true. Maybe if we're in like, yeah, Zorgo or London or wherever the traders are, there's a bit more not knowledge in this area. But here in Perth, like where people care, like interested in mining, despite the fact that we have a, a, a pretty substantial, you know, bauxite mining industry here and, and you know, refining industry here, we kind of don't follow this externally as much as we should. Well, maybe that will all change now.

Because I think like one of the reasons those those sorts of people are interested in it as well, Trev, is because it's a market of serious scale. Like it's you go down the, the metals, you sort of have, I guess energy and all to start with. And then maybe iron ore, which has been a tough one for commodity traders to kind of crack in a way, but books out the whole complex, you know, aluminium complex is there because it's of serious scale.

And you, you hear about trafficker and and other sorts of groups playing around and LME types of dynamics because it is a a market of serious size, right? Well, it is. I mean, last year I think 400 million tonnes of books aren't mined worldwide, so fairly substantial and 100 million tonnes of that was here in Australia, so 4. 400 million tonnes of bauxite. 400 million tonnes of bauxite. Yeah, how much bauxite is required to get to like? Well, that's a very good

question. And that's half the problem I think with bauxite when you use the word bauxite because you kind of think of this generic kind of this mineral, right? Yes, Bauxite is not a mineral. It's just a it's just a generic term we we bought in a few props. Some samples. A couple a couple different samples. Of that's right, one from northern Australians, a couple there from Guinea. But this is this is northern Australia bauxite.

Yeah. The thing about the thing you've got to remember about, you know, the word bauxite is actually refers to three different minerals, right, Gibbsite, Baumite and diaspora, they're all bauxites and they're all very different. And so how you treat them is very different. So you know your the alumina refiner, it's going to process that those different types of bauxite now that has to be built purpose built for that

particular bauxite. Maybe you start changing bulk sites and alumina refineries and it's a disaster. So is that that the the fact that the the downstream is so like like spec built to what whatever is being mined? Is that why the industry's evolved in such a way where you see so much of the the vertical industry integration is like so immediate. There's like mind, mind to mouth strategies of the of the. That's right. I mean it's called the mind mouth to refinery model, right.

So what that means is that the that the refinery is designed, it's purpose designed for a particular bauxite. So the three refineries that are operating here in WA, Darling Range bauxite can't put, you can't put Queensland that stuff there in the jar. You can't put that into a Western Australian refinery. That's like putting diesel into a petrol engine. It's not going to work. And it's also. We all. Have to, to go one step further from the the sort of tailored

specification of the refinery. It's also that much more uneconomic to do so and to to look into the seaborne market, which is a a threat that we might talk about a bit more. Yeah, yeah. I mean, I think to get to that, we've got to kind of wind back time a little bit to to to see how we've maybe got to that seaborne market and try to understand what the seaborne market really is today, because I don't think it's what people actually think it is.

No, wait, wait. Like an aluminium like well, you know aluminium industry evolved relatively recently as well, right? Like what's the history with the emergence of it? Because like, I'm a student of commodity, commodity markets, but even I don't know much about this. All I know is that Rio paid too much at the top of cycle for. Sure. We'll get to that. Yeah. I mean, well, it's recently in that sense.

I mean, you know, when it was first produced, you know, using electrolysis, you know, all those years ago, 1880s, it was, it was more valuable than gold until somebody kind of figured out how to make it cheaply. And now it's not. And it's so. So as a as a tech breakthrough that enabled. Yeah, well it's a whole Rd process. It's electrolysis. I mean the some things just some basic things about aluminium, right. I mean you know, you, you smelt it from its oxide AL2O3AL2O3 is is corundum.

I mean you think of most scale of hardness, right? This stuff is incredibly hard. The bonds are very strong. So to bust it, you need a lot of energy, a lot of electricity, you know, to break it apart. And it's broken apart in the cell where it produces the, the metal and carbon dioxide because the anodes are the anodes are carbon. All right. So it's a big producer of carbon dioxide that in the now in the, in the technology that's used

today. But it, I mean, having said that, if it's, if you know, you, you place a smelter somewhere where you've got access to low cost electricity and you've got access to alumina, then it's a low cost process. And you know, Australia's got a, you know, it's got a huge history in the, in the aluminium sector. We've had a smelter in in Tasmania since 1955 still running today, running very well and it's running on hydropower owned. By South 32. Owned by Rio. Rio. Sorry. Yeah, Sorry.

Yeah. Bell by smelter. Yeah, yeah. And then if we we'll check a map up right now, if we look around the around the world, we can sort of point to the other kind of pockets where cheap energy and yeah, refineries kind of go together. Let me talk through that for a moment. There's China. Yeah. Then there's China. Yeah. Then after that there's China. I mean, China's producing 60% of the world's primary aluminium today, right? It's very different to 20 or 30 years ago.

Very, very different. I mean in that period, right. And we'll get into the history a bit later, I'm sure. But if you think of the the, the period between about 2006 and 2016, maybe a bit later than 2016, but China basically doubled the world's aluminium smelting capacity. So it would have taken the world sort of 100 years to build. The Chinese doubled it in 10 years. Same with aluminium refiner, because you need the aluminium obviously, to feed into the smelters.

They basically built, you know, the world's aluminium and smelting capacity 10 years. Powered by cheap coal. Powered by mostly by cheap coal. Now there's smelters, hydro smelters and, you know, yeah, or hydropower and, you know, so the smelters have kind of relocated and they're putting in a lot of renewables right now. It's a gigawatts of. It's a industrial strategy that we've seen them roll out kind of subsequently in, in emerging industries too.

Yeah, you know, like lithium, they overbuilt the the, the downstream kind of capacity before there was either demand on or, or, or supply availability. They, they overbuild it and then kind of kind of even in some ways form a, a competitive advantage in that process, which creates a, a, a complete reliance on, on their expertise too. Yeah, it's a it's a very tricky

issue. You know, looking at, you know, China overcapacity, there's been a lot set in the aluminium industry over the years about, you know, China deliberately building more capacity than they need to, you know, to export to the world. I think you've got to also look at it in the context of, of China's industrialisation and

its urbanisation. We were talking about this earlier, you know, these two, these two phenomenon that happened together meant that demand for, you know, for iron ore and demand for aluminium and copper and so forth. I mean, it, it just, it was double digit growth for a decade. And so, you know, how do you kind of regulate how much capacity you build when you're at double digit growth for that long?

And so, you know, in in some ways I kind of see it as them just keeping ahead of the curve, you know, maybe a bit, maybe a bit too far ahead of the curve at times, but maybe not as well just wanting to keep up with their own, you know, their own domestic consumption. There's a sort of analogy to lithium today and you, you fluctuate from surpluses to deficits kind of massively in a, in a growth market, right? Yeah. Well, it's true.

Although I kind of look at the lithium market and think, you know, I get a bit hum about it 'cause we're talking about a market that's 10 million tonnes, right? Yeah. And on smaller scale and when you're talking about 400 million tonnes, yeah, or or, or it's, it's not a lot. Yeah. And we, we see the capacity, the, you know, the conversion capacity being built in China for lithium. I'm talking about yeah, it's a bit ahead of the curve, but it's

low cost as well. You know, it's not the capital cost to build the conversion and the purification capacities. Not that, not that much of A of a constraint. And the the bulk site that China has used in the past 20 years, yeah, a lot of that has come from China, right? But that's sort of changing over time and could look a bit different, you know, looking forward over the next decade or two. Yeah, a lot different. Again, we've got to kind of wind the clock a bit back a bit here.

And you know, kind of look at, you know, when this, you know, when this phenomenal growth period kind of started. I mean, China's got a lot of a lot of bulks on. It's diasporic bulks on right, which is monohydrate and it's like gravel. I mean, the first time I saw it when I went to, I mean, you know, here's me the box I'd export right turn up to China and there's a truck goes past before all this grey rocks on the back.

I said, what's that? Actually, they kind of look at me. That's that's the local box on aluminium. Alum. Yeah, that's right. Well, I. Shot myself there. But I mean, it's very, very different, right? You to look at it's different that doesn't have the same iron content, but it's also up to like 60% alumina yeah so it's high high grade bauxite.

Problem with it is though, that, you know, to dissolve it because one of the things, you know, the Bayer process requires that, you know, you crush it and dissolve it into caustic soda and to get it into solution when it for diasporic bauxite at the temperature's kind of 260 two 180°, Whereas if it's Ipside, it's, I'm 40 or something like that, somebody out there is going to say to me, actually, you've got those numbers wrong. You know what I mean? It's a lot higher, right?

And, and if there's silica associated with it, when you're, you know, when you're dissolving at such a high temperature, the silica dissolves as well. And, and so the silica content of the bauxite is absolutely critical to understand because it can dissolve into the caustic. That just puts the cost up because when you strip it out, you strip the silica out, you strip alumina with it and you're losing caustic. So, you know, I come back to kind of Western Australia versus Queensland, right?

When you think about the, the differences in the bulk sites, the, the, the, the really attractive feature about the WA bulk site is there's virtually no reacting silica in it. Like maybe one 1%, there's quarts in it, but it's gypsydic. So you know, you're dissolving it at a low temperature, which means you don't get much silica, which means your caustic soda consumption is way, way lower than other refineries, which means it's a, they're low cost refineries.

