Eoin Treacy's view

I posted the first part of this update on Wednesday and saved the second part of today. The number one theme in emerging markets is governance. That’s where Saudi Arabia is clearly attempting to make an impression.

In speaking with the junior minister for investment, the decision to give opportunities to young people is very intentional. They know the only way to achieve the progress they need is through harnessing the productive capacity and thirst for invention of the young.

It’s incredibly refreshing to meet so many tenacious young people with ambitious dreams for the future. The fact they have a route to achieve their goals is even better.
Several large miners are now active in the region and Ma’aden is increasing its footprint across the product space. There is a strong feeling that officials are waiting for Lucid Group to announce a production facility in Saudi Arabia before they confirm the scale of the country’s lithium resource.

There is also a clear national independence trend underway. That stretches from building its own vehicles to coffee roasting, chocolate manufacturing and building a nascent tourist business. Ultimately, the biggest question is whether Saudi Arabia will accept renminbi for oil.
That Renminbi is strengthening in a big way and that may be aimed at demonstrating the government will do what is necessary to stabilise the currency so it is a viable medium of international exchange. Saudi’s sovereign wealth funds are already very active in China so the groundwork for a petro-renminbi is being laid.

I have the pleasure of meeting with Sean Sargent, CEO of Green Lithium, in the UK. They plan to build a green lithium production facility in the UK to supply the EU battery market. It needs a price of $25000 for lithium to be profitable. With prices at multiples of that level and the EU’s emissions regime gaining sway, the venture has potential to be successful.

My heckles rise at the thought of carbon intensity shaping economic decisions. I can’t see how choosing to rely on less efficient production will deliver better investment results over the long term. However, governments don’t listen to people like me.
Meanwhile, uranium is no brainer. It works and is carbon-free. I spoke with the CEO of Goviex. They are developing a uranium mine next door to the old Areva facilities in Niger. The share is currently firming from the region of the 200-day MA in line with the wider uranium sector. What I found most interesting about Sean Sargent’s story is he chose to leave the nuclear sector for lithium because had lost hope it would ever improve.
Doosan Enerbility is the global leader in building small modular reactors.

I was the CES convention a few years ago and it was dominated by drone companies. That trend has found its way into the mining sector. I talked with the CFO or Off World. They are developing a mining robot designed to operate autonomously and relies on batteries. Many mines are installing renewable energy to reduce their carbon footprint so there is scope for solar to power battery-operated machines too. I don’t buy the sales pitch around totally removing people from the mine face but autonomous machinery will certainly improve efficiencies.

I also had the pleasure of speaking with one of the Australian green hydrogen panelists. The failure of Sun Cable this week was topical. Ambitious plans for several thousand-mile subsea cables were promoted last year with little concern for the technical and security challenges involved. This is one more vote in favour of nuclear.

I also spoke at length with Bill Brodie, the recently departed CEO of Alien Metals. He is getting back to his roots as an explorer but remains an unrepentant bull of the quality of the iron-ore resource Alien Metals is developing. The share is depressed but improving.

I also chatted with GeoDrill’s Executive General Manager. They are busy and having difficulty keeping up with business as contract drillers with a focus on Africa. The share is on the cusp of completing a lengthy range.