S&P Global Inc. (SPGI) Earnings Call Transcript & Summary

All right. Well, I have it on good authority that we are now live. So good morning, good afternoon, wherever you're watching today. This is Tom Ashby. I'm the Head of Communications at the International Energy Forum, and I'll be emceeing the event for you today. We're hosting the 1st Symposium on Critical Minerals Outlooks, co-hosted by the Future Minerals Forum in collaboration with The Payne Institute. So we're hosting this on Zoom for a select number of participants, but we're also live streaming to hundreds of people watching on the live stream. And there will be a recording available after the event. We've got a fabulous lineup of speakers for you today and starting with, of course, the Secretary General of the International Energy Forum, Joe McMonigle, and of course, the co-host of today's event, His Excellency, Vice Minister of Mining at the Kingdom of Saudi Arabia, Khalid Almudaifer. [Operator Instructions] So thanks very much for attending today. And I'll -- without any further ado, I'll pass it over to Joe McMonigle, Secretary General of the IEF. Joe, take it away.

Well, thanks very much, Tom. Hello to everybody. I'd like to open by welcoming you all to the IEF's 1st Symposium on Critical Minerals Outlooks, as Tom said, co-hosted by the Future Minerals Forum in collaboration with The Payne Institute at the Colorado School of Mines. I extend a warm welcome to all the participants on the Zoom call and also those watching on the live stream where I understand we had hundreds of people register for the live stream. I understand that this event falls in the middle of the summer holiday season, and I hope you're all enjoying what's left of your summer. So for -- a very special thank you to all of you for taking time to be with us today. And I also wish to thank, in particular, Morgan Bazilian and the team at The Payne Institute for agreeing to work with us on this outlooks comparison report which is available on our website and informs our discussions today. I'd also like to thank Aldo Pennini and [ Andrew Davies ] and the team at the Future Minerals Forum for their support in organizing the symposium. And of course, special thanks to our co-host, His Excellency, Vice Minister of Mining of Saudi Arabia, Khalid Almudaifer, for agreeing to join us and offering some remarks today. Finally, I must thank the team at the IEF for getting this event together in record time, in particular, Mason Hamilton, Tom Ashby and Lina Murad. As I mentioned at the beginning, this is our 1st Symposium on Critical Minerals Outlooks, and we believe it fills an important gap in our work because of the availability of minerals will be an important factor in delivering the clean energy transition. Energy market experts often lack a clear understanding of the supply outlooks for minerals, while the minerals community often lacks clarity on the demand expected from clean energy technologies. As our report outlines, the energy transition has already affected critical mineral supply chains, prices and demand. But the transition is so complex that minerals demand will continue to be very difficult to forecast, especially in the medium to long term. Projections unanimously see massive deployment of battery electric vehicles, wind, solar and other mineral-intensive technologies. But demand will depend on energy demand, new technologies, costs, emissions and other consumer preferences. This report highlights the vast amount of uncertainty, I think, that is inherent in the main outlooks. This area of study is in its infancy, and the outlooks we compared in our first report should be considered the first generation of their time. Improved data collection and more collaboration between the energy modeling community and the mining community will yield, I think, better standardized and more comprehensive outlooks in the future. So this is a timely meeting and one in which we hope to repeat in the future in person in 2024. And so without any further delay, I want to pass the floor to my esteemed colleague, His Excellency, Khalid Almudaifer, the Vice Minister of Mining for the Kingdom of Saudi Arabia. Minister, the floor is yours.