So you might have, you know, the, the, the, the alumina content might be, I don't know, 3233% something like that. But the silica is like 1. So that's why these refineries in WM and they're running well, they're Q1Q1 refineries. Queensland Bauxite is completely different. That stuff there is, it's got, it's got it's, that's what ends up. Yeah, yeah. Yeah, this turns into that. You know, the Queensland bauxite is, has got Bolmite in it and that dissolves at a higher

temperature. So you've got to dissolve it's, it's Gibbsite and Bolmite together, right? Mostly Gibbsite, but if you want to get all of the alumina then you've got to dissolve it at a high temperature and then the silica comes with it because there's much more silica in the Queensland bauxite. So it's, you know, it's a different, that's why I say, you know, diesel versus petrol,

very, very different. Before, before China had this intentional strategy of of, you know, building out their, their in country kind of, you know, capability both on the mining and the refining. Like what did that landscape look like over the the preceding decades? If you go back to the, the, the in the early 2000s, I remember, you know, we, we started, you know, I started our office originally in China just at the end of the 90s, right? So we were there kind of watching this unfold.

And you know, China's aluminium refineries to start with were, were rudimentary because they only had some, you know, they had sort of basic knowledge of the, of the Bayer process and they had all diasporic books on. So they weren't importing any books on in the early days. And so all of these refineries were all high temperature refineries because it's diasporic bauxite. Right when you get to about 2006, 7-8 was when this demand for alumina in China really

started to take off. Then China went to the world to find alumina and they wasn't there, not in the not in the volumes they needed. So what did they do? They built a alumina refund that they knew and then they went out to find the bauxite. The 1st place they landed on was Indonesia. Yeah, right.

So the, the period between about 2008 and 2000 and I think the the first minerals export ban came into Indonesia maybe January 2014, right, the first ban and running up to that period, you know, China was importing books out up to about I think the last year 2013, they maybe took about 40 million tonnes out of out of Indonesia. So it had really started to, to, to, you know, gather some momentum and at the same time, their own diasporic bauxite was starting to deplete, right.

And I mean, like I said before, there's plenty of bauxite in China, but it's, it's this AS ratio, it's the ratio between the alumina and the silica. But once that gets down to about 3 or 3 1/2, I mean, you know, when you've got 15% silica in your bauxite, it's just not economic anymore. Is that? Is that a? Like I say that it's a function of depth. If you go as you go deeper or deplete the resource, it just gets. No. Or is it a function of just? These resources were.

Well known where they are and they're just limited. Yeah, there's some of that for dice bike book sites, there's, there's some of that, but it's really just in the formation. So some of it's got more silica associated with it, and yeah, some of it doesn't. And it's not the sort of commodity where you're going to have exploration success because we're talking about bulk mining operations here. Like, that's right, Whatever's there is known.

And and I would advise you against using the word commodity. OK. What should I use? I would just call it bulk side of diaspora for now. But I mean that's one of the things there people think about bulk. So you do think about it as a. Commodity in the sense of it not being completely fungible. Yeah, fungibility is an important part of it. It's it's like, you know, can I, if I buy a cargo of bauxite in Guinea, then well, can I replace

it? Can I buy a, a cargo books already from Queensland in six months time? And it's yeah, OK, Absolutely no way. So to I'll do it to negate the the challenges when you don't have the direct mind to refinery sort of model. I assume you tie them up on long term contracts. So you know you're getting supply from that mine even though it's in Indonesia and you're in China for a long, long time. Yeah.

Yeah, what? What you want coming through the gate of your refinery every single day is exactly the same Bauxite. Consistent. Right. Just every time. It's like steel mills. It's like. That's right. I think for, for, for refineries, it's, it's accentuated a lot more. I mean, because there's such a huge variation in bauxite, it's much more than there are, let's say on ores, for example. So you absolutely need the same thing.

When when, by the way, when China went through that, that period of, you know, enormous growth, they were out scouring the world for bauxite everywhere. You know we trip over them in also to we wonderful parts of the world looking for bauxite. Where's an example? Oh, Jamaica, Yeah, we talked about earlier, yeah, there's books on Madagascar. Yeah. But now he's getting out. It's very, very difficult to get it out. Obviously here in Australia, Indonesia, Vietnam has got a lot of books on.

Guinea. Well, we kind of gravitate back to Guinea because Guinea has got the biggest, you know, bauxite deposits in the world and they're, you know, reasonably high grade and there's enough there to keep every refinery on earth running for the next 100 years. There's a lot. What's the catch with Guinea? Well, it's Guinea. I mean for China, what's the catch with Guinea, it's the other side of the earth, right. So there's always going to be a huge freight component.

So the books are priced today on our on our index is probably about 77 bucks for a, for a standard use that term advisedly. But for, for our reference rate of Guinea and books that's about 77 bucks and you know probably 30 that's freight. So that's one of the drawbacks. But the other? Drawback, of course, is that you know, it's it's not an easy place to, you know, to operate. But the, the export profile, it's just been dramatic the last

decade coming out, yeah. Well, again, I'll, I'll, I'll bring the clock back to say 2014, right, because you know, the, the Chinese model, right? So they shifted, they couldn't have the, the mind mouth refinery model. It didn't work because you couldn't get the mind mouth. You couldn't, you couldn't put your foot on enough bauxite to make a mind mouth refinery model work. So they went to Indonesia and the model then was Indonesian bauxite into refineries in China.

And that's the way we'll we'll apply it for the next decade or so. But the Indonesians introduced the minerals export ban in 2014 and that was the end of that. So then they had to go looking, right. The next place they landed on was Malaysia. And Malaysia introduced not an export ban. They introduced a bulksite mining moratorium, which is like, you know, get your act together. If you're going to mine bulksite here, then you have to do it in a certain way. And so they banned bulksite

mining temporarily. And then they just moved the ban about six or seven times, which became years, right? And so, you know, the, the, the, the Chinese then thought, well, we're next. This kind of plays back into Alcan, right, which I will come back to because Australia was an A choice back then, right? But where did they go? They went to Guinea because if it's high grade and it you know,

it's and, and the volume. How village operate they built out rail in that time to. You know, they built one rail. Yeah, yeah, they that came online between 23. Yeah, yeah, yeah. There was already an existing railway there because, you know, one of the world's biggest bauxite mine, CBG, which is owned 49% of the Canadian government, a group called the Halco Partners, which is Rio Alcoa and Dadco. And so that's been there for a

long, long time. And there's a railway there and some other companies use that railway as well. So that had been established, right? But it was 2015 when Chinese companies arrived and the exports, you know, from Guinea to China went from like 1,000,000 tonnes per annum probably in 2014, 2015 to 100 million tonnes, you know, in, in about 8 years. It's phenomenal. It was.

That's mind boggling it. Wasn't so it wasn't a resource issue that that, that all, you know, eventuated in there in Malaysia and Indonesia, not quite any expectations. It was just political regimes. Well, yeah, it was there It was. I mean, you know, the Indonesian minerals export ban was bought in specifically to, you know, to, to have companies add value. Indonesia, I mean, we've seen what's happened with nickel, right? I mean, it's, it's gone crazy.

It it worked, it worked. It worked with nickel. It didn't work. Well, it was. With, with, with. I wouldn't say it didn't work. I'd say it was less successful at the time. I mean, what the what the Indonesians did in 2017 was they introduced some amendments to the minerals export ban and the amendments, I'll paraphrase them, right, But basically what

they said was right. We're going to give you a 5 year window to build Illumina refineries and during that that five year period you can export on a pro rata kind of quoted basis. So we're not, we're not going to remove the minerals export ban, but we're going to give you an opportunity for some cash flow so that you can build refineries. And then we're going to audit your your success, you know, for if we're building the refineries. And then in 2022, we're going to

close the window again. And so, you know, books and exports started to flow out of Indonesia again. And some projects were genuine and some weren't. But the bauxite started to flow again into China. Then came then, you know, with COVID delayed it by a year. But in 2023 they said, right, that's it. We're closing the window again. And, and, and what we're seeing now is that there is a proliferation of Illumina refinery projects in Indonesia right now.

Yeah. So you, you can't look and say what was the, you know, has it been effective or was it not as effective as it was for nickel? I mean they're different industries in that there. You know, you just look at the capital intensity for an aluminium refinery, you know, it's a one $1.5 billion to build a refinery. So it's not, it's not cheaper and, and so you have to, you

have to want to commit to that. And I think, you know, over the, the last, I don't know, maybe 5 or 6 years ago that a lot of Chinese companies have been a little reluctant to do that. They were building, still building refineries in China. So it wasn't an easy decision to say we, we go to Indonesia. But now I think things are starting to change and we are seeing more, more interest. So you know, I'd argue that the minerals export bans actually been pretty successful for

aluminium as well. Yeah, it's just taking longer. Just takes longer, yeah. Well, it doesn't take longer to get ground support if Sandvik and your ground support supplier. That's one thing that does not take longer. The quickest way to get ground support on site to keep your underground mine humming is having Sandvik is the vendor for it. That's bloody Jada. If you were an underground mine manager, who would you pick as your ground support? Support Sandvik, Mate Sandvik. Trav yourself.

Sandvik JJ So do I need to ask who you would think if you were running an underground mine? Sandvik That is the consensus we want anyway. Let's get back to it. That's that's kind of yeah, fascinating. So that's, that's like the Chinese part of the market over time, which of course you can't have a commodity story without what China's been doing. But the but simultaneously, what have the Western companies been doing? What's the what have the Russians been doing?

What's? Well, very little to nothing. I think the honest answer, when you look at how much capacity has been built in China, yeah, you know, I'm talking about aluminium refining capacity and smelter capacity. I mean, there's been some has been built over the period, but you know, China has just eclipsed a lot. There's been some, some, you know, a few refineries built, but there's been, I'd argue, I think there's actually been more Catalan than there has been built.

So the refineries that are that are owned by like the South 80 twos, the Alcoas of the world, the Rio Tintos of the world, they're basically all the same refineries that were around 30 years ago. Correct. Yeah. You've seen not a lot of pro. There's been, there's been a few, there's been a few built in Vietnam, but they were built by the Chinese.

