Project Stages

Stock Exchange

Register to access content

If you already have an account please log in.

By registering my information with the Beacon Events I recognise that I may receive information and updates around other related mining and mining investment events managed by Beacon Events.

The content you are trying to access is for registered users only

Click here to register your account.

NOTE: You will need to register with the same email address that you used when registering for the event to receive access.

Already have an account? Click here to log in.

The content you are trying to access is for authorised users only

NOTE: You will need to have registered with the same email address that you used when registering for the event to receive access.

Please use a different account to access this content.

Critical mining juncture: A conversation with Mark Cutifani

  • 28 June 2024

Respected mining industry leader Mark Cutifani will be among the keynote speakers at this year’s Resourcing Tomorrow 2024 conference in London. Beacon editorial director Richard Roberts speaks with him about key event themes and the conversations miners need to have.

Richard Roberts: Mark Cutifani, it’s great to speak with you again.

Resourcing Tomorrow 2024 is bringing in a lot more divergent views on mining and its future role in industry and society. Breaking out of the echo chamber is a catchphrase that's being used this year. To me this seems like a conversation you’ve been leading for more than a decade. When I think about secondary and tertiary enrolments and graduate levels around the world, and things like project approval times, which seem to be getting longer, not shorter, etc …. Is it too late for miners, or mining, to be having this conversation now?

Mark Cutifani: No, it’s never too late. Very simply put, miners will continue to have a critical role in the economy. We produce everything. Everything comes from the Earth. We don't create matter, matter comes from the Earth. And we're the key players in terms of making sure the raw materials, for everything, come from our industry.

But we don't explain what we do very well and we need to explain it better to get the support for the developments that we'd like to make. People are only just starting to work that out.

And I think the critical resource conversation around transition metals, or the whole energy transformation, is an opportunity for the industry to reinforce its role in ways that are much more visible to community. I think we can make that a very positive conversation.

But as you say, ever since I've been in the industry, I started as a kid at Coalcliff (in New South Wales, Australia) … When I had my first general manager's job at CRA the guys said to me in my coaching on PR, you’re in the mining industry, keep your head down, don't say anything and hope that nobody sees or gets too interested in what you're actually doing. That world has changed and I think we're trying to lead a different dialogue. But that takes a lot of work.

Richard Roberts: How good industry are events such as these typically at sort of achieving that: Breaking out of the echo chamber? Changing the conversation internally such that it starts to change the perceptions of the industry externally?

Mark Cutifani: Well, it's a tough change. It’s a big change, particularly for an industry that uses a lot of capital, impacts communities – and we need to acknowledge those impacts – and an industry that has to really be on the front end of change. It's an uncomfortable place to be. And in my experience over 47 years I've found that engaging with people, talking through the issues, helping people understand what you do, and what you can do, and how you can be a partner in those communities, is a far more effective way of getting support for your projects than pretending that you're not there and that you’re not going to do anything. People know that's not right. But when you engage them, you have open and honest dialogues, I think it's a very different conversation. Or it has been over my 47 years. And that's a personal experience.

That’s something that, I guess, in the last 10-to-15 years, I've been saying more about in most public forums.

Richard Roberts: We’ve talked about critical minerals and the timing of this amplification ... Is now as good a time as any, or perhaps the most important time of all, to be amplifying this conversation?

Mark Cutifani: I think climate change has provided, or is, an existential threat.

Despite what some may think the bulk of scientific evidence suggests that we need to do something, and whilst I'm not going to get drawn in debates on whether you can make a difference, the science suggests we can make a difference in terms of the incremental load of CO2 in the atmosphere and in my view we should do everything we can.

I’ve got seven kids. I’d like the world to be a better place for them and at the moment, the way things are shaping up, that’s not a legacy I'm likely to leave. I’d like to think that I can do everything I can before I toss off this mortal coil to make the planet a better place. And I think the industry has a significant contribution to make.

But we've got to be open. We've got to be honest. We've got to deal with those that are most affected by our business in a fair and effective way. And one that society understands needs to be done as well. And don't think local communities are terribly well looked after in terms of the processes. And that's not simply something for the mining industry. That’s a broader society question that I think we need to work with and understand to make sure we give people a better deal.

Richard Roberts: You spoke at the UK Mining Conference at Cornwall earlier this month. The Woodsmith polyhalite fertiliser project in the UK has been topical. It's a major project; it’s a project that has a part to play in regional, if not broader, food security. But it has challenges to overcome over and above the standard marketing, economic and other hurdles these major projects have to overcome. That seems to be emblematic of mining’s broader challenges. What do you see as the three biggest challenges – or opportunities – for miners now?