Thank you, Joseph, for a well-delivered welcome, and good afternoon, ladies and gentlemen. I would like to begin by thanking the International Energy Forum for allowing us to co-host this symposium during a critical time for both the mining and energy sectors. I'm also delighted to have such a distinguished group of speakers at the symposium today. Thank you for making the effort to be involved. In the space of just 3 to 5 years, critical minerals have gone from a relatively mysterious concept to a major issue for policymakers and businesses around the world. In today's world, minerals have played a crucial role in healing our planet, but we are facing too many challenges. We need to quickly discover and produce more minerals. We must ensure our society supports and enable permitting mineral production. Our shared dream future and the energy transition ambitions require that we find new and stable sources for critical minerals. Critical minerals demand for clean energy technologies such as electrical vehicles, solar panels and wind turbines is forecasted to rise at least 4x by 2040. This includes phosphate, graphites, cobalt, manganese, [ vanadium ] and nickel. The current cobalt and lithium supplies are inadequate to satisfy the future needs. Saudi Arabia is the world's fourth largest [indiscernible] importer of minerals. The kingdom has committed more than $1 trillion of investments in projects that would require massive quantities of minerals. The best example of this, NEOM, the smart city in the Red Sea coast, that the total -- that has a total area of 33x the size of New York, New York City and will be powered exclusively by clean energy, including wind and solar power. As well as we're the world's largest hydrogen [ bank ]. Additionally, the national industrial strategy, which was launched by this -- by His Royal Highness, the crown prince, as part of the Vision 2030 will further increase demand for industries such as automotive, aerospace, renewables and defense as well their supply chains. For example, we aim to manufacture more than 300,000 EVs annually for 2030. To me, this massive increase in demand for Saudi Arabia miners -- for the world, not only Saudi Arabia will need -- miners will need to advance to new jurisdiction and in new spaces that will -- that might be difficult to access. More advanced technologies and know-how will also be critical to facilitate efficient and environmentally friendly targeting and extraction models. The mineral-rich region that stretches from Africa to Western and Central Asia, which we call the super region, has tremendous potential to become a game changer in developing resilient and responsible mineral value chain. The region encompasses 79 countries covering 33% of the world's land and house 40% to 50% of the world's mineral resources, yet it only receives 12% of the global mining [ explorations permit ]. This highlights the need to accelerate economic developments, mining capacity and the infrastructure in the region with large implication as both commodity supplier and goods producer to the good markets. As part of Vision 2030, South Arabia has taken steps to support the transition to green energy and secure critical -- advance critical minerals. I would like to touch on some examples of how we are making investments to supply and enable the transition. We have launched exploration programs to identify and assess potential mineral deposits in the country. We are collaborating with international investors to develop the mineral sector. These partnerships aim to leverage their expertise in exploration, mining and processing of critical minerals. We have also partnered with countries and private sectors and research -- and R&D centers that possess the advanced technology in the minerals sector. This collaboration involved knowledge transfers and technical assistance to develop the necessary know-how and expertise in manufacture, refining and finished products. We have been working on creating a framework for the mineral sector. This framework aims to provide clear guidelines and regulations for exploration, mining, processing semi-finished production and access to critical minerals, ensuring environmental, sustainability and resource management. We are offering investment incentive to attract, both domestic and foreign investors in the mineral industries. Major locals champions have been conducting studies in Saudi Arabia to develop new techniques for extracting critical minerals, from dissemination waste and mine tailings. But we know that no country has it all. That is why the public investment fund and our national mining champion, Maaden, created Manara Minerals, which was announced during the Future Minerals Forum in January to invest in mining assets globally and secure critical minerals that are essential for Saudi Arabia and the world. Saudi Arabia has all the right ingredients to become a world-class green and future minerals processing hub strategically located as a gate to Central Asia, Africa and Europe. We'll develop the infrastructure and high domestic demand, availability of energy. The Kingdom also has the vision and commitment to develop its mining sector -- mineral sector and will develop the economy with high levels of growth and security. It was not too long ago that we came together at the Future Minerals Forum. In January 2023, Saudi Arabia has launched this platform to enable regional conversations about maximizing the benefit from our collective mineral environment by establishing mineral value chains that help local communities at their hubs. To achieve this, producing country from the region and customer countries must work together, and this is where the FMF can serve as a space for this conversation. The focus of Future Minerals Forum is in the super region, providing a voice for a part of the world that has not had a significant presence in the global discussion on minerals. We have invited the region to own this event, but put forward in perspective from the global Southern East and take action to supply its share of the minerals and metals the world demands. But we need to be realistic about what can be achieved in a short space of time and ensure that energy transition is well managed. In the race to increase supply, we need to be aware of the trade-offs and the unintended consequences, including negative impact on local community and the environment. At the end of the [ event ] last January, we closed by setting out 4 initiatives to further action: defining requirements and action to the support of the super regions, covering the supply and share of the minerals in the world, creating center of excellence to ensure the region -- to enable the region to achieve its fair share of development from minerals by helping to build institutional capacity and delivering green technologies, revising sustainability standards to reflect the views of host countries founded in transparency and certification and supply, creating green metals hubs in the region enabled by new technologies. Since January, we've been turning this initiative into action and have been working with international organization and partners in setting out the objectives, recommendation and the plans. Today, we are building on the moment. And by convening this group of speakers, we want to hear from you on the critical minerals outlook, and we want to work with you to develop solutions. I invite you to join us in January 2024 to continue to turn this conversation into action. Thank you.

