Entretien fructueux avec Mark Cutifani et Jonathan Price

_{Theo Yameogo: Alight, so, I promised that we're not going to waste more minutes just doing intros and reading long bios. So, I'm very happy to welcome to the EY Tower. Mark Cutifani, who's the Chairman of Vale Base Metals, and Jonathan Price, who's the CEO of Teck. If you're in the mining industry by now, you know these two for sure, and you would have seen Paul Mitchell talk a lot about top 10 risks for EY globally. Paul is my colleague and one of my bosses at the global level. So, he's our EY Global Mining and Metals leader.}

_{The goal of this session today is to keep it conversational and to focus on certain topics that are dear to the panelists. And we probably not going to have time for questions, so, if you have questions, you can send it to me later and then we can have an email response.}

_{So, we will start with ESG, and I've heard a lot of different perspectives from all three of you on ESG. So, the reason why we want to talk about ESG is that in the top 10 risks, which you will see up there, ESG has ranked really top for the last three years. It has had different definition. And, you know, in your previous life, in the current life, and also, Jonathan, you as a member of ICMM, so, there was this nature positive commitment made by ICMM members. So, we want to know what are the key initiatives that your company is focused on that is related to the nature positive aspects of ESG. Want to start with you?}

_{Mark Cutifani:  Great to be here. Thank you for the opportunity. And maybe if I open with a somewhat controversial point. I hate the term ESG. But I understand the point of the question. So, in terms of our organization, what we're trying to do is redefine the conversation. And so, we talk about the term sustainability. It's an economic term. And that we explain the importance of free cash flow and what the target should be to return on capital. So, making sure that we've used capital wisely to deliver free cash flow, because I've seen companies blow their balance sheet up to deliver some free cash flow for a period. So, let's make sure we get that balance right. And then we talk about the seven pillars of sustainability and those seven pillars, safety, and health. So, looking after people. Environment, looking after communities and our responsibilities to those communities. Social performance. So, it's about partnerships with local communities and on a much broader basis. Fourth, is people. Talent pool making sure we've got the right people. We're bringing people through and we're looking after people and delivering on their personal expectations. Five, resources, reserves, production, sales, customer relationships. Six, competitive cost position, making sure that you're making cash through the cycle. And then seven, balance sheet, keep it conservative. Countercyclical investment is always a great opportunity in our business to make money. And if you can get that right, then you do and will create a sustainable business and we think that's the right conversation to have.}

_{Theo Yameogo:  Good. Thanks, Mark! Jonathan, at Teck, how do you guys see ESG?}

_{Jonathan Price: Yeah, again, I'll veer away from the term ESG. We'll talk about sustainability or responsible mining. You know, that is a key foundation of how we work and how we operate. It's something that our people passionately believe in, but it's also critical to enable us to do what we do. Ultimately, we are looking for opportunities to develop new resources. We have to do that through partnership with the communities that are proximate to those resources, including, you know, the Indigenous Peoples, who have been the custodians of that land for many, many generations before we arrived. And the best way to get access to those resources and to operate those resources, in a resilient manner over time, is to be holding ourselves to very high standards, in terms of responsible mining. And this is where the ICCM plays a key role in setting and establishing standards that the members, that the industry more broadly can work to. Now, to your point on nature, you know, we ran a survey with the ICMM a little while ago to understand how society feels about mining, and it's a sad fact that mining is the least trusted sector of all sectors. You, know, even you know, as compared to oil and gas or as compared to financial services or pharmaceuticals, you name it, were the least trusted sector. But when asked what we could do to improve perceptions of mining and improve how society feels about mining, the most quoted priority was to do with improvements in nature and biodiversity. Now the mining industry has been dealing with nature and biodiversity for all of its existence.}

