Like a Rolling Stone | Kevin Fox

We are drawn to the organic world perhaps because we see in it our own fleeting reflection.  And yet, there is something magical about the enduring rock: a silent witness not just of evolution, but the origin of the universe itself.

In this episode we explore the world of minerals - all the way from Creation to the marketplace. We are joined by Kevin Fox, a geologist and senior executive in the mining industry.

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Highgrade is a not-for-profit media company that produces interviews and documentaries that identify, capture and disseminate analysis and insights in the field of natural resources and social progress.

Our mission is to provide open and free access to specialist knowledge and to disseminate good practice and innovation in this field. See www.highgrade.media for our portfolio of published material.

With support from the German Federal Ministry for Economic Cooperation and Development, through BGR, and the Inter-American Development Bank.

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Transcript

Åsa Borssén:
Flowers, and cats and whales. We are drawn to the organic world perhaps because we see in it our own fleeting reflection.  And yet, there is something magical about the enduring rock: a silent witness of not just evolution, but the origin of the universe itself. I am your host, Åsa Borssén, and this is Highgrade.

JINGLE

Åsa Borssén:
Welcome to this Natural Resources Podcast. The philosopher Alan Watts refers to “The wonder of a pebble in your hand”.  Today we explore the world of minerals - all the way from Creation to the marketplace. I am here with Kevin Fox, a geologist and senior executive in the mining industry. His career has taken him to some of the most remote corners of the world - but he retains this childlike “wonder for a pebble” – alongside his strong Irish accent.  Kevin, thank you for joining us.

Kevin Fox:
Thank you for the opportunity to be here.

Åsa Borssén:
You were born in Cork?

Kevin Fox:
I was, in Ireland. Quite a long time ago now.

Åsa Borssén:
Tell me about those years. How was growing up in Ireland back then?

Kevin Fox:
So I suppose the era we're talking about is the 1960s and 1970s, a long time ago now. What I'd say about Ireland at that stage, I guess, it was quite an inward-looking place, fairly insular. And we only joined the EU in 1973. So I suppose part of the feeling I have about back then was, I was pretty keen to get out of Ireland at some stage to sort of broaden my horizons, etc. And that was certainly an influence in my career choices or options as I looked at them.

Åsa Borssén:
But you went on to study in Dublin, which is not too far from Cork.

Kevin Fox:
That’s true. But I was, I suppose looking at that as my passport for moving abroad.

Åsa Borssén:
People would associate Dublin with writers before they think mining. Why rocks then? Where does this attraction to the inorganic world come from?

Kevin Fox:
Yeah, so interesting question and an interesting story. I suppose for me it started in particular with a love of geography at school, and it broadened from that into an interest in science more generally, in biology in particular, I guess. I got very interested in evolution, Charles Darwin, understanding the earth etc. And I was one of those nerdy kids who had a fossil collection, for example. I started reading up about the subject when I was probably 14 or 15. And thought to myself, you know, the combination of a very interesting science subject, plus the opportunity to travel, look at some very interesting places to live, development opportunities. All of that added up to an interest in going into the science of geology and what it might open up for me in terms of opportunities and learning.

Åsa Borssén:
So it was more of a draw to the geology and the science rather than the business side of mining.

Kevin Fox:
Yeah, I think that probably came later when I started to understand the economic relevance of geology and thinking about resources, probably in the first instance in the context of oil & gas actually rather than mining. And in my early years in college I was, I suppose, thinking about the opportunities that might be there both in oil & gas and mining. And at the end of the day, I suppose I preferred to go the mining route. But I certainly thought hard about oil & gas as well. And if you think back to the context of the time with oil price hikes and all the rest of it, it was, I suppose, the start of a broad awareness of the relevance of the science of geology and resource understanding and that mix of, you know, that and economics is really what got me quite interested in pursuing it as a career as well.

Åsa Borssén:
Kevin, let's consider the origin of it all. Where do minerals and metals come from?

Kevin Fox:
So if you I suppose take a step back and say how long has the earth been around? Well, the answer obviously is an awful long time. I mean, I think subject to correction of course, the oldest rocks known now or probably about four and a half billion years and, you know, that's really a testament to the origins of the earth probably go back even further before that, in fact, they certainly do to the Big Bang, and you know, how it all came into being etc. So, I mean, since then, obviously, the earth has evolved an awful long way, but the basic makeup of it, the rocks etc, and the composition of those rocks minerals, has been relatively consistent over the last couple of billion years, there has been evolution of the atmosphere which has changed how rocks form and some of the rock formations that formed 4 billion years ago, there are some of the very old iron formations, for example, probably wouldn't form in the same way now. But a lot of the products of the origin of the earth are still with us in terms of some of the most common minerals are, for example, oxygen, and aluminum, the iron minerals, etc. So the elements that make up the minerals have changed to some degree but still have a long, long history and in terms of their presence in the earth’s crust.