Thank you, Your Excellency, for some very useful opening remarks. Now we're going to turn to Morgan Bazilian, who is the Director of The Payne Institute for Public Policy, Colorado School of Mines. I would just -- before I hand over the floor to you, Morgan, I would just point out that in addition to this symposium, we have now published the critical minerals outlooks comparison report, which is available on the IEF website. So with that, I'll hand over to you, Morgan.

Thank you very much, Thomas. It's a pleasure for us to co-host this meeting with the International Energy Forum and the Future Minerals Forum. Both organizations do tremendous work globally, and we're honored to be included. The area of critical minerals has, as you and the Secretary General and the Minister have said, risen to the top of minds at the political level globally. That's a new phenomena. And likewise, as we've said here, the scenarios to consider what the world might look like in the future is a relatively new area of study. It also has the complexity that it merges the 2 worlds of energy and mining. And that's not always easy as we know. So as Thomas has said, the short report, it's a noncomprehensive report, has launched on the International Energy Forum website. It's a first pass looking at several different minerals outlooks. And I'm going to show just a few of the key results in a very short time here. We looked at 11 publicly available results from 8 different organizations published within the last 4 years. So that does not include -- largely, that does not include the academic literature. That is just the international organizations with one exception. There are 28 different materials that are mentioned across the 11 reports. In some jurisdictions like the United States, those are called critical minerals. In some, they're not. And they have very different definitions of criticality. There's about 8, the number of minerals we found that had comparable data across these multiple reports. The reports we used include excellent work from a wide variety of international and national organizations, including the International Renewable Energy Agency, that's IRENA. There was 3 reports we looked at over the past couple of years. The International Energy Agency, and we looked at 2 different reports. The World Bank, the Institute for a Sustainable Future, the consulting company McKinsey, University -- Catholic University of Leuven, something called the Energy Transitions Commission and the German Mineral Resources Agency. So those make up the scenarios we looked at. So again, it does not include the academic literature for the most part. And here are those 8 minerals. We see aluminum, cobalt, copper, graphite, lithium, neodymium, nickel and silver. These have become part of the wider rhetoric and vocabulary of critical minerals. It should be said that these -- the reports we looked at are energy-focused. So they are energy transitions-focused. Therefore, the demand that they model or the demand that they conceive of comes from future energy systems. That is not, in general, the wider demand for these minerals and metals. So this is just the energy use of these minerals and metals. And I should say the Minister made an excellent point to allude to refining and production of refined chemicals. For the most part, there's a little bit of gray area between the minerals demand and the demand for chemicals, and that continues in this type of scenario exercise. But as you can see here across the various scenarios we looked at, the assumptions around what role renewable energy play as a percentage in the overall mix varies dramatically. And therefore, naturally, the results do as well. So what we've tried to do across these 8 minerals, and I'm not going to go through each one, they're in the report. And I should stop and say here, thanks to Juliet Akamboe from The Payne Institute and Mason Hamilton at the International Energy Forum for their extraordinary work pulling this together in a short period of time. We will continue to refine this work and look forward to those partners who are watching online to do that with -- excuse me. Here's cobalt. And you can see on the right some of the different data points either over time or in specific decades or years, 2030, 2040, going out to 2050, that they vary quite significantly, the demand issues, again, just from energy transitions. And this has to do with assumptions about -- primarily from car batteries, lithium-ion batteries that use cobalt in this case. And what we try to do here is just make it sort of simple to see the various scenarios, outputs. And so you can see we have the median projected energy transition demand in 2040 of 308 kilotons, the current producer today of about 130 kilotons in the DRC. So quite a bit more, again, just for energy. One important thing to keep in mind about scenarios, of course, is that they're always wrong. The exercise of scenarios is not to make or try to make exact prescriptions or projections into the future, but rather to help various decision makers, analysts, researchers, international organizations, investors, et cetera, make reasonable decisions about the future given the wide uncertainty. And I think that's especially important in this area, given that even the assumptions and the parameters of these studies vary fairly widely. So we went through the 8 different comparable minerals that we saw. And again, while projections of future critical minerals demand requirements are necessary and that is necessary to understand the scale of the challenge a mineral-driven energy transition presents. And there, we say mineral-driven energy transition that is the future energy system is likely, highly likely to be much more mineral-intensive than the current one. And so that is the reason why these organizations would put out these kind of scenarios to try to inform future decision-making. It's equally necessary to understand the vast amount of uncertainty that's inherent in such exercises. The reports survey for this exercise should be considered the first generation of their kind. That is there's not a long history of this kind of scenario exercise, as you well know and as attended different international energy forum events of the genre, the energy scenarios have been going on for decades. And they are myriad. And so this is a start for the mineral-driven look. Improved data collection, increased collaboration between the energy modeling community and the metals and mining community will yield inevitably better, standardized and more comprehensive outlook for the future. And that's why we hope to continue this discussion. And again, let me thank the extraordinary partners at the IEF and the FMF and turn it back over to Thomas. Thank you very much.