_{It's what we do. We operate on the land and with the land. So, as an industry now, we've made some significant commitments to support nature positive. You know, it is nature protection and managing biodiversity loss is now a priority that sits alongside climate change and carbon emissions reduction. The World Economic Forum will tell you that $44 trillion dollars of GDP are moderately or highly dependent on nature. So, that's half of the world's GDP dependent on nature. So, it's reaching that state of an emergency now where we need to act quickly. The ICMM has recognized this. We at Teck recognized this a couple of years ago. We were one of the first companies to make a commitment for a nature positive future by 2030. That means for us that for every one hectare of land that we disturb through our activities, we will conserve or rehabilitate three hectares of land. So, that's where you get the positive outcome through that 3 to 1 ratio.}

_{Some of the things we're doing. A lot of innovation into land management now and conservation. Working in partnerships with groups in the regions where we operate, particularly in Canada. In Chile we've conserved now 52,000 hectares of land through investments that we're making in partnership, for example, with the Nature Conservancy of Canada. Progressive rehabilitation is an area where we can drive improvements in nature, where we are restoring and rehabilitating mining areas as we continue to develop new mining areas proximate to that. Actually, this can be a very good economic outcome for miners rather than holding on balance sheet these large closure liabilities till the end of life. We can progressively rehabilitate where we work, but we also have to think about all the levers and mechanisms that exist in markets to facilitate this.}

_{We issued a $4 billion dollar sustainability linked loan a couple of years ago. So, we're trying to stimulate financial markets to support the investments that need to be made in nature and biodiversity. We've also, been an early adopter of the TNFD recommendations, which is the Task Force on Nature-related Financial Disclosures. Again, which is very important in capital markets. So, we're thinking about this at all levels, what we can do at our own sites, what we can do to conserve other areas of land, and what we can do in the broader ecosystem to facilitate markets to help fund what needs to be done. But it really is an emergency. But it's something where the mining sector has a lead, like we have an advantage. We've been doing these things for decades, for generations. And when I talk to CEOs from other sectors, they're still trying to figure out where to start, like, how can we have a positive impact on nature? What are the things we can do? And while for some people, this is an odd sort of juxtaposition that the, you know, the mining industry can be leaders in biodiversity and nature restoration. I think that's true because it's in our DNA, and it's the experience that the people in our operations have had for many, many years.}

_{Theo Yameogo:  Okay, thanks Jonathan. Paul?}

_{Paul Mitchell:  I might add to that one. Yeah, I'll continue the theme of things I don't like. I don't mind ESG. I'll come back to that. But the term I hate that we all seem to have been obsessed with lately is Net Zero. I think, you know, no achieving person or organization ever aims for zero. I think that's one of the reasons I love this idea of net positive and the way that that ICMM is framing that because if you aim to be positive and if you aim to add a benefit, we're actually going to do something about the brand. We're going to convince people we want to do something; we're going to inspire people as they go along. And so, I really do like, I like that positive benefit. And I think, yeah, can all point to fantastic things that the industry has done on a personal level, but also, for society, in terms of the way we're going. So, I really like that switch because I always had a problem with Net Zero. It was a term I've never liked.}

_{I think the reason I don't mind ESG and sustainability is a better term is I think traditional capital markets and their focus on quarterly results and improvements and what we have to do and the way you see share price fluctuations based on irrelevant matters in terms of what's there. I think the way that the conversation around ESG has helped us sort of lift the focus, you know, not to what we're doing in five, ten years and setting up society for a better life. But at least a couple of years, we've got to with markets now where we're not quite at the whim of quarterly production reports and quarterly results. We're still going to deal with commodity prices. We'll always have that one. But I think that's been the big positive for me, has been that slight increase of the boundary of the time frames that we've had to think about, which I think has been fantastic.}

_{Theo Yameogo:  Yeah. I remember last year we identified the changes of stakeholders. People that want to have a voice in mining and, you know, the financial market, there's a new group of them that really focus on this sustainability reporting and the end result. There's another group of stakeholders that always been around mining and it's the government. And you all operate globally, and we are all aware that about 60% of the world GDP will be in elections in 2024. And we also, have a lot of experience knowing that sometime everybody looks for the scapegoat for the election and the debates and where the money should be. And we also, know that there's inflation around the world and people are struggling to eat and, you know, food and shelter, really.}