Åsa Borssén:
It's fascinating. Is it true that the center of the world is just a big ball of melting iron ore?

Kevin Fox:
Well, that's what they say. There's a lot of nickel in there as well, apparently, and it's very hot. Of course, nobody knows that for sure, because you can’t go there but the measurements that have been made deep into the earth suggests that yes, the core is a molten mixture of several minerals including iron, magnesium, and perhaps nickel as well.

Åsa Borssén:
Fossil fuels on the other hand, they're organic material. So what is the history of oil & gas?

Kevin Fox:
So oil & gas generally, and the oil & gas that we know about, has a much younger age in terms of you know, how long has it been around and it's a product of the, let's say decomposition of mostly plants, microorganisms, etc to produce oily substances and oil & gas, as we know them for a fuels, is one part of a spectrum of a variety of materials that are essentially based on hydrocarbons, ie mixtures of carbon and hydrogen.
 
Åsa Borssén:
You mentioned some of the most prevalent substances in the world but what are then some of the rarest?

Kevin Fox:
Yeah, so that's when you get into I suppose the whole discussion then about what metals are of particular interest to us. For example, gold is quite a rare metal in terms of its what's called crustal abundance. In other words, how much of it is around in the earth. And minerals such as irons that are a lot more common, for example, and would have a much higher crustal abundance. The very rare metals such as platinum, palladium, for example, are quite scarce. And then if you talk about substances like diamonds, for example, very uncommon, hard to find, and as a result quite valued for their rarity value.

Åsa Borssén:
So, is there a correlation between abundance and price?

Kevin Fox:
I'd say broadly, that probably is true. I mean, it's all about how relevant or how useful some of those minerals are as well. And of course, that drives demand and you know, supply is, is one side of the equation and demand is the other and the combination of the two is really what determines price value in use, as we often call it, is a reflection of just how much do we need to use copper or iron or gold or silver or some of the other metals that we employ in all sorts of aspects of our lives, etc.

Åsa Borssén:
There are minerals and metals literally everywhere. But why is it then so difficult to find viable deposits?

Kevin Fox:
Yes, a very good question Åsa, and I wish I had all the answers to those. But I think, you know, one of the things that perhaps is useful to say up front is that economic concentrations of minerals are essentially anomalies. They're unusual because they represent exactly what they're described as: anomalous concentrations of copper, for example. So although there is lots of copper in the Earth's crust, large concentrations, high grades of copper, for example, in excess of 1% copper are very unusual occurrences. And we often do call them anomalies. And finding those is difficult just because there are so few of them. And in many cases now, there are no longer indications on surface of the occurrence of those ore bodies of copper, gold, whatever else mineral you think about.

Åsa Borssén:
Which means you have to drill?

Kevin Fox:
You have to find where to drill in the first instance and then subsequently drill to actually locate them and evaluate them. So, they're hiding, I suppose, is the simple way of describing it in some respects.

Åsa Borssén:
And how do you determine when a deposit is viable?

Kevin Fox:
So going back to the piece about the economics. I mean, a lot of it obviously is driven by the product of supply and demand which equates to the price often of the minerals. So you've got to find a concentration of that mineral whatever it is, that is sufficiently high grade or appropriate grade and scale in terms of the tons of those minerals that are available to make the mining, the extraction and the subsequent processing of those minerals economically viable. It is in large part driven by the price, but also the characteristics of the mineral deposit you find and that is a complicated process that involves many disciplines, including my own of geology, but also mining and metallurgy extraction of the metal processing, etc. to produce potentially a viable commodity that’s saleable to customers for use in end uses in consumer products etc.

Åsa Borssén:
There is an important distinction between mineral resources and reserves.

