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Speaker 1: This is Dana Perkins and you're listening to Switched on

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Speaker 1: the BNAF podcast. Which countries in the world are doing

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Speaker 1: the best job of building a secure, reliable and sustainable

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Speaker 1: lithium ion battery supply chain. As we know, lithium ion

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Speaker 1: batteries are an important part of the energy transition. They

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Speaker 1: provide everything from flexibility for wind and solar to the

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Speaker 1: batteries that are found in electric vehicles and so much

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Speaker 1: more so. Earlier this year, BNAF released the fourth edition

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Speaker 1: of our Global Lithium ion Battery Supply Chain Ranking. We

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Speaker 1: rank the top thirty countries using forty six metrics across

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Speaker 1: five categories, and we take into account things like the

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Speaker 1: sourcing of raw materials, battery manufacturing capacity, downstream demand, environmental,

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Speaker 1: social and governance factors as well as innovation. So on

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Speaker 1: today's show we speak with Eli Gomas Calous and Quisiampofo

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Speaker 1: from b and EF's Medals and Mining team, and in

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Speaker 1: addition to the ranking, they get into the last year's

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Speaker 1: collapse of lithium prices as well as the impact that

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Speaker 1: Indonesia has had on the global nickel market. To access

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Speaker 1: this latest edition of the Global Lithium Ion Battery Supply

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Speaker 1: Chain Ranking. B and EF subscribers can find it on

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Speaker 1: b and EF dot com or at BNF on the

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Speaker 1: Bloomberg terminal. Subscribe to the show to receive updates for

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Speaker 1: future episodes, and consider giving us a review to help

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Speaker 1: share us with others. But right now, let's jump into

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Speaker 1: our conversation with Ellie and Quasy. Ellie, thank you for

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Speaker 1: coming back on the show.

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Speaker 2: Thank you for having me again.

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Speaker 1: Dana and Cozy, good to have you here again too.

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Speaker 3: Thank you for having me again, Dana.

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Speaker 1: So we're here today to talk about the Global Lithium

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Speaker 1: ion Battery Supply Chain Ranking, our own version of the

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Speaker 1: OSCARS for metal. So the name is on the tin

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Speaker 1: in that we're talking about the supply chains for all

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Speaker 1: of the things that go into batteries with the metals specifically.

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Speaker 1: But let's just have a moment for talking about who

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Speaker 1: was in the running, who the nominees were for these oscars,

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Speaker 1: if you will. How many countries were we reviewing when

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Speaker 1: we set out to make this ranking.

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Speaker 2: So unlike the Oscars, it wasn't just six, seven or

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Speaker 2: eight nominees. Each year, we look at thirty countries and

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Speaker 2: judge their potential to form a secure, unreliable and sustainable

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Speaker 2: battery supply chain.

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Speaker 1: Now, rather than make everybody wait for us to open

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Speaker 1: the envelope, let's just get right into who the winner

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Speaker 1: was and let me take a guess. Because on this show,

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Speaker 1: the last couple of episodes, we've been talking about China

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Speaker 1: dominating the electric vehicles market and the solar module market.

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Speaker 1: So is it China?

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Speaker 2: No? No?

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Speaker 1: All right? So who? Yeah? Who came out on top?

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Speaker 2: So it's undeniable that China leads the current supply chain.

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Speaker 2: But the purpose of the ranking is to try and

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Speaker 2: understand and see what countries canform supply chains for the future.

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Speaker 2: And with that in mind, Canada actually came out on top.

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Speaker 2: So the difference is with the ranking is that we

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Speaker 2: don't only look at the but we look at the future.

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Speaker 2: So we include two categories ESG Credentials and Industry Innovation

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Speaker 2: and Infrastructure, And the inclusion of these help us look

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Speaker 2: to the future because supply chains will need to be

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Speaker 2: more sustainable as we go towards net zero, and also

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Speaker 2: because demand is going to grow very quickly, so do

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Speaker 2: these countries have the supporting sectors in place to be

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Speaker 2: able to support the growth in supply chains.

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Speaker 1: So let's take a moment on ESG, so environmental, social

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Speaker 1: and governance factors. What do we mean by that in

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Speaker 1: this context because that term gets reapplied to so many things,

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Speaker 1: and we Bloomberg try and have quite a strict definition

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Speaker 1: what does ESG mean for us in this specific context.

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Speaker 2: So in the ranking, we include around ten ESG metrics

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Speaker 2: are split between each of the three sub sectors, and

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Speaker 2: we look at most of the ESG metrics on the

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Speaker 2: country level, so we look at things like carbon pricing,

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Speaker 2: environmental health of their ecosystems, as well as looking at

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Speaker 2: the control of corruption and government effectiveness within the region.

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Speaker 2: So with the rankings, a lot of what we do

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Speaker 2: focuses on the country in that sense.

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Speaker 3: Then also, I think one thing out our day naristat

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Speaker 3: So the methodology overall was developed with the industry. So

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Speaker 3: it's essentially what companies are saying in their boardrooms, what

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Speaker 3: the supply chain industry is discussing. So when we select

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Speaker 3: the criteria, particularly with respect to ESG, it was really

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Speaker 3: dozed at the auto companies as well as the mining

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Speaker 3: companies and governments are talking about that matters to them.

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Speaker 3: In order to dominate the supply chain.

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Speaker 1: Yeah, because we did a previous episode where we were

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Speaker 1: talking about the use of blockchain and verifying minds and

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Speaker 1: some of their social practices. It would kind of go

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Speaker 1: into how they treat workers. So there's a wide basket

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Speaker 1: of things, but a bit specifically related to metals and mining.

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Speaker 1: Here you brought in ten important factors for this industry.

