When I was a kid, I used to go to Middlesbrough’s English Premier League matches with my grandad and his brother.
My grandad was the eternal optimist, always thinking we had a chance of winning 5-0, or scoring a last-minute equaliser, his enthusiasm was infectious. Uncle Eddie, on the other hand, was the pessimist in our gang.
He talked himself into failure in almost every match. As soon as the opposition had possession of the ball, even if it was 50 yards from goal, he’d be predicting impending doom. If or when they eventually did score, he’d say: “I told you so, typical!” and march out the ground five minutes before full-time.
I asked my grandad why Uncle Eddie always came to the match, “he loves the Boro” was his response. It’s true, he’d been to the ground during the darkest seasons, where wins had been as infrequent as sunny days on Teesside and the club languished in the third tier of English football, far away from the glamour of the Premier League. But, he kept coming back and his pessimism was still intact even during our rare periods of success.
Uncle Eddie springs to mind when I hear some of the executives of junior companies in the mining industry.
There is no doubt being the head of a junior mining company can be a hard slog. Your fortunes are so often beholden to factors outside your control, whether geological or macroeconomic, but you must still appease shareholders who have unrealistic expectations or brokers who want to cut a deal.
However, there have been few better times to be an executive in the sector than the last two years. Commodity prices are flying, demand is rampant and investor interest is at levels unseen for more than a decade. But, like Uncle Eddie, talking to some executives only elicits negativity, particularly from those working in Western Australia.
For these executives, WA is always “too expensive” or “you can’t get ground” or “the approvals system is too slow”. When you ask why they keep operating here, the answer is invariably along the lines of “well, because it is the best mining jurisdiction in the world”.
Of this, there can be little doubt. We cover many jurisdictions in the pages of Paydirt and pride ourselves on shining a light on what we believe are overlooked, underappreciated or misunderstood regions of the world.
However, facts are difficult to argue with and there are reasons why WA continues to attract much of Australia’s and indeed the world’s mining investment dollars.
Other jurisdictions may be less expensive, have more walk-up prospects, offer better tax regimes, quicker regulatory systems or provide lower input costs, but nowhere offers the same combination of prospectivity, predictability and expertise as WA.
In many other jurisdictions, identification of a project or prospect is just the start of a long, unpredictable journey towards development. In WA, if you secure a licence and follow the laws and regulations, there will be no surprises preventing you from reaching production.
The development pathway in the State is proven to be stringent but robust.
When international investors are looking at mining projects and ask for proof of an asset’s ESG performance, WA companies often find it quite difficult to express their credentials because these credentials are so embedded in the industry.
While companies in other places may be able to get all the way to project development while hiding environmental, social or governance skeletons in the closet, the WA system prevents such projects getting anywhere near that stage.
Issues are either ironed out earlier in the process or the project is stopped, and not even necessarily by the regulator. The wealth of industry knowledge within the State means any company which presents a project looking “too good to be true” is quickly assessed by peers. Occasionally these projects stand up to scrutiny, but more often they are proven to have flaws – whether expensive or sometimes fatal – and are quietly put on ice.
Longer-than-hoped-for approvals, delayed drilling programmes or expensive power and labour might all elicit a “typical WA” response, but ultimately the junior mining sector keeps returning to the State because it remains the best bet for finding, developing and executing an economic mining project.
So, a lot like Uncle Eddie, these executives may grumble, but they’ll be back because nowhere else can generate the same response.
I can only hope Middlesbrough eventually develop a winning record to resemble that of WA mining.