You know, one of the biggest refineries in the US, Port Comfort, which was owned by Point Comfort, owned by alcohol, was shut down and the bauxite sent to China. Gove, if you remember, you probably don't remember, there used to be an Illumina refiner at Gove in NT. Yeah, shut that down. 2015, I think shut it down, sent the bauxite to China. So capacity has sort of come out more than it's been or it's been built. Aluminium refining. I'm talking not, not smelting.

But the the what what that like, what is the story with Alcan right? Like, I mean, it's just like everyone knows. You can wait too long, no? But so if if like I don't know if like if if if if the story is that I have to. Change my beer to answer this question. So thanks for the Coopers by the way. That makes me feel like I'm at home. We've got to look after the SA. Thanks to whoever I can't remember who bought Coopers for us. But anyway, thank you for.

That, yeah, the Alcan story, it's, it's, it's, it's intriguing, but it takes you back to, you know, the heady days of sort of 2000 and six, 2007, right? We were talking about this, you know, this this period in time where I think the rest of the world realised that what was happening in China was real. And that was, you know, reports coming out of China that iron ore was going from sort of 15 bucks a tonne to 70, which, you know, that was that's a hell of

a, an increase back then. And is it real? Is it not real? Is this whole idea of urbanisation real or not? But I think it was about that time that it was, you know, people could see that this was actually happening and demand was just, you know, it was, it had skyrocketed, particularly for iron ore. But now there was a, there was a, a thought that aluminium would go with it at A at a similar kind of pace. Where did that come from, that perception?

I think the, the general idea of industrialization, I mean we were talking before about the different market sectors, right, for aluminium. So it's construction is a big one for aluminium as well. So you know, construction starts to pick up, then aluminium demand starts to pick up and you know, infrastructure and you know transport and so forth.

So there was some, there were signs of demand, you know, increasing quite significantly in China at the same time the Chinese were out looking for alumina. So these kind of things were all coming together at a time when, you know, markets became very frothy and bubbly and, you know, people got a bit sort of over rejuberant. Yeah, just to some degree. And, and, and when you think about Alcan, come back to Alcan, right?

So at the time, so in 2007, there were a number of companies that were running the ruler over Alcan. It wasn't just real. Yeah, yeah, BHP was too, right? Well, BHP had a look, but they'd never come out and said anything. They hadn't come out and made a bid. And Alcoa bid. Alcoa did first, yeah. And that and that turned hostile, right? Yeah. And that was that was rejected. And Rio came way over the town well. No, there was one in between which was valet. Valet as well.

Formerly known CBRD, Yeah, yeah. So CBRD made a bid, right? And and so the, and so Rio trumped it. But, you know, I remember the time because we were doing some work for VHP and some other companies. We were kind of looking at the, the valuations that would go with these, these crazy prices that were being offered. And you kind of think, you know, you look at, you think, how the hell did they get to that valuation? What are they assuming? Yeah, yeah.

I mean, there's only so many numbers you can change in a financial model to get it moving up. It's got to be aluminium price, right? Or it's got volumes or you know, whatever it is, so. Many parallels to lithium. Yeah. I mean, but the prices were, I mean they in the end they paid 36 billion for it, right US, which in today's money is probably about, I don't know, 55 to 60 billion, but it's a lot of

money. And it was higher than significantly higher than Varlow, which was significantly higher than any of the other valuations that we kind of saw at the time that, you know, people look and go how did they get to that number. They debt funded it and like. Well, they debt funded it and remember though that it was also the time at which BHP had made a bid for Rio. Yeah, yeah. So there's a lot happening, and

this is all coming. You know, you come back to, well, this is China, this is this incredible growth rates, these companies trying to position themselves to take advantage best they could. And so Alcan was kind of the obvious target. What's the ultimate? Was it a bit of a poison pill for Rio to to, you know, pay too much for Alcan so that they had defensibility from actually being acquired by BHP? Yeah, well, like, you know, plenty of sorry, there's plenty of speculation, right?

Oh, now I got my own view. Do. You reckon the the government would ever have let that happen? What? They asked me to take Rio. No, it's not just the government here. I think there would have been foreign investment review boards all over the world who would have looked at and said we're not going to. I think it was always, yeah, it was always kind of kind of struggle just on that alone. Yeah. Yeah. But I mean, you come back to the poison pill.

The idea of the poison pill, right, is that, you know, you, you swallow it for a large sum of money and, and therefore you're less attractive, you know, as a, as a takeover target. And, you know, my view at the time was that there was, there was plenty of that in it. My personal view, there's plenty of that. It wasn't just, yeah, it was, it was a factor for sure. There was, like I said, there's all this froth and bubble about the aluminium industry and, and aluminium demand growth sort of

going crazy. But by the way, we're, you know, we've got, we've got a suit all. And this is a, dare I say, a convenient way of making it more difficult. It's kind of amazing. They're like the, the, the, the, the wonderful cash printed that is sort of Pilgrim iron ore can kind of, you know, paint over those pretty horrendous blemishes in, in kind of, you know, corporate history. Like a well, like a 35. Today's all is $50 billion plus

acquisition. Well, I come back to the, you know, the, the, the, the comment that I made about, about Guinea and about bulk sign, right? Because when, you know, after that acquisition, you know, taking place, then you wind the clock forward by maybe four or five years. And Rio had written off most of it, right? So I think everybody looked and said it was a bad deal. It was, it was a bad deal. It was about 5. They wrote off most of it. Yeah. But I think they did another they wrote off.

I think they wrote it all off. Did they? Yeah, I I made the impression it was actually. At least, yeah, at least 2/3. Yeah, yeah, it was a big, it was a big write off, right. But you can imagine what that did inside Rio. I mean, you've got iron ore prices going crazy. You've got a company that just, you know, one of the better term wasted a lot of money, you know, share a lot of money on, on this, this acquisition that had

gone terribly. And so, and then I remember at the time because I was, you know, I was advising them that, you know, we would put forward a forecast for bauxite imports into China, which was double digit growth. And they'd kind of look at it and say, yeah, that's really interesting. Thanks very much.

And that's what you'd and they'd kind of leave it at that because it was very, very difficult for the aluminium, you know, business unit to to attract the attract funds away from iron ore from anything else, especially after the disaster that was alcant. My, my view is that had that not happened that, you know, Rio is incredibly well positioned to, to, to build out WEIPA so that a lot more bauxite from Australia right now would be going into China than that's coming from

Guinea, right? That made it more difficult. Plus the, all of the difficulties that go with just approvals processes in Australia make it incredibly difficult as well. But it could have just, you know, the industry could have just turned left instead of right then. So as a result, the Western producers stand still, China brings on its own internal capacity that depletes like like, you know, Malaysia, Indonesia fizzle. Guinea is the new source.

What's the status of of Guinea supply into China today? Between Guinea this year will do about 100 million tonnes. I'll do, I think it might do 115,000,000 tonnes of bauxite into China this year. Total imports this year will be about 150 and between Guinea and Australia you're probably about 95% of the total. So all the rest of the kind of rats and mice? Where Where does the bauxite come from in Australia? That oh from wiper, from from Rio and from Metro Metro. Yeah.

WA here. Alcoa did explore a little bit here a few years back, but it's hard, right? Because it's, I mean, it's 30 three, 3233% alumina. So there's a lot of stuff in there that's not alumina that you know, you're importing choice. It's good. It's a blending kind of books because it's got very low silica. But you really need to have, you know, a refinery like Worsley or wager up built in China to, you know, to to to make the most of it. And that's not going to happen.

Are there any constraints on the supply out of out of Guinea for any, any reason or like you said, there's there's hundreds of years, but are there like are there reasons to be trepidatious about what can actually come out of Guinea? Yeah, I think they're starting to emerge now. I mean, now that we're up at sort of 100 million tonnes plus, written into most of the concessions for bauxite exporters from Guinea is the requirement to build an aluminium refinery. Gotcha.

So the Ghanaian government, right, it's a military government at the moment, right? But they're very, they're becoming more and more, I guess I want to say aggressive, but you know, they're the pressure is is mounting on bauxite exporters in Guinea to build aluminium refineries. They want to do the Indo playbook. Well, you kind of you kind of both is my view. Why is that? I mean, well, because then you've got too much aluminium refining capacity.

See what's happening in India in in Indonesia right now is my view. We're going to see another 3 or 4 refineries built in Indonesia between now and the in the end of 2030. So, you know, although it kind of makes sense to build a, a refinery close to the bulk site. So it kind of makes sense in Guinea, although they've got a, they've got an energy problem to solve. You've got to do it when the time's right.

And it seems to me now that the time is right in Indonesia and then at some point after that because there's only so many alumina refineries that Indonesian bauxite will support and then I think it's kind of Guineas turn after that. Yeah. So that's a constraint you. Don't want too much, too much refining capacity at the same time because. Well, it'll just kill the price. Yeah, refining margins. And it's got to be in the right part of the world, right? There's kind of two mark the

Pacific and the Atlantic market. So, you know, you build your aluminium refineries in Guinea, you're kind of feeding into the Atlantic market that doesn't might need them in the future, not necessarily now. What? What's the state of the Russians then, Russell? What sort of scale do they operate at? In Guinea or in, well, I mean, they're quite the biggest producers of primary aluminium, the biggest primary alum producers. And there was recently the ban, I'm not sure how effective it is.