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Speaker 1: So going back to the winner of this particular ranking,

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Speaker 1: which isn't necessarily where the majority of the refining capacity is,

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Speaker 1: but where it comes out on top when we're actually

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Speaker 1: considering some of these different things like ESG. What does

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Speaker 1: it take to come out on top? So you've gone

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Speaker 1: through these various areas that went into the ranking, but

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Speaker 1: essentially where does Canada really excel? Are they across the

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Speaker 1: board or is there one specific area where really kind

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Speaker 1: of set them over the edge.

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Speaker 2: So Canada doesn't actually place in first position across any

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Speaker 2: of the categories that we judge, but what they do

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Speaker 2: do really well is that they have a consistent top

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Speaker 2: ten performance across all of the five key categories, and

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Speaker 2: ensuring that they can perform to a decent and sodid

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Speaker 2: level across various different parts of supply chain has helped

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Speaker 2: them get to first place. This is a fourth edition

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Speaker 2: of the ranking, and what we've seen over the past

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Speaker 2: two is in every single category they've continuously improved. So

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Speaker 2: it's a combination of the consistency across the categories, but

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Speaker 2: also the continuous improvement that has helped them get to

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Speaker 2: where they are today.

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Speaker 1: So they're an all rounder. Well, let's talk a little

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Speaker 1: bit about the different geographic split then, if we will.

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Speaker 1: Among those thirty countries, were they all centered in certain

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Speaker 1: parts of the world or is this some really global

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Speaker 1: supply chain.

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Speaker 3: I think it's very global. One of the key things

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Speaker 3: we should highlight is that we picked thirty countries out

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Speaker 3: of over one hundred and ninety countries. So if you're

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Speaker 3: in this ranking, you're probably already a winner. So I mean,

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Speaker 3: going back to your scarce analogy, you've probably have won

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Speaker 3: award an award in one of the five categories that

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Speaker 3: we mentioned if you're in the top thirty arm In

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Speaker 3: terms of the regional split, we wanted it to be

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Speaker 3: very global. Obviously, you're going to find that in most

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Speaker 3: of pretty much every region around the world. We did

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Speaker 3: include some countries, so they are quite a number of

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Speaker 3: countries in Europe, and for us, a minimum criteria to

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Speaker 3: be part of that top thirty is really to have

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Speaker 3: something going on within one of the criteria that we

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Speaker 3: selected or that we assessed. So Europe would certainly feature

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Speaker 3: quite strongly because they have a lot of battery manufacturing

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Speaker 3: going on. We have North America where Canada, America, Mexico

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Speaker 3: features quite strongly. You've got South America where Chile also

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Speaker 3: features in addition to other countries. Then you go to Asia,

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Speaker 3: you've got the Japan, the China, and then in the

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Speaker 3: Pacific region in Australia as well. So certainly a global benchmark.

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Speaker 3: But then to be included in that top thirty, I

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Speaker 3: think the key criteria is that you need to feature

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Speaker 3: quite strongly in the five areas that we assess, at

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Speaker 3: least one of them.

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Speaker 1: And so since this is the Metals in Mining team,

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Speaker 1: can we talk about raw materials and really what's going

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Speaker 1: on there and where it comes out on top because

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Speaker 1: a lot of our conversations do tend to focus on

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Speaker 1: Africa's in area that has a lot of raw materials

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Speaker 1: that are necessary for the battery supply chain. How is

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Speaker 1: that region faired when we come to the raw material

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Speaker 1: space specifically, so.

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Speaker 2: Actually, in this ranking, Africa is the only region where

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Speaker 2: all the countries that we include in the ranking in

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Speaker 2: this case it's Morocco, Democratic Republic of the Congo DRC

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Speaker 2: and South Africa. Africa's the only region where all these

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Speaker 2: countries have improved in the raw materials category. And we're

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Speaker 2: seeing that as there's a renewed interest in energy transition

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Speaker 2: and metals for the energy transition. Nations in Africa particularly

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Speaker 2: are trying to harness the potential of their critical win reserves,

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Speaker 2: as we've seen other supply chains try to decouple from

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Speaker 2: China there turning to Africa to see if they can

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Speaker 2: use some of their critical minerals there as well.

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Speaker 1: So while we're on the topic of battery metals, let's

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Speaker 1: talk about prices, because that is certainly something our clients

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Speaker 1: on the commodity side are watching closely. And there are

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Speaker 1: two medals that have had on one side of fluctuation

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Speaker 1: on the other side a dip. So let's talk about

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Speaker 1: lithium and nickel, and I know we could spend an

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Speaker 1: entire show talking about each independently, So maybe let's start

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Speaker 1: with lithium. Why the fluctuations and why did the price

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Speaker 1: collapse in twenty twenty three, I.

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Speaker 3: Think disclaim every morning day. Now, the first thing I

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Speaker 3: do is so look at the lithium prices. So certainly

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Speaker 3: you've got me on the right sport. And I think

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Speaker 3: the key thing to understand is there are two factors

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Speaker 3: that drive supply in the market. Okay, Obviously there's a

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Speaker 3: supply and the demand. And for every commodity, if you

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Speaker 3: have more supply than demand, you obviously get price dipping. Okay.

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Speaker 3: And what happened in the lithium market is a few

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Speaker 3: years ago, Batri became the biggest consumer of lithium and

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Speaker 3: we saw battery demand grow, which essentially led to an

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Speaker 3: increased in demand for lithium as well. Supply was very

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Speaker 3: late to the game, so you had a lot of

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Speaker 3: demand with very little supply, and we saw prices go

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Speaker 3: from ten thousand to about eighty thousand in a matter

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Speaker 3: of eighteen months, which is very rare in the commodities market.