_{How do you foresee a refocus on the commodities and how do you think it may change our behaviours or not going forward, especially based on this idea of sustainability and this idea of positive impact? And I'm not going to name countries, but we know that our neighbour is one of them.}

_{Mark Cutifani:  Can I make a request of EY? Specifically, could you help us reframe the global debate around mining? Let me explain.}

_{Theo Yameogo:  Okay.}

_{Mark Cutifani: So, if I take both Jonathan's and Paul's points about being net positive, and you heard Jonathan talk about a whole range of initiatives that are industry leading, and Teck has done a wonderful job and that in that frame.  Water. Without the products of mining, we couldn't purify enough water for domestic use. 10% of the world's water goes for domestic use without the products of mining to purify, pipe, pump, distribute water. We couldn't literally provide water to people for people to survive. We consume about 3% of the world's water. We are net positive water in such a positive way. We need you to go and do the calculations and just prove the point.}

_{Two, without fertilizers, we could only feed half the planet. Now, if I turn that the other way, we use 40% of the Earth's surface to feed the planet. Without the products of mining, including fertilizer, and without the ability to mechanize farming, we would need 50 to 60% of the Earth's surface to feed 8 billion people. Urbanization. Building up, as opposed to building out, the products of mining, are absolutely critical in terms of being able to urbanize and concentrate populations to minimize our footprint. And we take up 15% of the Earth's surface for urbanization in infrastructure, and it would be more like 20 to 30%. So, if you do the numbers on all the things that we do without the products of mining, it would be at least 80% of the Earth's surface required to look after us. It's about 50 to 55% as a consequence of mining. We are the most positive, environmentally positive industry on the face of the planet, and nobody knows. We need you to help us.}

_{Theo Yameogo:  I'll work on that.}

_{Mark Cutifani: Second point. We use 0.3% of the Earth's surface. And even if I was really rough and said, okay, average mine life 20 years, you probably use two of those footprints in the life of the mine. Go 100 years. It's about 1.5% of the Earth's surface over 100 years. Assuming that the current statistic of 50% of our rehabilitation being effective. So, how do we do a better job? How do we do exactly as Jonathan's talking about in terms of improving those footprints? And how do we tell that story? Then governments will take notice.}

_{Jonathan Price: Yeah. Look to that point on governments. You know, it's been great to see their recognition of the need for the mining sector to continue and accelerate the development of critical minerals in the years ahead. You know, it's a shame almost, that you have to get to a crisis for that to be recognized, which is how this has come about. We've had the crisis of  climate change, the recognition for decarbonization through electrification, which has big implications for critical minerals, but mining more generally for the ongoing infrastructure that's required to support urbanization. But we’ll get there eventually, and governments then have good intentions around critical minerals strategies, critical minerals policies. What we need, of course, is those good intentions to be converted into real action and activity. You know, the one you'll hear cited all the time, of course, is the permitting timeline. You know, we need to accelerate permitting if we've got any chance of even getting close to developing the mines that are needed to meet the demand forecasts that we see in markets today.}

_{But more generally, I think, you know, governments need to provide us with predictability. They need to provide us with stability. They need to provide us with fiscal terms so that we can work around. You know, we have to make very, very long-term investments. You know, we sink billions of dollars into the ground for a number of years, and we have to get a return on that. And when the rules change, it's very, very hard for us to convince our investors that these decisions make sense and that we can actually generate a return. And governments can directly impact that. But stability and consistency over time is important.}

_{The other thing we need governments to do is collaborate with one another. And I'm sure this will be a broader topic of conversation. I know it's a passion of Mark's. You know, we as a mining industry need to collaborate with one another, but governments need to work to take the friction out of the system that exists today across borders, and if they can do that, and if we can incentivize more investment, then we have a shot at developing the mines that we're going to need for the future. So, you know, good intentions, good statements. You know, we see a huge presence here at PDAC this week from Latin American governments. That's fantastic. They're all here. They're engaging with the mining sector. They're looking for investment. They're trying to encourage us to develop projects in their countries, but there's a number of things they need to do in partnership with us. And we need to do in partnership with them to make this work.}