Mark Cutifani: Look, I won’t make specific comments on Woodsmith per se, but what I would say is that it is a project that, along with other similar projects, has a significant contribution to make to solve a critical problem. The world has a food problem; a nutrition problem.

Today, without fertilisers, we can only feed half the planet, literally. So those talking about banning fertilisers really don't understand what they’re saying. As I said to one person who suggested fertilisers should be banned: can you tell me which half of the population you’re now going to starve?

When you look at the consequences of those sorts of things it changes the nature of the debate.

Once we get that debate sorted then I think we can have sensible conversations about where we should commit investment, how we should develop things and how we could do a better job as an industry in developing those resources.

Our local communities are the ones that are most affected. Somebody asked me, why have you gone to the Cornwall conference in the UK? I said, well, isn’t that, as leaders in the industry, what we should be doing? Talking at local forums, supporting our local industry; supporting the local debates.

And why doesn’t the UK have as important a role as anyone else across the globe in making sure that we've got the minerals to support improving the planet?

More broadly, in terms of opportunities, I think the most important opportunity is to engage stakeholders, and I’m saying that in the broadest sense of the word – in terms of helping them understand the role of mining in society, and why it’s important for stakeholders to support our activities on the basis that they’re done responsibly.

And again, as I’ve said to the mining industry, if you put the time in you will get the results.

I’ve talked in the past about the Archbishop of Canterbury ... Five years ago we engaged the Anglican Church and a broader faith-based group, not because we were on some religious crusade but because we recognised that those groups were so important in influencing people's thinking about our industry. And after five years, the Archbishop of Canterbury came out with a public statement saying, we've researched the bible over the last five years [and] we’ve not been able to find one negative reference to the mining industry, therefore we conclude that we can support mining as long as it's done responsibly.

If we could get each of our key stakeholders across the globe to align with that position the role of mining in society would be viewed very differently.

And we wouldn't be ranked with the [what have been called] the least respected of industry leaders across the globe. I don't mean to be critical of my banking colleagues or real estate colleagues.

But again, that perception is critical, particularly in terms of kids.

The second point is around being purpose driven. How do we demonstrate that the work we do is about purpose; is about making the planet a better place? And consistent with that, how do we engage local communities in a partnership conversation?

In my experience across the globe, if the local community supports a project, nine times out of 10 it will be developed.

And so the key thing for me then is to say, okay, what can we do to further the aims of that community in terms of the future they want to create for kids. I’ve seen it time and time again … When we bring infrastructure, when we bring water, energy, transportation, infrastructure, IT infrastructure, health, education, and other broader facilities, and develop those with the local community so it’s their project that we support to, if you like, transform their communities into something where the kids want to stay, and they've got a long term future, then there's no question you'll get support from the local community.

So, one, broader society and that engagement. Number two, it's about local communities. And if you get those two conversations right, the odds of developing your business are about 90% better than they would have been had you not engaged.

The third point is, we've got to do a better job in delivering outcomes and managing risks where the bad news stories create the negative press that is significant. So we’ve got to think like the airline industry, if you like, in terms of managing the existential risks, and making sure that a community is comfortable that we're managing the issues that should be managed the right way.

I commend the industry. I think we're engaging in tailings and safety and health issues in a very constructive way. We’ve improved significantly. But we need to do more.

We also need to have shareholders engaged.

I think one of the big risks we have today is when a shareholder says to me, what’s this ESG crap? And I say, okay, let's, let's have a talk about sustainability. They use Anglo American as an example, and it’s a powerful one ... I say, in 2007, Anglo had around 70 fatalities in its mining operations. In 2021, we had one fatal incident, which is one to many, but we're a very different company from where we were in 2007. I said, are you saying we should change safety? Oh no, no, no, I don't mean safety, was the response.

Okay, health then. In 2007 we lost 78 people to tuberculosis, which was connected to silicosis. And we lost 1000 people to HIV AIDS. In 2021, no people lost through tuberculosis or silicosis-related issues, and one person lost to HIV. Are you saying that we should change our approach in terms of looking after and making sure our workforce is healthy? Oh, no, no, no, I didn't mean that.

Three, environment. Do you think we should be making sure we look after tailings and other footprint issues, reducing water consumption and reducing energy consumption. I said, by the way, that also helps your cost. They say, I didn't mean that.

I say, okay, social performance ... If I've got people protesting at the gate, add 30% to my costs. Are you telling me we should literally annoy or not do the right things and not get community support? They said, not really.

I said, well, what's left? They said, it's climate change. We don't believe in climate change; we don't believe you should be looking at the energy transition. I said, well, as a comment, in terms of the metals industry, we're a key player. And certainly, we're needed to make big transitions. Now, climate change is a different debate but it's not a debate you should be having with the mining industry. You should be having that at a global political and policy level.