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Speaker 3: Right to go times eighteen such a short period. Now,

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Speaker 3: what happened is that once you have a commodity go

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Speaker 3: that high level, two things happen. Everybody now becomes a

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Speaker 3: lithium minor, even my good old friends in Australia who

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Speaker 3: were exploring for gold decided to go for lithium, and

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Speaker 3: now that price point as well. The second thing that

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Speaker 3: happens is that it becomes very easy to develop new

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Speaker 3: technologies to improve assistant processes. So your efficieness has become better,

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Speaker 3: your recoveries become better. So no, I'll think about it.

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Speaker 3: My good old friends in Australia, all of them exploring

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Speaker 3: for gold overnight and technology becoming better to improve recoveries

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Speaker 3: meant that supply really increased significantly within a short period.

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Speaker 3: Now let's go back to the laws of economics. Remember

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Speaker 3: when I said, when there's a lot more demand, we

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Speaker 3: few supply, prices go up. When the revers happen, prices

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Speaker 3: go down. So that's precisely what happened last year, where

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Speaker 3: the technology improvement in China, where there was a certain

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Speaker 3: type of lithium deposit called epidolite, historically had not been

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Speaker 3: able to be mined, but then with higher prices they

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Speaker 3: were able to crack the technology code. And then suddenly

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Speaker 3: China becomes a key producer with all those new projects.

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Speaker 3: Even my home country Ghana discovered lithium and they are

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Speaker 3: on their way to develop it, So that meant that

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Speaker 3: prices came down significantly as a result of a lot

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Speaker 3: more supply coming in at a time where demand was

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Speaker 3: beginning to slow down. That was the story for lithium.

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Speaker 1: But then you note that companies that were mining other

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Speaker 1: things like gold have actually pivoted their businesses. So is

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Speaker 1: this actually had a knock on effect for other commodities

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Speaker 1: and driven prices up as companies have actually switched their

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Speaker 1: attention as opposed to adding additional capacity.

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Speaker 3: I think very minimal in the sense that most of

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Speaker 3: these companies that were exploring have not started producing yet, okay,

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Speaker 3: so their supply had not actually entered the market for

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Speaker 3: it to distort the market if they pivoted away from it.

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Speaker 3: So I think the good for gold producers as well

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Speaker 3: as other commodity producers is that those were early stage

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Speaker 3: exploration projects that's simply pivoted, so their supply never really

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Speaker 3: added onto it. But then what happened with other metals,

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Speaker 3: Obviously the impact will be different, but at least within

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Speaker 3: the context of gold explorers pivoting to lithium, that was

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Speaker 3: very minimal effect on gold and other metals.

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Speaker 1: So after you checked lithium prices and had your morning coffee.

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Speaker 1: Is it on to nickel? And why has nickel been

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Speaker 1: from a pricing standpoint a somewhat similar story. So is

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Speaker 1: the reason behind it? Is it the same?

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Speaker 3: Quite similar? So also you had nickel ten years ago,

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Speaker 3: prices went quite high and then technology played a key role.

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Speaker 3: So back to what I said earlier, at higher prices,

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Speaker 3: new technologists come online. In this case latrites. There are

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Speaker 3: two types of nickel depicits. Obviously, you have what we

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Speaker 3: call the sulfite, which historically had been the dominance nickel source.

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Speaker 3: So you go to countries like Russia, Australia, Canada, you

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Speaker 3: find the sulfit. It's high grade quality, all requires less

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Speaker 3: energy to process. And then there had been historically low

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Speaker 3: grade deposit is that nobody really touched because they were

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Speaker 3: quite expensive to mind. Then the Chinese competition Shan discover

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Speaker 3: the technology where they could actually convert those lattert or

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Speaker 3: into what we call nickel peg ion using steel. So overnight,

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Speaker 3: if you look at the last ten years, Indonesia moved

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Speaker 3: from being an insignificant producer of nickel to the largest

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Speaker 3: within ten years. They're enough for one reason, improvement in

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Speaker 3: technology that made their deposit viable and economic. But here's

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Speaker 3: what has happened over the last two years. Indonesia kept

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Speaker 3: ramping up their production, kept ramping up their supply, and

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Speaker 3: once again they coincided with the period where demand is

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Speaker 3: slowing down, so prices began to fall. But the good

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Speaker 3: news in Indonesia is that they are producing at a

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Speaker 3: very competitive cost, so they don't feel the burniar whereas

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Speaker 3: everyone else or most companies around the world are beginning

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Speaker 3: to feel the impact. Called prices are actually at a

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Speaker 3: point where it's lower than the cost of production. So

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Speaker 3: we've seen glen Core BHB and other major producers in

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Speaker 3: Australia beginning to put their minds into care and maintenance.

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Speaker 3: And when we say care and maintenance, we are not

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Speaker 3: going to produce anymore, but we're just going to maintain

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Speaker 3: those minds. Simply cost prices are lower than your preating costs.

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Speaker 3: But that is not happening in Indonesia.

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Speaker 1: Is it common for a government to get involved in

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Speaker 1: the supply and demand balance to keep prices or to

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Speaker 1: attempt to make prices more stable.

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Speaker 3: So you can do that in the oil industry through

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Speaker 3: a peck in mind. And if you try to influence. Obviously,

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Speaker 3: the EU has the anti trust laws, so two companies

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Speaker 3: cannot speak to each other. So I've got my colleague here. Early,

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Speaker 3: if Ellie was an independent nickel producer and I was

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Speaker 3: an indictdent neickero producer, the EU laws andi trust laws,

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Speaker 3: which enforces competition among companies, prevents us to try to

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Speaker 3: moderate supply in order to influence prices. So the simple

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Speaker 3: answer is no. And because governments don't actually produce these metals,

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Speaker 3: they also don't have direct control over how companies are

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Speaker 3: preid because then it goes against the rules of competition.

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Speaker 3: So that's why it's like, all of a sudden you

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Speaker 3: see everyone pumpinging supply. That leads us to a cliff

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Speaker 3: edge in mining where overnight we wake up and everybody

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Speaker 3: asks what happened simply because all of us we're producer

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Speaker 3: at the same time.