Maybe you can expand on it was an LMA ban that they couldn't trade in in Russian. Yeah. Effective at all? It's not, well, no, I think there's there's there's some sanctions, but there's also a lot of a lot of companies are self sanctioned when it comes to dealing with the result. So a lot of companies said, well, we just won't take their medal. It's not illegal, but we just, we just won't do it. So. Just go fire middle men then like. Well, it can, it can, it can it

can go fire middle men. The thing about? It's fungible. Yeah, that's right. It's difficult to, you know, to, to, to keep it out. If you, if you, if you want it, you can, you'll get it right. But the thing about Russian aluminium is that it's, you know, it's green credentials very, very good because it's all hydropower. So you've got this conundrum, right. You've got, you know, people

want, well, I want green metal. Well, there's plenty of it for Russell, but well, can you, can you take it? Can you not take it? It's almost down to like a company by or or consumer by consumer decision of whether you want to use that that meddler or it's not. The E but not the not the S. That's right, That's right. So, you know, it's yeah, they're in a, they're in a tricky spot.

And of course, they lost the, the, the big refinery in Ukraine and they, and they lost, you know, 700,000 odd tonnes of QIL alumina. So they've been out in the world trying to source, you know, 3,000,000 tonnes of alumina to make up for what they've lost, you know, since the, since the Ukraine conflict. And most of that's come from China. So to round out on sort of supply and demand, recycling is a pretty real thing. You know, it goes well beyond a lot of the other metals that we

that we talk about. Can you sort of expand upon kind of percentage and size that recycling plays in the aluminium market? I'll do my best. I'm not a huge recycling expert, but what I can tell you is that, you know, post consumer scrap. So I mean, most of the aluminium that's been produced in the world is still used in its first

application, right? So, you know, scrap the attractiveness of scrap now, of course, because it's carbon footprint is so small, like the number is, you know that you'll hear from most people is 5% takes 5% of the energy to recycle aluminium relative to to primary production, right.

I don't quite buy that, but it's not a bad, you know, it's close enough because the problem with recycling, I mean, you take these cans, right, you recycle them with a whole bunch of other aluminium, all sorts of stuff gets in there as well, usually iron, which means you've got to break it back with you've got to alloy it with some pure metal as well. So it's not quite 5%, but it's it's not a bad, it's not a bad

number. So it's very attractive from that perspective, given its carbon footprint. So you see a lot of companies that are, you know, who are prepared to pay more for scrap because it can get down, get their carbon footprint down. If you look at scrap rates, recycle rates around the world, they're all, you know, they're all fairly high. Well, I mean, it varies country to country, obviously, but the one that's the laggard is China.

China's recycling rates for aluminium significantly lower than the rest of the world for what they consume, and they're trying to change that. Now you might have heard that you know China's got a a cap on its primary aluminium smelting capacity, 45,000,000 tonnes, right? Yeah, I'm keen to go deeper on that as well. Yeah, well, it's really interesting because, you know, in our view, you know, aluminium demand just continues to, you know, on its slow burn. So where does the aluminium come

from? It comes from recycle. I mean, that's the China plan, right, Is they actually increase their their recycle rights so they can feed into the into the increasing demand rather than building more smelters. So yeah, recycle is the future for aluminium for sure, especially given the, you know, the, the, the carbon footprint. Well, if recycling's the future for aluminium boys, I'd say this fella here, Reece Patoni, He is the future for earthworks and knowledge. Just look at him.

Across Australia. Look at his face. Does he look like he wants to move dirt? Dashing. Oh Jesus Christ mate, I've got something for you with races an AEH as partnership with the great Seamus Murphy for many time exploration. Like it's not just clearing and for bloody mining exploration, dams or anything mate they could get Seamus could get the fieldies and the geos out there to supervise the whole project as a turn key earthworks and haulage solution. Is that? Have you ever heard of that

before? Never. Normally you pitch ludicrous propositions as 10K, but this is a, This is actual. And this is a true one. I cannot believe it mate. As I said site clear and dam building post mining rehab, rain, hail or cyclone. He works through the whole thing mate. He even uses the cyclone's energy to move to the freaking dirt quicker. But that is how good this guy is. Everyone else would be parked up on the piss at the pub. Not race. Not Australian earthworks and haulage.

Maddie, you had me at 10 K Oh. Jesus Christ, give him a bloody bell for Christ's sake. So why did China self impose these alumina and aluminium restrictions? Yeah, that's a, that's a very good question. There isn't why in there actually isn't a cap on refining. It's kind of like a proxy cap. If there's a, if there's a cap on primary aluminium, there's kind of a cap on alum because there's nothing else you can do

with it, right. So the 45,000,000 tonne cap was bought in to stop alumina, to stop primary aluminium smelters being built because you know, there was if you know that period that that huge growth period that I spoke about before and the overcapacity that came with it was becoming a problem. And so the 45,000,000 tonne cap was introduced to stop refineries from being built to, you know, to increase net

capacity. What I mean by that is that if a smelter closed somewhere, let's say a smelter 200,000 tonnes shut down, then that 200,000 tonnes of smelter capacity could be like horse traded to another, another province somewhere, right? So you could still build new smelters, but you couldn't there couldn't be a net increase. And so you know the, the, the purpose of that of the the cap was to stop new smelting capacity which. You dampen the profitability of of existing.

Yeah. And I, I was getting out of hand, right. Smelting capacity was growing faster than than demand. So that that cap of 45,000,000 tonnes by the way, is going to be hit any day. I think we're, I think it's about like 122,000 tonnes a day and I think we're in like 120 or something like that. So we're not far away from it, yeah. We're at, because my understanding is, you know, Australia, for example, we mined the bauxite and we have refineries that turn that bauxite into alumina, but we

don't do any smelting. We do. Yeah, we do. Yeah. Yeah, we've got some. Where's the smelter? Well, it's Born Island Smelter and time ago. OK. And Portland in in Vic. Become a dickhead. And, and also but, but place to your first point though, right? Yeah. We just don't know much about the industry. You it's hard to get, you know, to how do you invent? How do you play it? Yeah, all those things you we've had, you know, we've had we, we closed the smelter in in

Victoria many, many years ago. Point Henry in Geelong, yeah. It's also a big smelter in New Zealand, that's how many smelter so. But you dominate the smelting. Oh, for sure. Yeah. Yeah. What? What percentage are they? They're about 6060% of the world, roughly OK and Illuminas not far behind. The one in Rio made headlines earlier this year, just signing a new power deal, is that right? So they could. Get that? I think. Get that? Locked in and then they could

stay open get. Security, yeah. Well, I mean, more recently, Portland just did the same thing. Yeah, another, I think it was 450 megawatts or so, I think to 2034, something like that. So I mean, smelting is about electricity, right? Yeah, one of the ways somebody said to me very early in my career, when you look at aluminium, you look at an ingot of aluminium, think of it as coagulated electricity. Explain. That's what it is.

I mean, you're pumping the, the electrolysis process, you know, is about, you know, breaking the, the, the bonds open with electricity. So you know, it's, it's, that's what it is, right. So, you know, it kind of changes the way you you think about aluminium, right, that that's it's energy. It's a representation of expended energy. That's right. And there's an awful lot of energy in it.

You know, aluminium is used like powdered aluminium is used as a fuel as well because it has so much energy in it. I used to work at like smelters in days gone. But you can cut this bit out in smelters, right in days gone by, right where you worked in a smelter and there'd be, there'd be a powder plant next to it, right? Aluminium powder plant. So there was one in Belle Bay and there was one I worked in Anglesey in North Wales all the time. This little powder plant next.

So they would take molten metal and then I would solidify it in a way, you know, through like a nozzle that would make it into a powder as it, as it solidifier. So you walk into the, you walk into these buildings like they're all the same around the world. You walk into the, the front office of a, of a, you know, of a aluminium powder plant. And then you walk through the front door and then you turn right, then you turn left and then left and then right and

then right. And it's like a maze, right? And you finally make it to a lab and then you go left. It's a labyrinth. And then you end up in the, you know, in some, some person's office. And then he's talking about this power. I, you know, I pucked up the courage instead of them. Sorry, why did I have to walk through a maze to get to your

office? And they said, this guy said to me, seriously, when there's an explosion, then the energy is dissipated, you know, through the corridors rather than just blowing the officer like he didn't say if he said when, when no explosion. Sorry, what am I doing here? But that's energy. It's the energy. Now let me That's what it's used for as a powder, as a, as a, as an explosive, as a fuel. I'd love to hear about energy.

Some of the other operations you mentioned before we started recording in in Argentina. You've had a spell in in Northern Wales. Yeah. Oh, straight. Yeah. Well, I mean, I, I worked in, at the smelter in, in North Wales and, you know, I left that smelter with a lot more than I bargained for IEA wife. And, and so and she's a Welsh speaker, a Welsh speaking wife. So I had to, so I had to learn how to speak Welsh. But then I, which I do badly by

the way. But then I, I ended up, you know, I was invited to do some work down at the Agua smelter in, in Argentina. And yeah, they speak Spanish and you know, the place called Plato Madrin, which is Welsh, Welsh name. And so they spoke Spanish and Welsh. Never thought my Welsh would come in handy anywhere, but it did. So in Argentina 4. Places, of all places, Argentina. That's right, yeah. Yeah, and the bauxite there is sourced.

Like, well, it's a smelter, so it's so the alumni it's bringing in alumina from, you know, from wherever it can. But yeah, the bauxite, the bauxite it probably, you know, the alumina could come from one of probably Jamaica because there are, you know, quite a few refineries. And it's hydropowered. For I'm not sure about how you are probably. Yeah, it was. I was in prayer. It's a really well run smell.

What what with all of that, I guess like historical context on the the alumina aluminium box like complex like where are we today? Well, that's a yeah, that's a very good question. I kind of come back to the to the markets, right and then kind of project that forward aluminium for me, it's just still on slow burn. All of these different markets that aluminium feeds into are

all growing around the world. And so aluminium, you know, the demand for aluminium is just like they just keep tracking higher and higher and higher, which means that we will need to recycle a lot more, but it will mean that we need to produce more primary aluminium as well. And, you know, we're kind of looking out over the next sort of five or ten years, you think, well, where's that? Where's the growth? Where's the smelting growth going to come from?