Well, thank you, Morgan, for that excellent opening remarks. It's obviously a very complex and very nascent area of study, which we look forward to working with you to develop and refine in the future. So the next -- now we're going into our panel sessions. We have 2 panel sessions. The first is on outlook, analysis and scenarios, global critical minerals supply and transition requirements. So really building on what Morgan has been introducing there. And to moderate this session, I'm pleased to hand over to Ernie Scheyder at Reuters, who will be the moderator of this session, and then he'll hand it back to me for the second panel session. So over to you, Ernie.

Great to be with you, Tom, and great to be everyone -- great to be with everyone here today at the IEF, at The Payne Institute and so many others. As Tom mentioned, I'm Ernie Scheyder with Reuters. And I'm joined today by a top-notch panel to discuss the global critical mineral supply and transition requirements. Our panelists today include Saad Rahim, the Chief Economist from Trafigura; Elizabeth Press, the Director of Planning and Program Support at IRENA, the International Renewable Energy Agency; and Atul Arya, the Chief Energy Strategist at S&P Global. A quick planning note that Grant Sporre from Bloomberg Intelligence was not able to make it today at the last minute. But we thank him and look forward to future opportunities. We're meeting, as our previous speakers discussed, at a really interesting inflection point in the demand for critical minerals and metals as much of our world strives to go green amid the transition. And we had this excellent report that came out from IEF and The Payne Institute that Morgan Bazilian was just unpacking for us.

And I'd like to sort of dive right in and start with you, Saad, to get your thoughts from the Trafigura perspective on how you're thinking through the many reports that are out there. Morgan was just alluding to that, but there's so many reports. And I'm wondering just from your perspective, if we could just start out right at the top, how Trafigura is thinking through these many reports out there and then positioning itself to supply those minerals and metals as the demand increases across the world.

Thank you, Ernie, and thank you, too, the IEF and the Future Minerals Forum for having us here. So for those of you who may not be familiar with us, so Trafigura, we're one of the world's largest physical energy traders. We're also the world's largest physical metals trader. So we really sit by the middle of this energy transition discussion and really kind of looking ahead at some of these numbers. I mean, I think from our perspective, what we've seen is that there's been just structural underinvestment on the supply side over really the last decade at this point, so from 2014 onwards to today and even looking forward. And yet we're entering now a period that is completely different from really the last 20 years, where for the last 20 years, the only game in town really was China and China's demand growth. If you take copper, for example, is one of the ones that was mentioned. Over the 2010 to 2020 period, Chinese demand growth was more than the rest of the world really combined in the sense of China grew by 5 million tons. The rest of the world's demand actually declined by 1 million tons. Now looking ahead, when we look at that, that is completely reversing. China still grows by about 4 million or 5 million tons of demand, but the rest of the world grows by almost 7 million tons over that time period, right? So to go from actually declining to actually very significant growth over that time period is a real sea change in what we're used to from these markets. And what's interesting is really, when we look at a lot of the -- especially the supply forecast across all these metals, we really only have visibility out to 2030. And yet when we think about energy transition, we are talking about goals that are all the way out to 2050. So when we struggle to say -- or when we say we may struggle to meet even the demand out to 2030 for a lot of these projects, really looking at that long-term outlook really is where the challenge, I think, really starts to become very, very apparent. And for us, I think the scale of the underinvestment really requires kind of a global rethink around how do we supply this? I mean, you can look at any number of the forecast. I mean, I think the report does a great job looking at all that. But what's interesting about it is we talk -- we hear about peak oil demand. We never hear about peak copper demand. Every demand forecast line is some version of kind of straight up into the right. So even where we might see some substitution, some thrifting, more scrap, more whatever it is, the scale of the challenge is quite apparent, right? And for those of you who may be coming more from the energy side, I mean, in copper alone, the type of the supply deficits that we're looking at are equivalent to blowing a 20 million barrel a day hole in the oil market by 2030, right? So for us, that really kind of speaks, I think, the challenges that are out there.