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Speaker 1: Now, as we're talking about these metals, in light of

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Speaker 1: the rankings that we did that focus more on sustainability,

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Speaker 1: this brings us to one of my favorite terms, so

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Speaker 1: hybrid word the green premium together is the greenium. Is

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Speaker 1: there a green premium for essentially those countries at the

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Speaker 1: top of this ranking, are they selling their products at

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Speaker 1: a higher price because the buyers, well not all of them,

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Speaker 1: but some are looking more seriously at sustainability metrics.

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Speaker 3: It's always a hard one, right. So the mining industry

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Speaker 3: is one of the most unique industries in the world. Okay,

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Speaker 3: so mining industry has what we call price takus in

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Speaker 3: most other industries. So let's take the phone industry. If

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Speaker 3: some song or Apple produces a phone today, they actually

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Speaker 3: decide how much they want to sell it. If Timcook

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Speaker 3: came out with a new iPhone, he decides that I'm

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Speaker 3: going to sell this a thousand, three hundred because my

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Speaker 3: cost was whatever plus my margin. In mining, mining companies

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Speaker 3: won't have that luxury. They take whatever price and market decide,

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Speaker 3: so that premium would have to come from the market.

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Speaker 3: And now you need to understand how prices are set.

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Speaker 3: So most prices it's either through benchmark or through exchanges.

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Speaker 3: If you look at the current structure of the exchanges

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Speaker 3: where the prices are discovered, there's very little room for

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Speaker 3: them to actually have what we call it the word grimium.

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Speaker 3: I'm going to seal that by the way there now,

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Speaker 3: there's very little room for them to actually put on

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Speaker 3: a premium because there's no structure to incentiviize. Prices are

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Speaker 3: set at the macro level, not based on company. Now,

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Speaker 3: the assumption is that companies can decide to go into

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Speaker 3: bilateral agreements. Okay, so myself and Elie can decide that

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Speaker 3: you produce the green to kill for me, I would

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Speaker 3: pay it at an extra dollar because I want to

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Speaker 3: reach my zero target faster than my competitors. But then

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Speaker 3: the key thing is that you need to understand where

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Speaker 3: the EV industry is. Every EV company is looking at

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Speaker 3: improving its margins to break into profitability by reducing its costs.

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Speaker 3: So at the moment, premium is not something any EVA

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Speaker 3: company is willing to put on its costs given where

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Speaker 3: we want to go with evs to increase the adoption,

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Speaker 3: so green permium. Two things I want to end with

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Speaker 3: on this question is that one, it will be difficult

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Speaker 3: in the current structure of the exchanges where prices are

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Speaker 3: discovered for there to be a premium in the market.

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Speaker 3: But then secondly, what companies or to companies actually be

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Speaker 3: willing to pay for green premiums. That will be hard

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Speaker 3: because all of them are trying to reduce costs in

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Speaker 3: order to improve the margins. Of the electric vehicle production

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Speaker 3: to maximize their profit.

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Speaker 1: So perhaps as learning rates improve and electric vehicles become

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Speaker 1: more price competitive with internal combustion engine vehicles, which we

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Speaker 1: are seeing happen, and we do have forecasts that actually

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Speaker 1: think about when that's actually going to be, which is

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Speaker 1: not too far away, then it becomes maybe potentially a

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Speaker 1: bigger factor in the future, and this ranking maybe it'll

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Speaker 1: go precisely.

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Speaker 3: But then there's actually a plot twist, right. One thing

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Speaker 3: I left out is policy. So look at the impact

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Speaker 3: of Seabama as an example. So the Seabama I mean

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Speaker 3: the carbon boder adjustment mechanism the European Union introduce, And

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Speaker 3: what that means is that if you're a seal or

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Speaker 3: aluminum important in the EU and you decide to import

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Speaker 3: from a country whose emissions standards is not equivalent to

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Speaker 3: what you have in the EU, you pay a premium

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Speaker 3: on top of that, right or you pay a charge

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Speaker 3: based on where the prices. So similarly, the EU is

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Speaker 3: trying to introduce the battery passport. So what's going to

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Speaker 3: happen is that the EU is hoping to track the

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Speaker 3: emissions profile of auto companies in the EU. So if

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Speaker 3: you don't want to pay that penalty, which is aligned

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Speaker 3: with the carbon price. Then the good thing is that

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Speaker 3: you go to the producers that produce the good stuff.

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Speaker 3: And because everybody will be going to the producers that

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Speaker 3: produce a lower emission nickel, that is where we think

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Speaker 3: that obviously there might be a potential premium attach touced

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Speaker 3: producers doing it in low emissions profile. So yes, character

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Speaker 3: and stick. I think that one's a big stick, particularly

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Speaker 3: from the EU is enforced. There's a probability that companies

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Speaker 3: would have no option than to offer premiums in order

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Speaker 3: to get access to the low emission stuff.

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Speaker 1: So now we've entered our let's predict the future part

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Speaker 1: of the podcast, which always seems to come at some

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Speaker 1: point in the show when it comes to these different

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Speaker 1: well nickel and lithium specifically, do we expect twenty twenty

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Speaker 1: four to be a more stable year depends.

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Speaker 3: On what world leaders have for coughing the more. But

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Speaker 3: then what I tend to realize the near term price

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Speaker 3: movement is mostly based on geopolitics, which is number one.