Because China's now got its cap, right? So they're done. I don't think they'll change it. I think what they might change is the thing about aluminium smelters is that they have a history of capacity creep, right? Because you can, you know, over time, you know, if you look at the, the, the, you know, the current that's used in these, it smells 200 KA, 300 KA 400K, but they always manage to get go a bit higher.

And so, you know, for the same footprint, for the same smelter, you can actually produce a bit more primary. I kind of look at the, you know, the, the, the cap in China and think, well, I don't really think it kind of fits the, the purpose of not building any smelters, right? To to, to be, to not improve efficiency as well. Do you know what I mean? I find it hard to believe that they would say, well, OK, you can't improve your efficiency because we're going to cap you at 45,000,000.

So I think maybe you see some creep. Existing ones to be to. Be. Profitable, especially when. They're worried about as efficient as efficient as possible. Reminds me, by the way, just coming back to Alcan, just for a moment. Yeah, it stuck in my head. I don't know who it was. Somebody from Rio who said that within 18 months of the Alcan transaction, China will be a net importer of primary aluminium. Fuck. Never happened? Yeah, never happened.

They they drank the blade. They, that's right. They, I mean they built, you know, 20-30 million tonnes of smelting capacity themselves. So it was great. Sorry I'm off on a tangent, David. That's amazing. It is. So where we are today, China. China will never, that will never change their I mean, but it was a policy set yonks ago. Well, the 45 cap, yeah, not that far. A few years back. A few years back, yeah. Yeah, right. But you're you're.

I, I think what you, you know, what we're seeing in China now in terms of investment into the sector, it's all recycled. OK. And it's the systems that they need to put in place to collect the recycle and get it back into the system. So it's a very, very strong emphasis on getting that up to the rates of other countries. So, so China's smelting capacity, let's let's assume you know, won't change for a while, but demand is growing. So you kind of have to look rest of the world, Guinea.

Want. It they want it. For a Lumina, they don't even you know, it's always back to smelting, right? I mean where the smelting, the smelting capacity goes, where you've got low cost electricity. So you know, one of the hot spots in the world is obviously the Middle East big produces a primary aluminium, not alumina primary aluminium. And I think we'll see more capacity going to the Middle East based on gas, right, because it's got a a lower carbon footprint than coal.

It's still not net 0, but it's. Lower and they're importing alumina from wherever. All over the place. Australia, yeah, a lot of the WA, a lot of the, the, the alumina from here goes to the Middle East. That's interesting. Africa and to the Middle East, yeah, yeah. So I think you see more smelting capacity in the Middle East. You might see more smelting capacity in Southeast Asia. As well they, they do have an aggressive policy to build out, you know, a big industrial

sector there right. Like, I mean we've. In the Middle East, Yeah, Well, especially where it's, I mean, you know, they, they've been looking to to, you know, change the, you know, the means by which they generate wealth for for quite a while. But they've been active in the aluminium ministry for a long, long time. Their first smelters went into the into the Middle East, went down. When I started in the industries, that was decades ago. Where are the marginal bauxite tonnes coming from?

Well into China, so it's a China market, remember so and remember also because now you guys know a lot about books, I right. So know that the whole idea of value and use, when you look at these samples, see the whole idea of value and use is absolutely critical. Whether it's 33% alumina from WA or 45 from from Guinea or 55 from within China, you've got to do that value and use calculation, right to see who's sitting at the margin on a value and use adjusted basis and on

our analysis, right. Now on that value and use adjusted basis, so it's basically like, yeah, how how many units of aluminium can you actually or alumina or alumina can you actually? Think of it this way, right? If I've got a, if I've got a refinery sitting in China, right, and I've got some choice, not a lot of choice because now you know how a refinery works, right? So you want to keep the, the variation down.

But if I've got the choice of, of, of processing a book site that comes from Guinea or from say Brazil or from just say Malaysia, for example, right now, am I better off paying 75 bucks for the book site from Guinea or am I better off paying 50 for the Malaysian book site Now the answer is probably 70 from Guinea because it's that value and use adjustment. It's the fact that you've got the high available alumina, you've got low reacting silica in the in the Ghanaian bauxite.

So you're consuming less caustic soda. You're you know, you're dissolving, you know at a lower temperature. So your energy costs are lower. And so you've got to take all of these things into consideration and then bring it back to the cost curve right then go well, OK, on a value when you suggested basis who is sitting in the margin and on our analysis right now, it's actually some of the Ghanaian the low lower grade Ghanaian

producers. So. Every every refiner has a different cost curve if they're if they're looking to source seaborne. Every refiner has a different cost to produce alumina. Yeah, absolutely. Yeah, Hugely different based on the bauxite that they're processing and the amount of cost that they're consuming and the amount of energy.

Because remember, if you're, you know, if you're dissolving at 120 or 130° versus dissolving it to 80, then your energy loads are very different, but you're getting more alumina, right? Because typically if you are, you know, if you're, you know, if you've got like a high temperature type of books, I think it's got more alumina in it. Otherwise you wouldn't bother chasing it.

So, you know, there's a lot of, there's a, there's a lot of moving parts to a, you know, to understanding how that that cost curve kind of fits together. And to just to touch on the, the contracts, so how the dealers are negotiated between the, the books that producers and the refiners, are we talking contracts that'll be signed for a few years at a time and the, and the pricing dynamics it will sort of be measured against spot. It takes a while to react.

What are the sort of characteristics of a contract? It's well, first of all, you have to slice out of that the all of the vertically integrated production because it's just coming across, you know, here's my books like my mind mouth, the refinery model. So we'll slice all that out of the way, right, because that that happens. Then the next layer is long term contracts. So you might see, you know, books on this going from from Queensland into China. Some of it can be like on a 10

year contract. Some of the stuff that can come from Guinea can be on multiple year contracts as well. And those prices will be bilaterally negotiated pretty much. With like floors and ceilings or is there a? Yeah, there's, but there's also there's bonuses and penalties around grade, all the sort of stuff that you expect, right? I see. Yeah. But about, I don't know, about 10 years ago we kind of looked at it and said we can see it moving to an index at some point.

It will move to index pricing. But the barrier has always been the whole idea of value on uses because they, you know, these books sites that vary so much in grades. But now we're starting to see that happen. You know, Rio's been out to tender for bauxite in the past year or so. They've, I think they've put out two or three tenders for bauxite from you know, from Govan, from Queensland, from from Guinea as well.

So I think we're now at the point where indexes will start to play a role in setting the price some, some spot deals, I mean and then that will flow through to the longer term contracts. And and that that's an index that's adjusted based on the value and use of. Well, we do we. So we publish 2 indexes at the moment. We publish a Guinea, what we call the G Bix index, which is a standard grade of Guinea and bauxite. So 45% total alumina and 3% I

think total silica. And so you know, you can take that as your reference point sort of like 60 to 65, yeah, same sort of thing. And then you would just sort of bonuses, penalties, you know, up and down from that. And we do the same for an Australian book site as well. So yeah, I think with time now we'll we'll start to get some traction on it. It'll find its way in the contracts. Very interesting. Will the will the the like? There's not many.

Producers of sort of seaborne oxalate, for all intents and purposes, will that change? Do you think it becomes more fragmented or do you think there are just like constraints why that's a challenge proposition in the first place? Look, you know it, I think it depends on what happens in Guinea to a, to a large extent. I mean, Guinea now you know,

115,000,000 tonnes worth. The number is, it's, it's almost as if that's, I mean, you know, Chinese, China's aluminium industry is addicted to getting in bauxite, right? And where else can you get it from? Because you know, it's, if it's an addiction, I mean, I mean, I think you know, the Chinese have come out themselves. Some refiners have come out in the past, I don't know, six months or so and said we need to diversify.

But where can you get it from? You can get some from Australia, but getting new mines started in Australia is just takes such a long time. So it's hard. And you know, does Australia want to be in bauxite mining? I mean, I think that's an open question at the moment. I can't understand why it's an open question, but it is. Where else in the world can you go? It's there's just not a lot of options out there.

Vietnam is has got really great bauxite, but they have a minerals export ban, effectively a minerals export ban as well. They can't get it from there. But China has been out like all these crazy countries that they've been out trying to find and source large volumes of bauxite from now I mentioned Jamaica earlier. I mean Jamaican, Jamaican bauxite. If I had a, if I had a like a jar of Jamaican bauxite, it would be dust, right? And it would be 17% moisture. And then and if you dropped it

below 17% moisture, it'll dust. And so when you load a vessel which it comes out of the ground 25% right moisture, then it's it's tried. And so and if you try to load it onto a vessel less than about 7 and it just I mean massive plumes of of bulk sites. Actually problematic. Yeah, the first time a bulk side vessel went to China with

Jamaican bulk site, right? Yeah. When they had started unloading it at Qingdao Port, they basically shut the port down because everybody in the neighbourhood complained that all their body washing was turning orange because there were just these massive plumes of, you know, of books like dust is they, they picked up, you know, they're picking it up with grabs and just dropping it on the on the port, right. It's just all these poems.

This guy, I remember this guy rang me and said, this is crazy. They've had to shut down the whole of Qingdao port because this, you know, this box I'm unloading is terrible. And then, you know, two or three days later, the same guy called me and then he started talking about something completely different. I can't remember what he said. And I said to him, sorry, just go back to the what what happened at Qingdao? He said, oh, no, no, they solved that problem. What they do.