Awesome. Thank you, Saad. Quick programming note. I should note we'll be chatting amongst the panelists for about 20 minutes, and then we'll have 10 minutes for question and answers from the audience. So if you do have a burning question for our experts, please save that for the last 10 minutes of this session. I want to go to Elizabeth at IRENA. And Elizabeth, this is the 1-year anniversary this week of the U.S. Inflation Reduction Act. And when we think about demand and supply, as Saad just mentioned, we are going to have sort of an exponential increase in a lot of these minerals and metals outside of China. How are you in IRENA thinking through this demand in light of the Inflation Reduction Act? Did we just sort of see this wildly outperform expectations even when it was signed last year?

Yes. Thanks, Ernest, and very nice to be with everybody. Congratulations to Morgan and the team on an excellent report. And we actually have done some of the things around the geopolitical dynamics and all that. You're absolutely right that the demand side is crystallizing, which is really, really good because I mean, obviously, the U.S. strategy has made quite a big shift in the trajectory for energy transition, but you also look at the European markets, the European strategy, energy strategy and also the global demand and the global climate as well, which is changing. And what we have -- we see it in sort of three parts, if you wish, the way that this is going to evolve. We're going to have a really tight market in next decade or so, as Saad was saying, and it's very clear that the energy community has not stayed low at this angle at all, they've been waking up and try to catch up and understand what it is. But there are 2 other aspects that needs to be looked in parallel. One is the disruptive innovation. There is quite a lot of uncertainty into projection on the demand side. And we have broadly seen that in the battery evolution since 2015. In our analysis, we were looking at what happened in the last 7 years in the battery thing and then how cobalt, for instance, demand for cobalt has dramatically changed and kind of shifted towards lithium. And then the third bucket of issues comes with the recycling and the circular economy. So you really have to have a little bit more holistic outlook of how this is going to play out. But be sure where you look, we know that the volumes, the energy will drive volumes. And how we manage the next 10 years will have consequences. This is not in energy securities like you have [indiscernible] this is energy transition issue, the transition how quickly the energy [indiscernible] by 2030 for climate change [indiscernible] and obviously at generic sort of critical materials block, but kind of break it down one by one looking at what exactly is relevant in the economic context and how they can manage this market tranche in the next -- market squeeze in the next decade or so.

Fascinating. Atul, I want to turn to you. Elizabeth mentioned disruptive innovation. And I'm curious your thoughts on -- if you can maybe dive into that a little more from your perspective on innovation and how different new extraction techniques, especially from nontraditional partners, could help upend the supply scenario here.

Yes. Thank you, Ernest, for the question, and thank you for inviting me to this panel. I hope you can all hear me all right?

We can, yes.