Kevin Fox:
And the distinguishing factor really is economic viability. So, resources are concentrations of metals or minerals that might or might not be viable depending on the economic factors - we often call them modifying factors - which determine whether it is economically viable i.e. you will make money out of it by extracting and processing those resources. Sometimes, for a variety of reasons, perhaps the cost of extraction, it just is not viable to extract a resource at the price prevailing at a particular time. It may change because of supply and demand and so, you know, a grade of copper of, let's say, 1% might be valuable in some contexts, and in others it might be a half percent. And if you go back 100 years, or more perhaps, it was probably only grades of copper of around 1% that would have been viable. Now, we mine grades of 0.25-0.3% copper, and that's in large part due to larger scale extraction, but also more efficient processing of the ores that allows us to access and produce viable resources from lower grade concentrations of minerals.

Åsa Borssén:
Does this mean that as a geologist, when you find a deposit, are you then already thinking of the practicalities? For example, how you're going to get the material to a harbor or you're looking at tax law or you're looking at government relations.

Kevin Fox:
Yes, I mean, and oftentimes you think about it in advance, because the reality is, there are some parts of the world where there may well be potentially attractive concentrations of minerals, but because of distance from infrastructure or particular difficulties in accessing the area, it's just very hard to see how some of those resources could ever be viable in the prevailing economic conditions. So, that's one of the factors we use before we start thinking about where we would go to look for minerals; the whole potential for turning it into an economic prospect. And, you know, when we do locate concentrations of metals, minerals that we think are viable, it does start that whole train of evaluation of infrastructure requirements, capital cost for developing a mine, the likely operating cost, the interaction with law for communities which is very, very important these days and you know what we often call obtaining a social license to operate. In other words, having the permissions required to produce minerals in a variety of contexts is absolutely part and parcel of the sort of evaluation work that we carry out now when we go to look for minerals and produce minerals.

Åsa Borssén:
I'm very interested in the practical aspects of this. How do you find minerals? Where do you start?

Kevin Fox:
So there's a famous saying in our industry that the best place to go look for more minerals is close to somewhere you know there are some minerals. And that's, I suppose it a cheeky way of saying that there are particular areas in the Earth's surface that have a tendency to concentrate these minerals. For example, in copper, it's well known that there is abundant concentrations in Chile, for example, in Peru. So, there are particular environments around the world, geological environments, because of their history, they have a tendency to produce mineral deposits. So knowing the location of those is a guide in the first instance. When you go to actually find a new deposit, it's then a process you go through of finding those indications that there may be mineralization there. We use techniques in sciences such as geochemistry, and geophysics, which look for either the physical properties of the mineral deposit that might be detectable using particular techniques, or the geochemical signatures. In other words, if we take a sample from a stream, would there be a suggestion that there's a higher concentration of copper in that stream that might be pointing you toward a potential origin i.e. a copper deposit further up the stream, for example. There are lots of techniques we use these days using satellites to analyze the earth surface to see if there are unusual indications of a mineral deposit and this term I have used before, which is anomalies. We're always on the lookout for anomalies, i.e. something different that might suggest the presence of mineralization.

Åsa Borssén:
How much of a gamble is this? What are the statistical chances of finding something and then eventually turn it into a profitable mine hopefully?

Kevin Fox:
Yeah, statistically, it's a situation where the odds are mostly against you, unfortunately. So,  there's a reason why some of these minerals attract very high prices. And, as I said, it goes back to the balance between supply and demand and supply is often a recognition of the fact that some of these minerals are just scarce. And they're hard to find. And I suppose, if I was to point at something in particular, the platinum group metals, they're quite rare. They only occur in specific locations in the earth’s surface and they're very difficult to find in economic concentrations. Iron, for example, as opposed to that, is quite common, but finding high quality deposits of iron ore is quite difficult as well. So I suppose the short answer is it depends on the minerals. But mineral exploration by its nature is a high-risk enterprise: it requires a considerable amount of expenditure and commitment, dedication and professional people who know how to go about doing it. So, you know, there is a I suppose a fairly small group of people in the world that dedicate a lot of time, effort and money to this process. And yes, we are successful because, you know, there is a thriving minerals industry that supplies the needs of manufacturing, etc. But if I look back in the 35 years I've been doing this, I think it's fair to say that it's becoming harder to find high quality deposits of copper, for example.


Åsa Borssén:
Indiana Jones captures people's imagination.

Kevin Fox:
Yes.

Åsa Borssén:
A good discovery. How much is it Indiana-Jones-experiences in the field kicking rocks engaging with indigenous communities? And how much is it about systems and technology?