He said, oh, they did it at night. Yeah, he says, but when I mean, when that stuff made it to the refinery, right? The, the, and, you know, you can imagine how much got lost in the waggons because it went inland, right? So when it finally got there, I mean, I'm, I'm, I'm going to paraphrase the refinery manager here. He basically said, how many of these, how many boatloads of this stuff did you buy?

They said, I don't know, 3 or 4. And he said, well, I don't care what you do with the other two or three, but don't bring them to my refinery because it's just so difficult to handle. You don't have the handling system set up for dust, you know, because that fine, right? I mean, the, the the refineries that traded Jamaican bauxite have got no grinding circuit. You don't need it. All right.

So you can imagine that if they want to try and take bauxite from somewhere else, they're going to install the grinding circuit. That's. Crazy. It's a great story. I think it's in the world for sale. And I think Long story short, Mark Rich, Mark Rich and Co, Glencore negotiate a deal to have the off take to all of Jamaica's bauxite because the government has run out of money,

if I remember it right. And they call Mark Rich at two or three in the morning and he transfers the money that the government needs by the next day or whatever, he signs a 10 or 20 or 30 year deal. Yeah, amazing. That's the good old days, Yeah, You need to talk. If nobody's told you before, you need to. Have you heard of a guy called Jim Lennon? Yes. Macquarie, Macquarie. Macquarie Yeah, yeah. I mean, Jim is one of the

legends of, of, of our industry. Yeah, but but he he knows Dick, but he was a mate of Mark Richards. Yeah, right. Jim. So yes. Jim, that'd be a fascinating. Conversation. Yeah. Hell of a gentleman, Jim. Yeah. I think we should talk a bit about WA specifically in the, the challenges that the industry has kind of faced in in recent times like you, like you outlined, we've got a long history with oxide and alumina refineries.

So, but the the challenges have sort of really come to the fore in the in the recent months years so, so. Yeah. I mean, I remember it's the start of this year. It was like really early January where Alcoa announced our kitailing Kwinana. Yes. January I think. And then I mean that then the a whack deal kind of ended up going through and all of a sudden. See. Alcohol is this even more kind of you know distant company in some ways and then and then S 32 faced their. Right.

It's right down at Worsley in June, July. So how have you sort of seen that the challenges, you know, positioned from outside the state, but we've sort of deep into 3 expertise? Concerning I think would be the word ideas. I mean you, you know these, these refineries with the exception of Quinana, I mean Quinana's closed and and it was a high cost refinery.

So you'd expect it for the for for Alco to take that decision at some point my rational economic decision in my view, the other three refineries here are all on our assessment Q1 right, alumina producing. The other three Worsley. Wager up, Pinjara. And the latter 2 are both Alcoa. Yeah. And Worsley S 32.

Gotcha. Yeah. So they're all low cost, you know, Q1 refineries, but they find themselves in this, you know, this odd position where they're accessing the bulk site that they need to remain Q1 producers is becoming more and more difficult for them. And as they do, then you know, what do they do?

Well, you know, as you're going through the process of, you know, of, you know, compliance and, and licencing and so forth to, to shift your mind to different places, which they've known they've needed to do for a long time. All right, that as that time gets extended, then you've got to do something. You can't just shut the refineries. Refineries don't work that you shut the refinery. That costs you a lot of a lot of money you don't want to shut. So what do you do?

Well, you have to go back to where you mined it before and where you've where you've spent a lot of money to kind of rejuvenate and. Rehab and everything. And rehab. Dig it up. So, so all right to spell that out the, the, the the political situation is 1 where the the environmental permitting has been so restrictive or or. Well, tedious.

Tedious and and and unclear. That they don't have approval to necessarily mine where they where it makes sense to mine or yeah, because there's maybe unnecessary delays. Yeah. Well, I mean, I, I would call them unnecessary delays in that if the, you know, if the, if the, if the process was well documented and the process was followed, then it would be clear and you would know, you know how long it's going to take and you can plan accordingly.

Remember, these are assets that you know, that, that they need to run for, for decades, not the next, you know, five years or so. They've got a plan for decades, especially if they're going to, you know, transition to sort of net 0 by 2050, right? They, they require massive investment. So you need clarity. You need clarity about, you know, oxide supply and what that's going to be and, and, and what impact that's going to have

on the, on the refinery. And so, you know, they find themselves in a situation where with that, that that process is not clear, what they have to do to satisfy the requirements is changing sort of on the fly. So you still have to keep the refinery running. So, you know, what do you do?

You have to feed in bauxite that's of lower grade and just, you know, you just kind of March up the cost curve as a result because now you're treating, you know, bauxite that's probably got a grade that starts with A2 and not a three. And that just has an immediate impact on on costs. And that, you know, that brings into question the yeah, you know, the the industry. And all like you know both of W as miners are in a a similar predicament.

In Yeah, yeah, I think so. I mean, for different reasons. They're not, you know, they've. I I think when you look at what's actually happened, nobody comes out of it sort of smelling of roses. Yeah, but they're in a tough spot. I mean, the Q1, the Q1, for what reasons is it? Is it the quality of the box that they might have, but also that the energy cost is quite low here because of our domestic gas reservation? Well, it's all of those things. Yeah.

I mean, remember, that's that, you know, the bauxite grade is low. Yeah. It's only sort of meant to be sort of 3233% available alumina. So excuse me on a world stand. That's pretty low. Yeah. There's no silica. Yeah, I mean, there's sand, but you can take that out. But there's no reacting silica. It's not much clay. So you're not you're not consuming much caustic soda and because Gibbs are it's low energy. So it's a low it's a low temperature refinery.

So you tick a lot of boxes there and then they will managed refineries as well. So you know, that's why they that's why they're sitting in Q1. There's there's also the challenge that that energy component, albeit maybe lower than some other refineries will tick up in time given the domestic gas policy and other sort of challenges we've faced as well.

Yeah, it's true. And I mean they've got to, they've got to face that, got to face, you know, converting their boilers to to, you know, renewables as well. I mean, it's cost and it pushes the, you know, pushes the the cash cost up, but you need line of sight on your future to be able to make those sorts of investments. You need to know that you're going to be doing this for the next 20 or 30 years, not the next 5. As Maddie would say, just Chuck an SMR in it collie mate.

Get a reactor going. So, so the the key aspect of this then is does our government here, WA and and Australia understand that? Are they, you know, do they understand that the challenges that the industry is kind of facing? Do you have any insight on that? Do you? Have a on that. I mean from our experience and you know, some of the work that we've done for the, you know, for the Australian Aluminium Council would suggest to me that they don't.

You do get the feeling as sort of policy on the run here, especially when you look at it through the the lens of critical minerals because you know in in Australia, we don't consider bauxite, aluminium, prime aluminium as critical minerals, but US does and the the EU does, but we don't it is it's odd because. But the reason I think they give is because of the scale of the operation here. Yeah, and and because. Our own, yeah, our own supply means that when we don't, that's.

And our supply chain? I mean, it's fucking critical anyway. Met call is fucking critical anyway. Easy, easy. But I mean, I, I agree. I mean, I think it it should be, it should be a critical and that kind of changes the approach, changes the rules a little bit for for you know, the aluminium upstream aluminium place. And I think that it should be. I think we should be taking the same approach as other similar sort of countries. How about in in Queensland?

What's the we hear much more of the WA situation? What's the picture like there? I mean, it's a little, I mean the refineries in, in Queensland, I mean they're processing a different bulk side. It's a high temperature. So their costs you would expect to be a little bit higher, the bulk side's high grade. But you know, if you take UAL as an example, it's a reasonably old refinery relative to other refineries around the place, so that you'd expect the costs to be a bit higher.

But they still come across the same, you know, issues in terms of, you know, government understanding or, you know, government support of the industry. It's, it lacks just as much in Queensland as it does in W. I. I mean, I think if you had the guys from Glencore City here have got their, they've got their foot on the Arakun Bauxite export project. I would say that, you know, the requirements for them to get to, to permitting and licencing are just so cumbersome that it's

tight. You know, it's taken them years to to get to where they are and there's still no guarantee that project will go ahead. So, you know, they're suffering similar sort of issues. I think we should paint a bit more of a picture as well because I think we could probably come across as being a bit biassed. You know, we're a mining kind of podcast and we're, you know, probably by default more pro mining.

Like to think we understand or want to hear both sides of the the argument but there needs to be a more nuanced conversation here because the ramifications of the refineries not operating in WA is that in a growing aluminium market they it will happen somewhere else. Around, without doubt. And it will happen somewhere where there are far worse environmental standards, worse emissions.

Well, less certainly, yeah, yeah, I mean if the refineries, if it, if it, you know, you would hope it would never come to that. But you know, if we lost more refining capacity in Australia, the world needs it. So where's it going to migrate to? And you know the, the, the outstanding candidate is Indonesia. So I would expect that we would see even more capacity go into Indonesia than what we're already forecasting should Australia's refineries, you

know, closed down. It's. Such a, it's such a, a kind of chilling thought in some ways, like we've just watched in real time in the last, call it 18 months, every nickel producer in Australia just like go broke or, or go into care maintenance, with the exception of like 1 mine, an entire downstream kind of component of that industry completely obliterated to. And then OK, and where's what's what's happened in Indonesia's rapid? Like Indonesian policy is translated into the, the, the

build out of the downstream. And that also facilitated, you know, the the upstream expansion to feed that downstream industry as well. But there's a huge caveat here in that we can be more cost effective when it comes to this group of commodities as as opposed to nickel where we set higher on the cost curve and it wasn't economic.

That's true. We have the ability to be in a position here where we're lower on the cost curve as well as reducing a end commodity that is of lower total emissions that's. Right. I mean, that's the irony here. We should be building refineries, not shutting them down, especially in WA, 100% that's what we should be doing.