Yes. Excellent. Thank you. So let me address your question, and then I'll make a couple of other points. I think one of the things we have seen across the energy industry is that when there is a need, there is innovation, right? If you remember, what 10 -- more like 15 years back, we were thinking there will be no more sources of oil. It will all be coming from conventional sources, and then there comes the unconventional revolution. And we saw so much more oil and gas come online in the last 15 years. So I think we're going to see something similar in my view that there will be more innovation. Clearly, recycling, which was mentioned briefly in the report, is going to be important, but we will need new sources. And demand right now is driven by IRA and other similar, the REPowerEU, and of course, the Chinese demand hasn't come down. So one example of that disruptive innovation would be what we're seeing in the world of lithium with direct lithium extraction. So oil and gas industry, which knows very well how to drill a well, how to inject water, how to get water out of the well or oil out of the well is now getting very excited about this lithium extraction not really to get into the battery manufacturing and all that, but into supplying lithium. So I think we're going to see some of that new innovation around the globe. And in the U.S., we are seeing that in the large oil and gas companies. Just another point to make, going back to the IRA, we are tracking in S&P the overall IRA investment. And again, money kind of brings innovation to table. So we are seeing a lot of money driven by IRA from the DOE, from the loan programs office within the DOE. And mining, we are surprised on what -- how much more mining activity has been there in the U.S. So I think it's a fairly interesting space right now, and it's only 1 year. Tomorrow will be 1-year anniversary of the IRA. So it's a long way to go. I think one challenge we have, going back to what Saad said, about analogy to oil and gas, what we found unconventional was short-cycle high oil, right? We were able to drill and produce very quickly. I am not aware of any short-cycle lithium or short-cycle copper, right? I mean, as Saad was saying, it takes a long time to get there -- and we only have visibility to 2030. I think we need more of that innovation. Can we do much more recycling, for example, or the direct lithium extraction, could that be spread up to get things faster because right now, we see at least in the medium -- in the short term, so the next -- to the end of this decade, medium term, a big imbalance with the supply and demand driven by all the incentives which are out there.

That's interesting. Thank you, Atul. Saad, I wonder your thoughts on recycling and how do you see it fitting into the supply demand scenario here? I know folks are all over the map when it comes to recycling. Some say recycling's moment is now. Others say 10, 15 years from now, it will have its moment in the sun. How do you think through recycling's ability to address supply?

I mean, I think it depends very much on the metal and what we're talking about. So for example, copper, a large part of the market already is scrap or recycling, but you need that to continue to grow. But the problem is also a lot of it is already being used in a sense of you can scrap ships or older ships or whatever for the steel value, but you're not going to scrap your car or tear down your house to get the copper wiring out, right? So there are limits, I think, on the upper side on that. Aluminum, you already have a lot of, again, recycling that happens. So that continues on. But some of the other areas like lithium, like others, that technology is still very new and does need to get rolled out in scale. So it does depend. But I think across all of these metals, I think that is going to be a critical part of it. But to go back to what I think Atul was saying and alluding to, really a lot of this is also going to come down to incentives, meaning price, right? Ultimately, the solution for all these things is going to be time and money, but you need time and you need money, and money in this case, being a higher incentive price. And we saw that very much so with the oil side, right? I mean, the technology to do fracking, horizontal drilling had been around actually for decades, but it required sustained oil prices above $100 to really to unlock that, right, to make it economic if people decided we want to do this. And again, we're today not aware of technologies that may be out there that can allow us to do short-cycle copper or aluminum or at least we need a higher price that then says, look, we want to try some of the more unproven technologies to be able to scale those up because now those are worth it. And I think just again, going back to some of the context around the challenges, one of the things we talked about on the copper side, right, is it's a 30, 40, 50 problem, right? As in each average -- the average project size is now 30% smaller than it was over the last decade. It costs at least 40% more in terms of CapEx and takes at least 50% longer, right, to bring on. So this is kind of a real struggle that we've had. And even with prices having remained fairly high over the last few years. Similarly on aluminum, right, it's not a question of resource as much as it is capacity. All of the capacity pretty much over the last 20 years has been built in China that they've now capped that, and we're approaching that cap over the next year or so, right? So now when we look at it and we say, well, we need to build -- I think the report says basically 0.8 -- 80% of what China has today, and we're seeing almost 0 of that being built anywhere really. I'm exaggerating a bit, but the point being it's nowhere near that scale. So what is the incentive price? And what changes also shareholder incentives around saying, look, we want companies to go out, build new mines, build new projects in a way that we have not seen at least in the last few years.

Awesome. Thank you, Saad. Elizabeth, Saad said something that I'd love to get your perspectives on. The average copper mine right now is 30% smaller than in years past and, of course, a host of reasons why mines might physically be smaller or the delay -- the development timeline might be delayed. But from your perspective, from IRENA's perspective, how does the strong movement, I would say, across some parts of the world to resist mines, whether for religious or indigenous rights reasons or environmental reasons, affect the supply scenario? I mean, certainly, it does have an effect, but I'm wondering how you see it when we think 5, 10, 15, 20 years out when we desire these metals and minerals to go green, but we have such a strong opposition among certain sectors?