_{Theo Yameogo: Yeah. Paul?}

_{Paul Mitchell: Thanks, Theo. Yeah. Look, before I start, Mark's comment on mine closure and they need to do a better job of mine closures is a really relevant one. Mr. Peter Bradshaw's here today. Thank you, Peter! Peter supports a foundation out at UBC called BRIMM, and they run micro certificates on mine closure. So, any of your teams that are looking to develop that, you know, the plan is to make it a proper degree, a master's degree. But education around mine closure, making sure people understand that is fantastic. And BRIMM and UBC are doing a great job with that. So, I just wanted to give that little plug and thank Peter for that.}

_{Look, I mean, politics is an interesting one. I'm very tempted to get myself into trouble, but I won't do that with certain comments around once there. I think, though, one of the things that I'm keen to see is a movement in policy to recognize what government's role should be in decarbonization and nature positive. I think if I look at the way incentives are working at the moment, you know, take the IRA, they're all about funding hydrogen projects or battery production plants or these sort of things, that to me, are the end of the energy transition. They're the last thing we need. The energy transition needs minerals or it's going to stall, you know, and we are subject to volatility. Copper is always going to be volatile. But if you particularly look at nickel it's always going to be volatile because of where it occurs. And lithium, with such a small production footprint is always going to be up and down. And so, government policy needs to switch from me, the end of the energy transition to the start. They need to work out what is it they can do to make it easier to develop a mine, to give you that certainty, to give you that predictability, to understand what's there. If those billions of dollars that were going as commitments to, you know, produce green hydrogen 20 years’ time went to supporting some mining projects and understanding, how do we get those up? How do we understand that we give certainty to our projects so, it gets to development, then we'll get to 2050. My worry at the moment is we're not going to get there because we won't have the minerals that are required to get there. So, that, you know, that really worries me.}

_{Theo Yameogo: Yeah. So, I remember eight years ago we had an event and Robert Friedland, I think was not too much after Avatar and Robert Friedland was saying that we need to make a movie to counter Avatar, but then he went and made a different movie, which I'm not going to name. Don't know why.}

_{Paul Mitchell: And then they released Avatar 2 and it didn't matter.}

_{Theo Yameogo: Yeah. So, sometimes I wonder, when it comes to educating the masses. So, because government respond to demand from the masses. How much, and I know some of you actually been vocal about education. How much education or how much awareness and what kind of, probably going to be TikTok one of the solutions. But what kind of solutions do we do to get the mass, like the populations, to understand mining before we even waste time on government?}

_{Mark Cutifani: I think it's the right question, and it's one that I think we've all grappled with in one form or another. And there's no one solution. I think it's a whole range of things. But what I believe is that we need to start early with teachers and children at school. And I wouldn't start with mining because it self-serving, it's too narrow. I would like to see courses around the explanation. We used to call it social studies or geography, but how the World works and the book by Vaclav Smil on how the world works is a wonderful document that should be a textbook for every school in the world in terms of understanding how things work.}

_{Quand il s’agit d’expliquer le fonctionnement du monde, le secteur minier trouve naturellement sa place dans la conversation car, en premier lieu, tout ce que nous consommons provient de matières premières et le seul moyen d’en assurer l’approvisionnement, c’est d’exploiter la Terre, d’une manière ou d’une autre. Si une partie de ce que nous consommons est cultivée, tout le reste est le produit d’activités minières. Lorsqu’on commence à prendre conscience que notre secteur se trouve au cœur de tout, il faut le situer dans un contexte global, ce qui change fondamentalement le dialogue social autour des activités minières et les conditions de leur réalisation, de leur mode de fonctionnement et de ce que nous pouvons faire pour améliorer la situation.}