And we can't have the view that if we drop the aggregate or the sort of total Australian emissions that it's a good thing for the world because they just go overseas and they go overseas at potentially a multiple. The world will, the world needs what we're producing. We don't produce it. The world will produce it somewhere else without a doubt.

So that's, you know, it's now is a pretty important time I think from a, from a policy perspective to get it right and set it and let the industry, well from my perspective, let it expand. This isn't just an Australian problem. I think I cannot. I know there's the Australian context, but yeah, I think I think broadly there's, there's a, there's a lot, there's a, there's a lot of this, there's a lot of this in the US There's

that. There's more than this, more than this in the US There's, there's a lot of this in in Canada too. There's like, you know, Western jurisdictions over a long period of time, Australia's hopefully had some sheltering for, for a while, but things are changing. But there's been a, a tendency to a want to export kind of our emissions and industrialization to to China and other parts,

just not, not in my backyard. And, and, and be a kind of a, a disconnect in what actually kind of happens as a, as a result of that. And, and, and then an environmental, an environment of kind of policy settings that makes it like challenging to encourage investment because you need certainty like, like, you know, investment. If there's one thing that just like scares investment away, it's it's uncertainty. Uncertainty can, can manifest in

a lot of ways. It's like timelines that blow out when they should have been certain or it's, you know, regime change that where you previously had certainty, all of a sudden, you know, things can get rug pulled from you. Those things kind of massively undermine any any, any investment. Why would you invest somewhere where those are risks? Yeah. It's interesting you kind of say that in the, you know, you think about what's happened in this industry with respect to Guinea.

Yeah, right, Because now we have, now you think of it as you know, China's producing 60% of the world's primary aluminium, right. And so the bulk site required to produce the Lumina that produces that primary aluminium is probably now running about 45% of of China's needs. So there's an addiction there, right.

But that means that it's 30% of the world's primary aluminium is now reliant on one very small politically unstable W African country that you look at and you think from a supply chain risk. I don't think I've seen that level of risk in the aluminium industry as long as I've been in it.

Is that and there's is the fear probably probably in China, probably globally people who who require the metal it's that the fear is that like it just takes one bit of political instability can kind of compromise that for 12. Months. Yeah. Well, I think that's why, you know, you're starting to get signals out of China that they should be diversifying more, you know, in terms of their supply. But where? Where? Where do you get it from? Yeah. That's the problem it.

It could get to a a risky kind of point where a small group can have control in a country and and hold a a world at. And industry. Is to to ransom in in a way sort of knock on wood that doesn't kind of happen, but it's a risk when you have such concentrated supply. That's right. I mean, there's a lot of talk in the industry that at some point thinking in government will, you know, increase the royalty or do something different because they do have such a such a huge control.

But I think right now the lever that they're looking to pull is to, you know, is to force companies to build refineries, you know, in in country. And that to me, like I said, I mean, I, yeah, it kind of makes sense, but you know, get in the queue, get when your, your time is not here yet, but your time is coming. And so prepare yourself for

that. But it's true, you know, there, there is a, there is always the, the risk that they can, you know, they can have more of an influence on price that they have at the moment. That there's a there's a positive to that as well with SIM Andu going ahead in in Guinea and you know, Rio Tinto being in and interest there as well as I'm sure there's some overlap with Chinese parties as well. They can sort of say it.

They can say we're not going to put in all this amount of money if you're going to muck around with other part. I mean, there's a yeah, something sort of channel to think about down there is right? But usually complex and component of the whole Guinea story, yeah, is what's happening with Simeon do and the role that, you know, Chinese companies are playing in that. How do you say that? I see see men do I mean, it's going ahead, right.

It's you know, we get updates regularly because we got a we got an office in Guinea. So you know, you see it coming and it's high grade, high grade iron ore and it will, it will come out in some fairly substantial volumes over time. And you know, we're kind of cost curve fundamentalists. So you look and think just displaces whatever sitting at the top of the curve goes, you know, whether it's 100 million tonnes or whatever the number is, but. 180 is what we've been

told is the that the high cost. Is the tough it's target volume. It's well the, the I know cost curve is, is step, but you've got the high cost miners that kind of keep, keep price where has been for a good period of time. But that that high cost proportion is 180 million tonnes worth. Simon do maybe by the end of the decade could be 120. Yeah, that's something I don't know if you believe that. I think they could ramp it as

fast as they they possibly. Could well I think what they've demonstrated with bauxite is that they can do it yeah. So I have no doubt that, you know, whatever the number is that they're going to target that they'll. I'll get there. The Excuse me. The thing about cement do is though it is a long way yeah. So, you know it's like 600 and I don't know 3600 and 36140 kilometres. Then you've got a trend. I can't remember whether they're translating or not, but on our

numbers I think we did. It was about maybe 40 bucks if I be, so it's 70. Ish. The grade landed grade, the grade that's right via you back to the value in use, right? What, what impact that has? That's right. And then for the low, I think about the low cost producers as well. It's like you don't just get punished on a proportionate basis to your grade, your realisations disproportionately get punished. Yeah, yeah. But thankfully that's not box I'm illuminated just yet.

Not yet, yeah. What do you think the industry will look like in in, you know, I mean, you've been doing this. Yeah, for too long, 30 years, I'm the only one left in the everybody else's. You know, natural nutrition has taken everybody else except me. 30 years from now, what does it look like and who are The Who are The Who are the big winners and who are the big losers? Quite a hell of a question from an aluminium perspective, I think.

I think China solves it's, it's it's a carbon issue for for the production of electrolytic. Yeah, aluminium. Recycling and. Recycling renewables, nuclear, whatever it is that they, they will, they will solve the problem and then we'll see the, you know, the, the, the footprint, the carbon footprint for the aluminium industry will plummet as a result of what they I. Mean that's the answer in the room we didn't even talk about today was the the the the 6% of carbon emissions come from come

from the refining. Of smelting. Smelting. Yeah, Yeah, Yeah, that's right. Yeah. So, you know, China has to address that. They are at the moment, but I think they'll take some some pretty big steps in the future to reduce, you know, the carbon footprint for their own primary aluminium. So I think they I think in that sense they they, they kind of win.

But I think you also see other countries where you've got availability of low cost energy, you see smelters, you'll see more smelters start to, to pop up. And whether that's the Middle East, you know, or you know, some hydro around Southeast Asia or some other parts of the world, I think they, I think they start to, to win a bit more. I'd love to be able to say that

we Australia wins as well. We build more refineries and we, you know, we, we have more refineries sitting in Q1 because we have the, we have the raw material to do it. We have the capability as a, as a country to do it. So you know, you want that to happen, but whether it happens or not, you know, we'll see. But the other big change will be recycle. See much, much more recycle come back into the into the aluminium world. And the efficiency get better that.

Yeah. Well, the green aluminium, you know, whatever that means, you know, you'll just see the demand for that increase more and more and that will pull in more and more. Recycle, recycling systems will improve. Recycling capability will

improve. Do you think it'll be like a, a market that will like generally be balanced most of the time because there are these like large long life reserves that can be tapped into, but we'll just have have intermittent periods of being like, you know, tremendously imbalanced and price. Yeah, I think that's the, I mean if you look at the history of the industry, I mean it is a capital intensive industry, right, smelting, refining and so

forth. And you know, if you look at the sort of the supply demand balance, the history of supply demand balance, it doesn't really change that much. You guys are too young to remember what happened in the 90s with the, with the, the, have you ever heard of the MOU in the aluminium industry? The MOU was when, when the, when Soviet Union collapsed primary aluminium flooded into the, into

the rest of the world. And so the, the aluminium producers at the time, the rest of what they had to get together and, and, and sign what was called an MOU to cut their production to, to compensate for the amount of primary element that was coming in and, and the industry as a whole. I mean, they did it. Yeah. Effectively, all of the big producers at the time got together and said, OK, we're going to for our own survival, we have to have to make some cuts.

Curtailment curtail behaviour in some. Ways an OPEC style thing but more for survival then for more. Amazing survival. That's right. That's right. And they kind of weathered that storm, but that's the only, you know, other than that, the market sort of, you know, goes in and out of balance. You might see some refining capacity come out somewhere or some smelting and, and things might go out of balance for a

while. But the industry tends to work together, you know, to, to to sort of compensate if that happens. In 2018, the largest alumina refinery outside of China, which is any Norte in Brazil, was forced by the Brazilian government to cut half its capacity for a whole bunch of reasons. And so the alumina price, you know, sort of up to sort of six, $700.00 a tonne. And so there were a lot of smelters that were short aluminium all of a sudden.

So the industry kind of came together to make sure that the smelters that needed the aluminium got the aluminium rather than force them to close because that's a disaster in the army industry, right, if the force a smelter to close. So the point is that it's, you know, it's more or less balanced when it gets out of balance, the industry tends to kind of work together to, to make sure that nobody kind of really that you don't lose anybody because it's a, it's a big deal.

It kind of, I can see that continuing to be the case that things are more or less in balance. You know, when it comes to Illumina, the way that the world has kind of worked over the past, I don't know, 10-15 years or so, is that China's kind of acted as a bit of a sponge. If there's been surplus alumina, China tends to kind of soak it up and that keeps things in balance as well.

So from that perspective, the industry kind of works pretty well together and you would hope that that would continue to be the case, you know, for the next 1020 years or so. Let's hope so. Yeah, let's hope so. We'll see. There's one last like I don't even know if it's a derivative of the complex, but it's it's one of those sort of actually made the critical minerals list before alumina bauxite or aluminium ever did high purity alumina. What should we, what should we

think of that? OK, the way to think about high purity alumina is that the world that that. I mean, first of all, you have to define high purity alumina. Yeah. How? Many NS. How many NS? That's right. And so we would say you start at four. Yeah, it's 4 N and above. That's what we would call hyper alumina. 3 N yeah, that's industrial mineral. The N is how many 99 point?