But at the end of the day we’re the key to making that transition. So I’ve said, this ESG conversation is ludicrous in my view.

Richard Roberts: I’ll change tack. Consolidation has been pretty topical, again, of late. In recent times we've seen some M&A in the gold space; disaggregation but also consolidation in the coal space. Iron ore, copper, lithium, nickel, not so much. Should consolidation be a bigger or even a dominant mining industry theme?

Mark Cutifani: Look, the way I think about consolidation, about changes to ownership more broadly, and I won't talk about specific issues, as you can probably appreciate, but it’s about efficiency.

Those that aren’t as efficient as they could be will expose themselves to those sorts of pressures and possibilities. And those that have performed well, or are being efficient, put themselves in a position where they can be a key player in those conversations. The question is, as businesses scale up, will they be able to be more productive across their asset base? And that’s the judgment call shareholders will make. In my view the industry has always been subject to consolidation, takeovers, rationalisation, restructuring; that will continue. And as different parts of the industry profit differentially, from trends that are occurring, other sectors will get picked up, and will look very different as a consequence.

As sure as life itself it will occur, and to be honest, it needs to occur for the benefit of society in terms of making sure that we’re using resources efficiently. So I think it’s part of the natural life cycle.

Richard Roberts: Maybe as a bit of a tangent to this, what odds would you give on a major automaker or a tech firm becoming at least a part time miner in the next sort of five to 10 years?

Mark Cutifani: Well, it’s an interesting question because I've said for 15 years … In 2011 [former General Electric CEO] Jeff Immelt was asking me about trends in the industry, and what should he think about: how should he talk to his executive and his shareholders? And I said, Jeff, the most important conversation you can have with your shareholders and your executive is, what are you going to do when you can’t get the resources you need to develop your products?

And he said, well, that can’t be a realistic possibility. I said, it used to take seven years from start to development, or from exploration find to development, to build a new mine. It now takes 20. And it's going to get longer. And, by the way, as we become smarter using material sciences, we're going to find new uses for different materials. And, by the way, the Chinese have been on this road for 20 years. They understand the importance of certain minerals in terms of new technologies. And they're picking up and looking to consolidate and dominate resource sectors for this very reason.

When will you and other industries and other big players wake up to what’s happening?

That for me is a 13-year-old conversation that is with us right now.

You’ve got a lot of players saying, what about supply chains? How do we secure these offtakes? What do we do now? And a number of governments are becoming active in those conversations, which in my view, is about 10 years later than I thought was pretty obvious that that was going to occur. But it is happening.

Richard Roberts: You went back to Vale last year; you accepted a role with Vale Base Metals. Can you give us a quick update on the progress there?

Mark Cutifani: The story was that I knew the old Inco business pretty well and I know [Vale CEO] Eduardo Bartolomeo and he asked me to come and help transform the business. He also said, if you can bring along a few guys that you've had over the years working on transformation ... Tony O'Neill Tony Filmer, Mick McAleer, those sorts of guys, they would be great assets to help us transform our business.

And so it was a great opportunity to go back to something that has now become much more important in terms of the global industry, and that is the critical minerals.

The first thing we did was we started with an asset review, looking at resources and the potential of the core assets. We’ve completed that review and given you and I are talking this morning, I’m about to give an update to the market on the progress that we’ve been making.

I’ve got to say it’s been very constructive and very positive, but lots of work to do as well. We have a a great set of resources in copper, particularly in Brazil. We’ve also got a great copper resource in Indonesia. We’ve got the Canadian assets, the nickel-copper assets in Sudbury, and Voisey Bay, that I think have got far more significant potential than has probably been appreciated.

Thompson, quite tired in its current configuration, also has significant exploration potential.

So I’m quite excited with all the potential we see. It really then is a matter of where do you start, where are the priorities, and how do you build the business over the next three-to-five years, to help position it as a global metals company.

Then longer term, how do we create a business that is market friendly [the market for our products].

I think in some ways we’ve lost – I’m saying as an industry – some marketing skills. I think Glencore and groups like that are doing a great job on the trading side. Whereas I think there's a real opportunity for us to do a lot better on the marketing of our products. The old Inco derived 40% of their earnings, through the cycle, from the premium they got above LME. They were true marketers of their products.

There’s an opportunity for us to do a lot better with our products given where we are, given the quality of the products we produce, particularly in nickel. And I think that will be an important part of the story going forward.

Mark Cutifani
Mark Cutifani

More from this author

Join us at one of our Upcoming Events