Kevin Fox:
I suppose again, the short answer is it's both. But basic prospecting techniques and going out there with a hammer and looking at the rocks on the ground. And understanding what's going on is fundamentally important to successful mineral exploration. These days, I’d guess we would regard it as a very important skill set, we have to have that. But then we supplement that with these other techniques. And, as you rightly say, these days and for many decades now, it's increasingly clear that engagement with the communities that live in the area that we work with, is fundamentally important to successful not only exploration, but in particular subsequent development of any discoveries that you make. So the range of skills that geologists require now, I think has broadened very considerably over the last…as I said, I've been in it for 35 years and you know, we've seen increasing application of, for example, technology, such as computer manipulation and storage of data, for example, has become very important. The application of geographic information systems for managing varieties of data sets has become very important. But those, those basic geological mapping skills, recognition of minerals and the types of alteration that often occur with mineral occurrences is very important. And those skills in communication and management of teams etc in remote locations, because you are often in remote locations, very important skill sets as well.

Åsa Borssén:
Do the big mining houses have a competitive advantage in exploration? Why not outsource it to specialist firms, the so-called Juniors?

Kevin Fox:
Yeah, so and that's a very interesting question. And we have often talked about the options that might be there for mineral exploration and what, you know, constitutes the key factors in successful mineral exploration. I mean, no doubt having access to funding is a very important part of successful exploration. But more than that, its commitment to funding over often quite long periods of time to make sure that you've got the opportunity to create the discovery and that is often a time-consuming process.

Åsa Borssén:
How long?

Kevin Fox:
Often it could be 10-15 or 20 years. And anybody that thinks that you can go from day one and have a successful discovery within a short period of time, that's incredibly difficult to do these days. I was going to say, though, that I think there is a very important role for the entrepreneurial, often referred to as Junior, companies because they often have that creativity that is sometimes difficult to generate in larger organizations. Not impossible by any means but certainly we regard the junior companies as incredibly valuable sources of ideas and opportunity generating options for us that we often bring to bear in terms of the combination of entrepreneurial skills from the junior sector plus, perhaps financial power, or availability of financial capability, and to make a successful combination of the two. And you know, we often engage in what we refer to as joint ventures that look to pull together those very important ideas and capability with perhaps financial and additional technical capability that often reside in particular in the bigger mining houses.

Åsa Borssén:
Kevin, I bet you would be a great dinner guest. You must have plenty of anecdotes from your years in the field.

Kevin Fox:
I have a lot of stories I probably could be very boring for long periods of time talking about the places I've worked, etc.

Åsa Borssén:
What have been some of the most intriguing places and people you’ve encountered during your career?

Kevin Fox:
Gosh, that's an interesting question, Åsa. I mean, I guess, the first thing I'd say is I've been incredibly fortunate in having the opportunities to work in mostly developing countries, actually. I mean, I spent 18 years in Africa, I spent 10 years in South America. And in all of those places, I guess, the really interesting opportunities are created not just for doing the work that we do, but seeing the social and political context of all of those countries, how they've, you know, changed over time, and the political events that were there when I was there, and how that has changed, and changed the countries, has been a fascinating aspect of what I've done. The opportunity to interact with so many different cultures and peoples on the ground, etc. has been a tremendous experience and a privilege really and I've thoroughly enjoyed that and, you know, going back to my original comment about wanting to change perspective from fairly insular Ireland in the 1970s and 80s. Well, I've certainly been fortunate in being exposed to many different opportunities in that regard all over the world.

I'd be really hard pushed to say where did I enjoy the most, but some of the countries that I, you know, I've found fascinating to work in include Brazil, for example, and the DRC. And probably one of the most exotic places I've ever worked in is Kamchatka in eastern Russia. Just the combination of the scenery and the climate and all of the other aspects that go with that. And I had some success in exploration in parts of Africa, which has been a fantastic learning experience and the opportunities it's created for people to develop careers in the mining industry. That's been one of the huge I suppose sources of satisfaction. And just reminds me and reminds all of us that when we’re successful it's a fantastic way of generating opportunities for value creation and opportunities for job creation and wealth creation for communities that sometimes in remote areas have very little in the way of alternatives for that sort of opportunity generation.

Åsa Borssén:
Kevin, it's been a fascinating conversation. Thank you so much for joining Highgrade.

Kevin Fox:
You're welcome. And thank you very much for the opportunity.

Åsa Borssén:
And to our listeners - thank you for joining us today. I hope you enjoyed this journey from the creation of the universe to today’s mining industry.  This podcast was done with support from the German Federal Ministry for Economic Cooperation and Development, through BGR, and the Inter-American Development Bank. Make sure to subscribe to our channel on whichever podcast platform you are using. We will be back very soon. Until then, so long!