_{It's a bit like the COVID story I was telling the other day where a minister rang up and said, we've just shut the country up and all the mines are closing and we're going to send everybody back to their local villages. And I said, what do you mean you've closed the country? And he said, well, we've closed the country. We're going to stop; we're going to break COVID. And I said, well, if people didn't have COVID before they were sent home, they will by the time they get home traveling across the country. And by the way, can we keep the water pumps going? What do you mean? Well, can we keep water flowing into houses? Oh, yes, of course. So, everything shuts down except the water. I said, what about the lights? What do you mean? Well, do we turn the power stations off? Oh, no, no, no, we got to keep the power stations running. Okay. Everything except water, power. What about food? Because we're going to run out of food across the country in three days’ time. Well, we've got to keep transporting. What about fuel? And about the seventh point? I won't swear. But he did say, oh, we got this wrong. I said, well, you think? But to be fair, we then had a conversation about how business, government and key players in the community could work together.}

_{Within three days, the country had a strategy where it was looking at how it did its best to look after people, set up the infrastructure the right way, and it was a collaborative effort, and it was brilliant what they did. But it goes to that point is, we don't most people don't know how things connect. And it's a reflection on us that we're not taking kids through that process at school. And I think mining then becomes a natural consequence of that. Or an understanding of mining becomes a natural consequence of that starting point.}

_{Jonathan Price:  Yeah. And I think in addition to that, Mark, you know, and there's the understanding of the role that mining plays and how important that is.  That is something that we can communicate now as businesses with a real sense of purpose here in terms of why we're mining and what we want to achieve. But to go back to the point I made on trust earlier, you know, the industry has a serious image problem. And, you know, young people are not clamoring to get into the mining industry, therefore they're not studying the technical courses that we so desperately need to keep this industry running. So, it's something we have to address in a whole range of ways upstream.}

_{But again, we have the issue where nobody wants to hear the mining industry talking about how great the mining industry is. I mean, we all know that because we work in it and we all understand the sense of purpose that we're pursuing and why we do what we do, but we need others to advocate on our behalf. It would be great to see politicians stand up and talk about the importance of mining. Now, I haven't heard a politician say that in my lifetime. I've heard a lot of politicians talk about shutting down mines in various countries and complaining about the track record as it comes to environmental performance or social performance, but to hear politicians recognize the critical role that mining plays in society or others with a platform,  you know, this goes somewhat to the OEMs, the, you know, the car manufacturers, the tech companies of this world who rely on energy, they rely on metal to do everything that they do. But of course, they don't want to tarnish themselves by talking about this dirty business upstream of mining. Well, their business models are going to fall down if they don't get the mines that they need.}

_{So, it requires advocacy from sectors beyond the mining sector. The ICMM will do its part. We will advocate for ourselves. We will set standards and meet those standards and exceed those standards and continue to raise the bar. It's one of the best things we can do, is to hold ourselves to account in a very public, transparent, and measurable way. But it does require advocacy from those who rely on mining to support what we're doing and eventually change minds, change this perception as to what we are, and to Mark's point, have people understand where we fit in the world and how critical that is.}

_{Theo Yameogo: So, Paul, I'm going to tweak the question a little bit. When more people talk to me about mining since the OEM started having these offtake agreement or alliances for critical minerals. Do you think that that's one path forward of changing the perception when we start seeing the other sector is coming out publicly saying they're having a deal with like a mining company?}

_{Paul Mitchell: Oh, absolutely. I think, you know, yeah, if we can get other people to speak for us, I think that's a great strategy in terms of what's there. I think, you know, we've started to, you've seen governments moving to talk about criticality. Critical minerals is the other word I hate. But we can get into that because I know Mark hates it as well. They're all critical, right? Even met coal. Just had to have to always divert to that one. Look, I think yeah, we've got all of these countries that put out that, you know, minerals are critical. We've got to get supply. We've got to understand what we're doing, the number of deals you see, the automakers signing, the technology companies signing in terms of what's there. I think you're right. We've got to get them. We've got to work out how we do the publicity around that to say, actually, the reason they're signing these supply agreements, the reason that they're making these policies is because, you know, our lifestyle would not exist without mining and just making sure people understand that. I think, yeah, we've all lived in Perth at one stage in our lives. It's something the three of us have got in common. I think when you go to smaller towns that are mining centers, the message is a lot easier, in terms of what's there. We've got to work out how we get it in the towns that drive capital and drive governance. And I think that's our big sort of challenge, is how do we influence those industries that guide the Toronto’s, the New York’s, the Sydney's, the London’s? How do we convince people there? Because that'll move the dial. You know, if we added another, if we had another 10% of people then in Sudbury or in Perth that thought mining was positive, we're not going to do much. We've got to work out how we do it in the non-traditional markets for us, because it's just as critical to their lifestyle as it is to those people in the mining towns.}