99.99 is 3 NS and so forth. So if you look at just the high purity market today, including China, I think it is one large boatload of alumina. Oh, it's about 60,000 tonnes, 5560, something like that, right.

But the thing about, about HPR high purity alumina is that there's so many different applications for, for hyperity alumina, whether it's, you know, sapphire for, for LE DS or, or, or, or polishing of semiconductor, you know, whatever it is, there's lots of, and, and every one of them has a very specific requirement of the HPA.

So it's not as if, you know, you can't think of it as a, as a commodity or like a, there's this thing called 4N or 4N plus alumina and that this is what it looks like. It's just absolutely not the way the market works. It's more like a pharmaceutical product, that's the way to think about it rather than like a commodity, you've got to think about it like a pharmaceutical. And so it's almost produced in batches for particular applications and those applications are changing rapidly.

So therefore the requirements of the HPA are changing rapidly as well. So you've got to kind of get yourself as far away from thinking sort of commodity and cost curves and marginal time as you can possibly get, right? Gotcha. And think about it in those in terms of those very specific applications and what they're prepared to pay for it. Very specialised but potentially a high margin business if you can do it well. Well, not potentially, I call it a high margin business now.

Yeah, if you can do it, well, if you can provide, if you can, if your technology, because it's about technology, right. Your technology can produce the, the requirement for that particular application, whether it's a polishing, you know, application or whether you're growing the sapphire for the LED or you know, whatever it is. Then if so long as you can, you

can meet that specification. And by the way, you've got to become qualified to to supply that market and the qualification process can take you a year, right. So it's a, it's a very, very specific market that you know that like I say is is far away from smelter grade alumina as you can. And then your. Best businesses are someone not much smarter than me. So the best types of businesses are when you're a small but important part imperative part of a big inexpensive process.

So you have phenomenal price well. Hopefully. Semiconductors, yeah, you know, or, or LEDs for that matter. So pricing power is something that most commodity producers don't have, you know what I mean? Like, like, I mean that's the definition of a, of a commodity in that sense that you, you know, you've got a terminal market, yeah. And that you, you know, you can't control the price. You it's just all about where you sit on the on the curve, on the cost curve. HPA completely.

Yeah, that's right. I mean, I like that, that analogy. That's, that's that's where HPA is today, I think. Yeah. That's riveting. What? Is there anything you want to, you know, leave our audience with or thinking about Alan? I mean, yeah, what, what, what, what sort of, you know, views haven't we traversed today that you're kind of, you think would be kind of worth, worth hearing. Although we haven't traversed. Yeah, well, that's a good question. I think Jesus were covered a

lot. Yeah, I'd like to bring you back from manganese and Tungsten and. Yeah, and every other yeah Mag I've I've. Magnesium. Magnesium is I'll I'll leave you this to think about right just for a magnesium this can right every alloy like the alloy of the body, the alloy of the top and the alloy of the tab are all different, but every one of them contains magnesium, right. So the biggest use of magnesium is the alloy in aluminium Yeah.

So if you can't get the mag, can't produce the alloys that are required to make all of these sorts of things, window frames or you know what, all the stuff around here, that's all aluminium, right? China produces today somewhere between 85 and 90% of the world's primary magnesium. Seriously. That's something to think about, right? You talk about critical minerals and so forth. I didn't know that. It's quite amazing. That's going to give us a rabbit hole to to go. Yeah.

Well, it's an interesting one to, to, to dive down that. I mean, so I was going to say from a like from a, from a, from an aluminium perspective, I think, you know, some takeaways here that I think people don't really understand all that well. It's just the versatility of the, of the, of the, the metal to start with right at, at the one end, but at the other end, this massive concentration of where the raw material now comes from for the world. You know, it's a an interesting

situation right now. Amazing could be set of many. Many medals as well. Yeah, one last. One hello. Sorry, go. For it keep, I'll keep going. I want, I just want to include this misconception. Sure. We had a bit of a chin wag before we recorded you. I, I'd spoken to you that I'd heard that, you know, aluminium, if you own Alcoa, you kind of get exposure to Freeport or vice versa because in some ways these are substitutable metals. They're both pureplay and they're hyper correlated kind of

stock. So if you, if you're exposed to copy, you're exposed to Ali because you know, heck, at some point these markets are very substitutable and you took issue with that immediately. I did. I'm not a big fan of the, of the of the argument of substitution. And in, in some respects it kind of comes back to to, you know, we were talking about mag before as well, because magnesium is substitutable aluminium in die casting and it's an easy

substitution. You know, if you compare it with, you know, substitution of, of aluminium for copper, for example, it's, it's complicated. It's not just, you know, you look at the ratio of the prices and you know, get up the next day and say, well, they look at the Ali price, look at the copper price. I'm going to switch it just it doesn't happen that way. And you think about the applications that the copper is being used in, for example.

And if it's a if it's a, a motor, like if it's a wound motor or whatever it is then. And if it's sitting in a car, an EV or you know, or whatever, then that that car has been through a process to have it, you know, legally on the road.

That process has to be replicated if you're going to swap out of copper and swap into into aluminium, for example, not only have you got a whole bunch of materials issues you're going to have to deal with just in the the differences in weights and you know, and conductivity and so forth. Then you have to go through the whole compliance, you know,

issue as well. So to say that, you know, look at prices and you know, get to certain ratios and you kind of flip out of one, I just think is a nonsense. I think it takes some applications. I would agree that you know that that that are not non critical kind of applications. Maybe you might see a bit of substitution, but in big, you know, big chunky kind of uses for those metals, substitution takes a lot of time and I just I

don't see it happening. I also sort of take issue with the fact that, you know, that that copper prices might move, you know, relative to alley prices, for example. You know, one moves without the other. So you know what what kind of what kind of drives that? Why would one move? They tend to move in some respect together, not, not, you know, not a strong correlation, but they'll move. What's affecting one often

affects the other. So, you know, I just I, I, I can't see it. I mentioned mag because, you know, die casting is something that you can switch from ally to mag. You know, I want to say reasonably hassle free, but if a die cast ever heard me say that they would shoot me. More hassle free than switching for it. That's right.

It's more hassle free and even they find it difficult to because they've got to retool, they've got to change their furnace, they've got to change everything over to another metal that, you know, in six months or a year's time it might reverse.

What's the price? So you have to have a, you know, you have to have a long term view that Ali price is going to be significantly lower than copper for the next decade before you seriously consider, you know, you know, switching some, you know, high volume critical kind of applications. Supply chains don't turn quickly these processes. Change long time that that's right. So you know, I I do take issue a bit with that. So yeah. Yeah, this has been amazing.

How long have we been going for? No idea. I've learned. I've learned a complete boatload. And I'm just on boatload. Let me say one more thing. Boatload's interesting. You know, we're talking about the different types of bauxite, right? Yeah. I just, I just, I had this thought this morning that there's there's a vessel you should look up. It's called the the the bulk Jupiter. Do you know what liquefaction is?

No. So liquefaction happens when you've got a solid, a solid material that's got maybe a high moisture content that when you start to move it, it becomes a liquid. Yeah, yeah. OK, So that's liquefaction and at least two bauxite vessels have sunk and I think they were coming from Malaysia. The bulk Jupiter was one of them, right? Because it, you know, you hit some rough sea and the bulks like because the, the, the moisture content of the bauxite

was greater than 20%. So you know, this vessel moving on the ocean liquefied the cargo, so changing from solid to liquid, right? And so once that happens, you've lost control. The vessel, it sinks. So the weight was just. It was moving, sorry, it was moving with the, you know, as the, as the mess vessel moved in on the ocean and it and it tipped.

But it comes back to this, you know, this whole idea of books and we're sort of where we started, right, That, you know, there's bauxite and there's bauxite, there's bauxite, but you know, you pull it out of the ground as a like, as a, you know, just ESO onto a boat. It's got 20% moisture. You know you're out and seeing, you know the bloody thing sunk because it because the cargo liquefied. That's incredible. Yeah, it's amazing. Anyway, there it is guys. Thank you.

I hope that's been of some value. This has been a phenomenal. Value to you. Don't look, I mean I've got 2 cans of people's hairs on I seriously can't go wrong. I mean, you had me at free Beer by. I'm very much looking forward to doing MAG and every other. Yeah, Tungsten and Molly in a few of them. Yeah, can't wait. Thank you so much for your. Time. It's a pleasure. Good stuff, boys, Jay. They'll go to the the Interview marathons these days.

But tell you what, you probably could have gone for another hour if you want. Part of me feels bad that we're taking so much of their time, but it's I want them to go so good. I learnt so much in that discussion. So it's, yeah, a real, real treat to share that one with the money miners. JD, when you're old and grey mate, you're going to be given back to the young, young fellows as.

Well, I'm not sure I'll get to Alabini mouse level, but let's hope so, Maddie. I don't think you'll ever go grey, you'll just like you'll just be young and fit forever. But ah, good work boys. Sensational. Hope everyone enjoyed that and I enjoy talking about MMS every day of my life. Just like I enjoy talking about Grounded Cross, Boundary Energy, Sandvik Ground support, CRE Insurance, Greenland's equipment, K Drew, MMTS, Australian Earthworks and Haulage and Sparkmatty.

I enjoy you doing that for me, JD. Have a good weekend. Money. Manners. Information contained in this episode of Money of Mine is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Before making any investment decision, you should consult with your financial advisor and consider how appropriate the advice is to your objectives, financial situation and needs.