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Speaker 3: A classic example is Russia is a major producer of nickel,

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Speaker 3: so nichol is actually the only metal that has class

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Speaker 3: class in the sense that there are two types of nickel,

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Speaker 3: the Class one, which is a high priority stuff used

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Speaker 3: in battery manufacturing, and then the Class two, which is

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Speaker 3: used for seal steel production. So Russia is a key

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Speaker 3: produce of Class one, and if America or any other

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Speaker 3: country for that matter, decides to impose assanction on Russia's nickel,

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Speaker 3: that certainly would move the market and unfortunately not make

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Speaker 3: it a stable yet. So I think that's one. But

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Speaker 3: then burying all these assumptions and geopolitical impact, we do

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Speaker 3: think that we expect recovery in the market because we

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Speaker 3: are seeing that companies are increasingly beginning to shut down supply.

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Speaker 3: And then, if we go back to the economics one

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Speaker 3: O one that I mentioned, when supply finally is lower

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Speaker 3: than demand, or let me say, when demand finally exceeds supply,

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Speaker 3: what you see is that prices begin to recover. So

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Speaker 3: as more companies furlow or put their operations into care men,

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Speaker 3: if it tips to skill to the point where supply

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Speaker 3: becomes less than demand, we think that prices will recover.

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Speaker 3: But overall our view is that that recovery would not

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Speaker 3: be significant compared to the drop we saw last year.

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Speaker 1: So we've spent a lot of time talking about countries,

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Speaker 1: and invariably this is a really important policy discussion. As

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Speaker 1: you've pointed out, Quazy, Let's talk a second about the

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Speaker 1: companies involved here. What are some of the bigger companies

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Speaker 1: and is that actively shifting. Are there new entrants in

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Speaker 1: this market or is it really the same companies that

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Speaker 1: have always been in the space.

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Speaker 2: As Quzy mentioned earlier, we're seeing companies expand into different

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Speaker 2: metals and into new portfolios. But in the terms of lithium,

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Speaker 2: for example, we've seen that there's top five producers standing

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Speaker 2: firm in their position, for example Alba Marley, SQM, gan

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Speaker 2: Feng in China. But as people are recognizing the potential

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Speaker 2: and opportunity that comes with these energy transition metals, companies

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Speaker 2: from sectors aren't necessarily in the metal space are getting involved.

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Speaker 2: And a perfect example of that is in the in

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Speaker 2: gas space, where we're seeing Exon Mobile planning to produce

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Speaker 2: lithium by twenty twenty seven and people probably thinking like

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Speaker 2: why is this happening? How does this actually work in practice?

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Speaker 2: But interestingly, there's actually a lot of synergy between the

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Speaker 2: production of oil from oil fields and the production of

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Speaker 2: lithium from Brian, so a lot of the expertise and

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Speaker 2: equipment that is already existingly used in oil and gas

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Speaker 2: can also transfer over to lithium, which is great as

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Speaker 2: we're seeing these companies trying to take advantage of what

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Speaker 2: they have already in place.

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Speaker 3: Even in the lithium space as well, we've seen battery

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Speaker 3: manufacturers actually also go all the way upstream. So c

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Speaker 3: ATL has concessions where they're actually mining lithium mum as

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Speaker 3: we speak now, they've taken equity in our Congolese coboar

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Speaker 3: to mine.

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Speaker 1: Given.

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Speaker 3: One example that would actually surprise you, danais GM General

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Speaker 3: Motor Zeroto Company has actually gone into take equity in

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Speaker 3: a mining company. And look, I'm not all but then

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Speaker 3: I know that the last time an auto company took

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Speaker 3: equity in a mining company was the days of Henry Ford.

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Speaker 3: So simple terms, yes, companies that are actually making entrant

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Speaker 3: and dominating the supply chain is actually evolving similar to

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Speaker 3: what we are seeing in steel, and there a whole

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Speaker 3: lot of reasons we can talk about. One other reason

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Speaker 3: why we are seeing that shifting companies coming from different

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Speaker 3: places into the mining industry is the fact that people

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Speaker 3: have realized that there's a probability that there would not

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Speaker 3: be enough for all of them. That's one second. People

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Speaker 3: have realized that there's a probability that the good stuff

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Speaker 3: from a sustainable or ESG perspective might not be enough

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Speaker 3: for all of them. So, rather than adopt the historical

438
00:21:35,119 --> 00:21:38,159
Speaker 3: supply chain strategy of just in time, and by just

439
00:21:38,200 --> 00:21:40,840
Speaker 3: in time, auto companies historically don't want to commit to

440
00:21:40,920 --> 00:21:43,080
Speaker 3: more than teddy days or sixty days of inventory is

441
00:21:43,080 --> 00:21:44,919
Speaker 3: we're just going to wait to factor gator and deliver.

442
00:21:45,040 --> 00:21:47,280
Speaker 3: They realize that, look, if we don't go out there

443
00:21:47,600 --> 00:21:50,840
Speaker 3: and help these miners or even become minus like Tesla

444
00:21:50,960 --> 00:21:53,200
Speaker 3: Annow's a few years ago, there might not be enough

445
00:21:53,240 --> 00:21:55,919
Speaker 3: for us. So you're absolutely right. The companies in the

446
00:21:55,960 --> 00:21:58,879
Speaker 3: mix that are dominating the industry are gradually shifting, and

447
00:21:58,920 --> 00:22:01,720
Speaker 3: I'm quite interested in what that list would look like

448
00:22:01,800 --> 00:22:02,760
Speaker 3: by twenty thirty.

449
00:22:02,840 --> 00:22:04,600
Speaker 2: Who knows now, And I was going to say, we've

450
00:22:04,640 --> 00:22:06,960
Speaker 2: seen this early move approach be so successful on a

451
00:22:07,000 --> 00:22:09,320
Speaker 2: country level. That's the reason why China dominates a supply

452
00:22:09,440 --> 00:22:11,679
Speaker 2: chain today. So what these companies are trying to do

453
00:22:11,720 --> 00:22:14,159
Speaker 2: is replicate that on a more granular level. To ensure

454
00:22:14,160 --> 00:22:16,199
Speaker 2: that they can be the leaders in the market that

455
00:22:16,240 --> 00:22:16,760
Speaker 2: they want to be.