_{Theo Yameogo: Yeah. So, let's pivot a bit towards the business model changes, you know, we've seen Vale Base Metals separating from the Ferrous group. We also, seen Jonathan with the company, you know, focusing more on base metal or energy metals more than the met coal. I want to start with Jonathan this time, because you get to be second all time.  How do you foresee those kinds of trends in the sector overall and maybe, you know, factor in the fact that this idea that OEMs are also coming. Last year I remember Globe and Mail or Financial Post, one of the papers wrote that it was the first year at PDAC when we've seen OEM presence. So, where do you see the trend towards change of business model or change of portfolios. And also, where do you see the trend? Like how do you plan to succeed in this new way of doing business?}

_{Jonathan Price:  Sure. So, I think the development of business models is an interesting theme. I mean, I'll pick up the point you made on met coal and being a critical mineral. We agree, met coal is going to be needed for decades to enable the production of steel through the blast furnace route. That's not going to change any time soon. We've advocated hard to the Government of Canada to add met coal to the critical minerals list. Ironically, it's on the critical minerals list in Europe, which, you know, is trying to convert its entire industry to sort of hydrogen-based steel production. But anyway, that's on side.  I'll get to the question though.}

_{On the business model side of things, you know, we look at the, both the met coal and our base metals businesses as great businesses. They are both very, very good mining businesses. However, in met coal and I think the same is true of iron ore. I don't see these as growth businesses. They are critical businesses that will exist for decades and generations as a supporter of urbanization and to support the ongoing development of the population. But we don't see those as growth businesses. We see those as businesses that have very, very long duration, will have good margins and will generate a lot of cash flow. What that means for investors is these become yield companies. You know, they will get paid very, very good dividends. And you see, the world's biggest mining companies in recent years have been some of the biggest dividend payers on stock markets for exactly that reason.}

_{On the other hand, when you look at metals, because of the view we have on demand for the future, the opportunity there is to continue to invest capital in new mines and new growth. And that is a very different business model. It's a business that you manage very differently, but it also, offers a different proposition for investors because they're not there for the yield and the dividend. They're there to participate in the growth story. And that growth can come in a couple of ways. Of course, it can come by adding production units and cash flow, but it can also, come as we look at the demand outlook by improvements in the commodity prices that underpin those businesses. So, what we're trying to do in our portfolio is recognize the differences in these businesses. We're not saying that one is better than the other, we're just saying that they're different and really to give investors choice. And I think, you know, if you go back 20 years ago to when the China boom was starting up, there was a view that there was growth opportunity in every commodity you could look at. And therefore, diversified portfolios enabled you to access that growth with some resilience as things went up and down along the way. I think now we see investors wanting to have access to cleaner stories, to cleaner thematic. And by clean I don't mean carbon or x carbon. I mean simple to understand. What it is they're investing in, without having to do too much work across 20 different commodities, they can focus on the few that are close to the thematic that they want to play. So, for us, as we look at the base metals business, it's about energy transition, and producing the metals that will directly support energy transition. As I said, met coal will be a very important business, but we think it's better managed separately. So, that's the driver of the decision we've taken. Capital markets will play a critical role in the future development of the mining industry. We need to find ways to attract that capital. And I think that's best done through simple, focused portfolios.}

_{Theo Yameogo: Makes sense. Mark? First of all, is the company called Energy Transition Metals or is it called Vale Base Metals?}

_{Mark Cutifani: At the moment it's Vale Base Metals. Our recommendation and our internal conversation is around Energy Transition Materials on the basis that probably gives us a broader footprint to actually work with, but that's where we are, it's a conversation we're in at the moment.}

_{In terms of business models, if I start with, and I'm an engineer, so, mining engineer, which is sort of an engineer. So, if I look at the nature of deposits, you've got bulk resources, lateral development. Cost structures are probably, structurally move about 3 to 4% a year because your increased haul distances where the key area of focus is. And the quality may not change that much. If you're running a vertically thrown ore body like base metals, like metals, precious metals, those sorts of things, your cost structure, your structural cost base can be moving somewhere between 7 to 13% a year. So, its depth, grade, development, input inflation, energy, people intensity, exploration, all that sort of stuff. And so, you have to think very differently in my view on the business models and the work that you apply. So, if I use Anglo as an example on base metals. We were very clear in the bulks on how we would run the business and drive the business. In the metals, precious metals, those areas, we felt innovation was going to be key. So, for us to compete with the BHP, Rio and Vale that were dominated by the bulks that had a lower structural cost base shift, we had to do a lot more on innovation and technology and technical changes and work to compete. So, we started off at the 49th percentile from a cost position and because of the focus on the technology innovation work, we drove ourselves to the 28th percentile across the average cost position. So, we outpaced BHP, Rio and Vale in terms of our cost improvement over nine years, and that was a very conscious decision to look at the business model inside those business.}

_{The other point that we focused on were markets and premiums in markets. So, we built our marketing and trading business, not trying to copy a Glencore, but learning from a Glencore on the marketing side, doing better on the product quality side and then trading adjacent to the high-quality positions where we had high margins on the trading book. So, I think we have to keep innovating those business models. Then I'm with John in terms of the what do you keep in-house? What do you what do you maybe look? So, our portfolio work ends up being much more critical to an organization as we were.}

_{Now, Vale is a good example of Eduardo and I having that debate around the bulks, the iron ore business versus the base metals, very different mindset, very different technical skills. And he said, look, we've struggled to get the best out of base metals because we still look at it from an iron ore mindset. So, the idea of bringing ourselves in was, can you help us rethink the whole business model and build a base metals business that actually is built around the opportunities, both technically, physically and in the marketplace? And that's a very different business. So, I think the focus on business models and an understanding of how you create value is becoming more and more important and is becoming more and more differentiated, as Jonathan was saying.}

_{Theo Yameogo: Yeah. Paul?}

_{Paul Mitchell:  As someone who grew up in one of the big mining houses, I hope the conglomerate's not dead. Yeah, I think they all have a place. I think, you know, there'll be some. But I do really agree with simplifying the story and sort of getting that and understanding the complexity of what a base business is. And I love the word materials. I think that explains it really well because, you know, to manage a lot of those risks that are in the base metals business, the closer you can get to managing the full value chain, the better, because that's the real trick to sort of doing that and explaining to your stakeholders, how does that, how do you manage the capital and get close to your stakeholders? Because that capital intensity of the in base is not something mining companies have traditionally invested in, certainly not bulks businesses. And so, I think developing that model that we use for base metals businesses to transform them into materials businesses, to make them closer to B2C companies that can be reactive, that can be agile and nimble. Base metals, bulks businesses don't need to be agile and nimble. You just need to churn it out, in terms of what's there. And you know, you look at why we got in trouble during the super cycle because we just churned out material at any cost. You cannot do that in base.}

_{And so, I think I think the next development we're going to see is that move more and more to materials and explaining what that looks like, and that might not be done by the mining companies. It might be done with, you know, with collaboration, with understanding who are the other capital participants that want to play in that. How do we get capital from customers? How do we get capital from governments? How do we get it from the trading companies? And, you know, Mitsubishi has been making a fortune since Buffett put his put his money in there. How do we get some of that to help with that transformation, de-risk the mining company and transform us into something that can really provide.}