456
00:22:17,040 --> 00:22:19,359
Speaker 1: So we've got a diverse set of companies and a

457
00:22:19,400 --> 00:22:22,119
Speaker 1: diverse set of countries in this ranking. How do we

458
00:22:22,160 --> 00:22:25,480
Speaker 1: compare apples to apples, Because this seems like it's a

459
00:22:25,600 --> 00:22:28,159
Speaker 1: pretty diverse set of things that we're going to have

460
00:22:28,240 --> 00:22:29,800
Speaker 1: to look at. I mean, how do you do this

461
00:22:29,840 --> 00:22:31,160
Speaker 1: from a methodology standpoint?

462
00:22:31,480 --> 00:22:33,399
Speaker 3: So i'dan, I don't know if you want us to

463
00:22:33,520 --> 00:22:36,720
Speaker 3: release the BNF secrete sauce of comparing level, but look,

464
00:22:36,760 --> 00:22:38,639
Speaker 3: I think it's that's a hard part of what we

465
00:22:38,680 --> 00:22:41,919
Speaker 3: do with these rankings because obviously you've got other micro

466
00:22:42,080 --> 00:22:46,159
Speaker 3: level of companies. Even within companies, different minds or different

467
00:22:46,200 --> 00:22:49,719
Speaker 3: projects have different metrics, right, So I think it's important

468
00:22:49,760 --> 00:22:53,119
Speaker 3: for us to first of all set that benchmark, so

469
00:22:53,160 --> 00:22:56,080
Speaker 3: we go into details. If you take an example, their missions.

470
00:22:56,119 --> 00:22:59,440
Speaker 3: So fortunately BEINGF has this really good climate scope is

471
00:22:59,480 --> 00:23:02,879
Speaker 3: an example. All Climoscope is one of our big research

472
00:23:03,160 --> 00:23:05,200
Speaker 3: pieces we put out every year where we sort of

473
00:23:05,320 --> 00:23:07,600
Speaker 3: rank countries and the progress they are making in the

474
00:23:07,680 --> 00:23:11,120
Speaker 3: renewable energy space, whether policy or capacity build. So for us,

475
00:23:11,160 --> 00:23:14,240
Speaker 3: these are in house methodologies that we've built that have

476
00:23:14,680 --> 00:23:18,879
Speaker 3: to standardize what countries are doing within the renewable energy space,

477
00:23:19,080 --> 00:23:21,400
Speaker 3: which sort of makes our life easy because we don't

478
00:23:21,400 --> 00:23:23,639
Speaker 3: have to reinvent the wheelders. So that's an example the

479
00:23:23,680 --> 00:23:26,439
Speaker 3: fact that we have in house benchmarks we've developed that

480
00:23:26,600 --> 00:23:29,639
Speaker 3: helps us to compare these countries in other areas as well.

481
00:23:30,000 --> 00:23:33,920
Speaker 3: It's also important that for us having that benchmark that

482
00:23:34,040 --> 00:23:36,760
Speaker 3: all other countries input aligns with.

483
00:23:37,240 --> 00:23:40,000
Speaker 1: Is it a pretty tight race between those thirty countries

484
00:23:40,040 --> 00:23:43,160
Speaker 1: that we were evaluating or is there a big gap

485
00:23:43,200 --> 00:23:45,119
Speaker 1: between Canada and everybody else.

486
00:23:45,520 --> 00:23:47,800
Speaker 2: There's a big gap. And what we've seen as the

487
00:23:47,880 --> 00:23:50,440
Speaker 2: rankings have gone on is countries are starting to form

488
00:23:50,520 --> 00:23:54,040
Speaker 2: into clusters. So we've seen at the top the countries

489
00:23:54,040 --> 00:23:57,520
Speaker 2: that have the clear policy commitments, have the ambitions in place,

490
00:23:57,560 --> 00:24:00,560
Speaker 2: and are actually getting to the implementation stage. We've seen

491
00:24:00,560 --> 00:24:03,520
Speaker 2: at the bottom of the countries such as Bolivia, DRC

492
00:24:04,119 --> 00:24:08,560
Speaker 2: and Argentina that have raw materials to a certain extent,

493
00:24:08,680 --> 00:24:12,120
Speaker 2: but aren't necessarily capitalizing it across the whole supply chain,

494
00:24:12,160 --> 00:24:14,720
Speaker 2: so they're just sitting within their strength and not developing

495
00:24:14,760 --> 00:24:16,639
Speaker 2: as much as they could. And then we have the

496
00:24:16,680 --> 00:24:19,400
Speaker 2: middle round, which involves a lot of the Southeast Asian

497
00:24:19,440 --> 00:24:22,920
Speaker 2: countries actually, such as Indonesia and India, that are trying

498
00:24:22,960 --> 00:24:25,879
Speaker 2: to make the next step to success. So we've seen

499
00:24:25,960 --> 00:24:29,160
Speaker 2: Indonesia build their nickel market, but now it's how can

500
00:24:29,200 --> 00:24:32,960
Speaker 2: they use that nickel market to try and attract manufacturing investment,

501
00:24:33,080 --> 00:24:35,080
Speaker 2: And that's at the stage r at the moment, trying

502
00:24:35,080 --> 00:24:38,000
Speaker 2: to get to the next step in building the supply chain.

503
00:24:38,320 --> 00:24:41,200
Speaker 3: Adding what too Early said, this is a unique ranking

504
00:24:41,280 --> 00:24:43,560
Speaker 3: where it'll only get lonely at the top four one year.