_{Mark Cutifani: Just one point. I forgot and Paul just jogged me. The role of the center. If you look at the large conglomerates or the larger organizations, the role of the center and being clear about what the role of the center is, I think is really important in terms of getting those business models right. And let's say, again, looking at a past life, we made a deliberate decision to build skills at the center because we were struggling to get the skills we needed to the sites. And so, it was a very conscious decision to build an innovation technical base, because we said we had to shift our cost position material. We cut, we had to cut our costs 50%, and we didn't have the skills of the sites. The operating teams were improving us 3 to 5%. We needed 20 to 30% shifts. So, we built the innovation team at the center to help drive change across the business. And then at some point you can morph into something different. But again, those business models and understanding technology and the opportunities and the new leaching technology and AI and all of those things, it's such a rapid change. I think the role of the center has been clear about the role of the center is absolutely critical in getting the business models right for the business. The internal consistency all the way through.}

_{Paul Mitchell:  BHP just announced a big restructure last week. To be interesting, I mean, that's probably more going back to a decentralized model. When you read it, it'll be interesting to see if that does change some of the other businesses to look at it. But I think, yeah, innovation is so critical, particularly in the next ten years. How do you get that to work is going to be really important. And I think a strong center that understands it will be critical. That doesn't mean you can't have something decentralized. That has to be clear.}

_{Theo Yameogo:  Shall we rebuild something like a Noranda Technology Centre?} 

_{Mark Cutifani: Well, so, I won't make specific comments on those but, in fact, […] and I used to talk about the Noranda stuff that that was going at the time. But the world is changing so quickly, the ability of the team on site to keep up with those changes and evolve is very difficult, given the community issues and all the things we're asking people to the site to manage. It's very difficult to keep on top of AI and all those technologies, and it's not even about keeping up. It's understanding how to utilize them. And then how you reconfigure an operation for those new technologies requires very different thinking. And if you don't get that right, you miss massive opportunities, and there are going to be players that will run ahead of you. And that's what we said we couldn't afford. And so, in Base Metals, we're in that same conversation. How do we get that balance right? And we've done our asset review, and the asset review has been really helpful in saying, okay, here's the foundation, here are the foundations. We've got a lot of work to do to get set quite differently. And that's a work in progress.}

_{Theo Yameogo:  Yeah. Okay. I'm cognizant of time and I don't want anybody missing another PDAC event. So, I'm going to start from Paul coming this way, what key message do you want this audience to live with for 2024 until we meet again in PDAC 2025?}

_{Paul Mitchell:  Look, I think, I mean, my message probably hasn't changed for the last ten years. Its collaboration is going to be key to taking this industry forward. Events like this, that I used to avoid, but I realize play a critical role in getting people to talk, in building relationships and in understanding what we're capable of. So, that would be mine. Look for opportunities, participate, challenge yourself, and challenge others as you move forward would be my key message.}

_{Jonathan Price:  From my perspective, I'm not sure there's ever been a more exciting time to be in this industry, given what we have ahead of us here and given the role that we can play, both in decarbonization and in nature and more broadly, through lifting living standards through urbanization. The role that we can play and now the recognition of that role, I think, is something incredible. The onus on us is as an industry is to do more mining than we've ever done before and do it in a more responsible and community centric way than we've ever done before. You know, the key thing is we spoke about before is changing the perception of this industry, getting advocates for this industry, and getting people into this industry. And the onus on us then, is to create an industry in which people want to work and they want to stay. So, things like diversity, equity, inclusion have to be priorities for our companies to create the workplaces that will allow everybody to bring the best of themselves to what we do every day. But, I mean, I couldn't be more excited about where we are today. And it's, you know, it's on us to grasp the nettle here and get on with it.}

_{Mark Cutifani:  Invest in people and make sure that we understand who our audiences are and make sure that we're delivering the right messages. But it's all about people. And if we can get, if we can make sure our conversation’s right, that we've got a workforce that believes in this and that we're doing the right things in terms of being leaders of the industry but supporting them in terms of the work they do on a daily basis and investing in people, then they will help. In fact, they will drive a different story around our industry. And that's the key in my view.}

_{Theo Yameogo:  All right. Very insightful conversation. I'd like the audience to give a round of applause for the panelists, please.}