505
00:24:43,640 --> 00:24:47,600
Speaker 3: Because us early mentioned the competition really horisen. Never in

506
00:24:47,600 --> 00:24:49,960
Speaker 3: my wild as imagination when we started as four years

507
00:24:49,960 --> 00:24:52,960
Speaker 3: ago did I think that Canada would become first down

508
00:24:53,000 --> 00:24:55,680
Speaker 3: the line, right, So the competition is quite high. If

509
00:24:55,720 --> 00:24:58,520
Speaker 3: you look at the earlier IT creations of the ARM

510
00:24:58,560 --> 00:25:01,639
Speaker 3: rankings that we did back I remember vividly when we

511
00:25:01,720 --> 00:25:04,240
Speaker 3: did the first one, the difference between China and the

512
00:25:04,280 --> 00:25:07,840
Speaker 3: second country was very significant. And then last year you had,

513
00:25:07,920 --> 00:25:10,879
Speaker 3: for example, the Inflation Redaction Act and you can see

514
00:25:10,960 --> 00:25:14,240
Speaker 3: that instantly it puts America in the game as well.

515
00:25:14,280 --> 00:25:16,320
Speaker 3: And then the EU came with this Green Deal and

516
00:25:16,359 --> 00:25:19,640
Speaker 3: it also helped propel countries like Germany, Okay, and then

517
00:25:19,720 --> 00:25:22,720
Speaker 3: you look at a country like Elie mentioned Indonesia, where

518
00:25:22,800 --> 00:25:26,320
Speaker 3: a few years ago in nickel class one refinery, China

519
00:25:26,440 --> 00:25:29,000
Speaker 3: was number one. This year, according to being a forecast,

520
00:25:29,080 --> 00:25:32,760
Speaker 3: Indonesia is likely to overtake China in the refinery of

521
00:25:33,000 --> 00:25:38,080
Speaker 3: nickel soffet used in batteries. So it's important to realize that.

522
00:25:38,119 --> 00:25:40,240
Speaker 3: I think the key thing is that, yes, you can

523
00:25:40,280 --> 00:25:43,120
Speaker 3: win today, but then it's very very difficult. With the

524
00:25:43,160 --> 00:25:46,080
Speaker 3: pace of growth we've seen in countries like Germany, in

525
00:25:46,119 --> 00:25:49,400
Speaker 3: countries like the United States, and then in countries like Canada,

526
00:25:49,600 --> 00:25:53,119
Speaker 3: it becomes unpredictable who's going to be first in subsequent

527
00:25:53,320 --> 00:25:54,280
Speaker 3: editions of the ranking.

528
00:25:54,680 --> 00:25:56,919
Speaker 1: So, Elie, you'd mentioned those in the middle of the

529
00:25:57,000 --> 00:26:01,679
Speaker 1: ranking are potentially striving to raise higher. Maybe they're not

530
00:26:01,720 --> 00:26:04,520
Speaker 1: looking at this ranking specifically is their aim, but they're

531
00:26:04,520 --> 00:26:07,720
Speaker 1: certainly looking at their sustainability credentials. And what I want

532
00:26:07,800 --> 00:26:09,520
Speaker 1: to know is what's going to take to actually rise

533
00:26:09,520 --> 00:26:11,879
Speaker 1: in that ranking, and which countries are thinking about it

534
00:26:11,920 --> 00:26:14,320
Speaker 1: and how are they going about it or maybe even

535
00:26:14,359 --> 00:26:18,200
Speaker 1: a playbook. I mean, basically, how are countries approaching improving

536
00:26:18,359 --> 00:26:19,080
Speaker 1: in this ranking.

537
00:26:19,400 --> 00:26:21,960
Speaker 2: So what we've seen successful for lots of regions is

538
00:26:22,160 --> 00:26:25,240
Speaker 2: they've capitalized on their strength to help build out other

539
00:26:25,280 --> 00:26:28,040
Speaker 2: parts of the supply chain, and we're seeing that approach

540
00:26:28,080 --> 00:26:30,560
Speaker 2: being used again and again by regions that are striving

541
00:26:30,600 --> 00:26:32,840
Speaker 2: to improve. So if you take Africa, that's a really

542
00:26:32,880 --> 00:26:35,120
Speaker 2: good example because as you mentioned earlier, they're the only

543
00:26:35,160 --> 00:26:38,320
Speaker 2: region that is improved across the raw materials sector, but

544
00:26:38,440 --> 00:26:41,600
Speaker 2: actually in the overall ranking they still sit pretty low.

545
00:26:41,800 --> 00:26:45,600
Speaker 2: And we as BNF had opportunity to visit South Africa

546
00:26:45,760 --> 00:26:47,760
Speaker 2: for the BNF Forum in Cape Town and we had

547
00:26:47,760 --> 00:26:51,359
Speaker 2: a discussion about how we could harness the critical murial's

548
00:26:51,400 --> 00:26:54,880
Speaker 2: potential in Africa to ensure this foundation for growth can

549
00:26:54,920 --> 00:26:57,399
Speaker 2: be made. And what we found is that in Africa,

550
00:26:57,480 --> 00:27:00,320
Speaker 2: for example, they are established in the mining sector. South

551
00:27:00,359 --> 00:27:03,639
Speaker 2: Africa's the top producer of minds manganese DRC takes the

552
00:27:03,720 --> 00:27:06,000
Speaker 2: larger share of the mind's cobalt supply in the world,

553
00:27:06,119 --> 00:27:08,760
Speaker 2: but it stops at mind supply. And what Africa trying

554
00:27:08,800 --> 00:27:10,639
Speaker 2: to do and need to do is actually harness the

555
00:27:10,720 --> 00:27:14,359
Speaker 2: critical minerals potential to be able to move further downstream

556
00:27:14,440 --> 00:27:17,560
Speaker 2: in the raw materials value chain, so actually take part

557
00:27:17,640 --> 00:27:21,280
Speaker 2: in the value adding activity which can bring more development

558
00:27:21,359 --> 00:27:24,840
Speaker 2: and economic benefit to the region so they can build

559
00:27:24,960 --> 00:27:27,600
Speaker 2: further down the supply chain. There are of course challenges

560
00:27:27,640 --> 00:27:29,680
Speaker 2: to that, and what the report hired is that there's

561
00:27:29,760 --> 00:27:31,879
Speaker 2: been progressed, but actually there's a real long way to

562
00:27:31,920 --> 00:27:35,280
Speaker 2: go for Africa still and focusing on specific areas is

563
00:27:35,320 --> 00:27:38,280
Speaker 2: important to ensure that Africa can become a supply chain

564
00:27:38,280 --> 00:27:38,840
Speaker 2: for the future.

565
00:27:39,119 --> 00:27:40,840
Speaker 3: I think Dana can I can talk about some of

566
00:27:40,840 --> 00:27:44,119
Speaker 3: these specific points that we highlighted the and the report

567
00:27:44,200 --> 00:27:47,320
Speaker 3: in how Africa can improve its critical mineral's potential, And

568
00:27:47,440 --> 00:27:50,560
Speaker 3: one was obviously sustainability and as you know, are being

569
00:27:50,600 --> 00:27:52,520
Speaker 3: there for something that is important to us. But it's

570
00:27:52,560 --> 00:27:55,119
Speaker 3: not just we have benf Also the wider industry is

571
00:27:55,160 --> 00:27:57,879
Speaker 3: beginning to look into how can mines be more sustainable though,

572
00:27:57,960 --> 00:28:00,000
Speaker 3: so one way where if you look at South Africa's

573
00:28:00,000 --> 00:28:02,160
Speaker 3: South Africa has one of the highest CEO or two

574
00:28:02,240 --> 00:28:04,800
Speaker 3: emissions on its grid, so that doesn't help really well

575
00:28:04,840 --> 00:28:07,800
Speaker 3: if Africa wants to be the raw material producer of

576
00:28:07,880 --> 00:28:10,800
Speaker 3: the future. Another area is also good governance. So there

577
00:28:10,800 --> 00:28:13,000
Speaker 3: were instances where if you look at the country like

578
00:28:13,040 --> 00:28:15,640
Speaker 3: the Democratic Republic of Congo a few years ago, I'm

579
00:28:15,680 --> 00:28:18,479
Speaker 3: net International that a report and talked about how there

580
00:28:18,480 --> 00:28:21,560
Speaker 3: were incidents of corruption and also human rights abuses in

581
00:28:21,600 --> 00:28:24,679
Speaker 3: the minding value chain, particularly at the atis now illegal

582
00:28:24,760 --> 00:28:27,560
Speaker 3: atismal small skill level. So that's also one thing where

583
00:28:27,600 --> 00:28:30,359
Speaker 3: the reporter highlighted that good governance will certainly go a

584
00:28:30,359 --> 00:28:34,000
Speaker 3: long way into making Africa the important region to produce

585
00:28:34,000 --> 00:28:36,760
Speaker 3: a raw materials we need for the transition. Financing was

586
00:28:36,800 --> 00:28:39,640
Speaker 3: also part of it, right because most companies for most

587
00:28:39,640 --> 00:28:43,280
Speaker 3: countries are not able to transform the amnial resources into

588
00:28:43,400 --> 00:28:46,080
Speaker 3: value art products which would improve the ascores on the

589
00:28:46,160 --> 00:28:49,440
Speaker 3: ranking simply because they are not getting access to financing,

590
00:28:49,560 --> 00:28:52,080
Speaker 3: and we ded touch on the important factors that is

591
00:28:52,120 --> 00:28:55,360
Speaker 3: needed to ensure that these projects get the much needed financing.

592
00:28:55,520 --> 00:28:58,320
Speaker 3: Another important thing is the one thing that most people

593
00:28:58,400 --> 00:29:00,320
Speaker 3: don't know is I started my care We are in

594
00:29:00,360 --> 00:29:03,640
Speaker 3: a university, so skill set mutchs a lot to me.

595
00:29:03,840 --> 00:29:07,000
Speaker 3: And it's important that one of the challenges we put

596
00:29:07,080 --> 00:29:09,480
Speaker 3: to the people around the round table was the fact

597
00:29:09,480 --> 00:29:12,560
Speaker 3: that how many universities are actually offering a cross in

598
00:29:12,640 --> 00:29:16,040
Speaker 3: battery management or battery engineering or call it whatever, right,

599
00:29:16,120 --> 00:29:19,840
Speaker 3: So it's important that countries regions can be passionate about

600
00:29:19,880 --> 00:29:24,520
Speaker 3: the transition, but without preparing the workforce of the future today,

601
00:29:24,680 --> 00:29:28,640
Speaker 3: it becomes practically impossible to play any key role in there,

602
00:29:28,720 --> 00:29:30,560
Speaker 3: and a host of other factors as well. And I

603
00:29:30,600 --> 00:29:35,040
Speaker 3: believe once African countries, particularly in this ranking, are able

604
00:29:35,040 --> 00:29:37,880
Speaker 3: to address these, are pretty sure that the rankings under

605
00:29:37,960 --> 00:29:39,920
Speaker 3: line might look different from what it is today.

606
00:29:40,400 --> 00:29:43,040
Speaker 1: Well, Quezy Ellie, thank you so much for coming on

607
00:29:43,080 --> 00:29:45,240
Speaker 1: the show today, sharing the rankings and just some of

608
00:29:45,240 --> 00:29:47,680
Speaker 1: the really interesting things that are happening in metals and

609
00:29:47,720 --> 00:29:48,440
Speaker 1: mining at the moment.

610
00:29:48,800 --> 00:29:49,720
Speaker 3: Thank you for having us.

611
00:29:49,920 --> 00:29:50,600
Speaker 2: Thanks Daniel.

612
00:29:59,560 --> 00:30:02,920
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