Yes. I think that's an excellent question to ask and one that is probably decisive in the way how we're going to move from now on because we know that there is a quite [ patched ] legacy of some of these projects and that the local communities, I would say, the minimum did not get to benefit from -- many of the communities did not get to benefit from the natural resources that exist in their land. And today, I think Saad mentioned it, like there is no shortage of resources, viable resources, but like how do you reverse, but how do you manage to do it fast and in a way that actually is sustainable and environmentally acceptable? So the 54% of what we have seen, that 54% of these reserves is in indigenous land, which needs to be -- it needs to be addressed upfront. And one of the issues is that local community needs to be part of the decision making. It needs to be involved really early on in the conversation around both how to harness these resources and also what is the local benefit. And we have seen that already happening in certain parts of the world, and it's going to be an [ upfront ] necessity to make sure that the benefits are shared more equally going forward. That's number one. Number two, there is a lot that can be done with the modern technologies, including energy technologies, to reduce the environmental intensity of mining processes. For instance, the use of renewable energy on site, that there's lots of trends that they're showing that you can actually reduce the footprint on site as well to reduce the environmental [indiscernible]. So it really has to be a holistic approach it takes from the local engagement all the way to understanding the life cycle and looking at each of the steps how you can reduce the negative impact and maximize benefits.

Awesome. Thank you, Elizabeth. Atul, I'm wondering if you could put your crystal ball hat on, mixing my metaphors here, and economists and energy strategists look 20, 30 years down the road. And I'm wondering if there's any thing that you're expecting that could be unforeseen aka a black swan event or something that you might see potentially on the horizon or something that you're preparing for that our audience should be thinking through that might not necessarily be immediately front of mind?

If it's a black swan event, I won't be able to forecast it by definition.

Sure. Maybe just spitballing.

I'll offer you a couple of ideas, right?

Sure.

I think whenever there is a need, there is demand, there's asset price and demand, that will create a lot of incentives. So I think we are already seeing sort of innovation in finding new sources like the lithium example we just talked about, but also there is more exploration for these things because we have a lot of unexplored areas, so to say. But we know all the deposits of any of these minerals is, I think, a bit of an exaggeration, right? So we're going to see more of that. I think recycling is a really important question, and can we really get recycling at the right cost and the collection issues, which Saad alluded to. And I'll give you an example. We have talked about plastic recycling forever, right? But still, there is not enough of plastic recycling because the chemical recycling is very expensive and also collecting the material, separating in different colors is very expensive, right? So I think recycling could be a big game changer. It can be expanded. And I'll just give you one example. There's a company, Redwood Materials, some people may know. They have received a $2 billion grant from loan program office for recycling, scaling up their technology. I mean, that's a real money, right? So hopefully, that kind of innovation will happen. And the third thing is that let's look for good technology development. So in the case of battery, there was an excellent story in FT a couple of days back about NMC versus LFP battery technologies for those who know because one is a lot cheaper but has certain constraints in terms of how much you can recharge and all of the other things, how much charge you can hold. So I think there is a lot of innovation to be had. I'm not a battery expert, but I follow biofuels much more. Sort of analogy to that, we are kind of today, I would say, in kind of chapter 1, paragraph 3 of biofuels, right? Maybe chapter 1 is finishing, and chapter 2 is starting. I think in some of these critical minerals, we are still in very early days. So I think even a year from today, if we have the same conversation, I have a feeling we will say, well, here are some 10 new things which have happened, which we didn't even think about. So that's where I will leave. Saad has a comment, I think. Saad is on mute, by the way.

Okay. Well, look, I think excellent points, and I think that's exactly is that so much of what we just -- we don't know, but it could go either way, right? So for example, one of the technologies that is out there is direct air carbon capture, right? So we have the technology today, it's not scalable, but if it turns out to be scalable over the next 20 years, you've actually eliminated the need for -- to be able to have to go into some of these things. So that's actually demand destructive. Similarly, we saw kind of the hyper on the LK 99 superconductors. Okay, that didn't pan out, it looks like. But that was suddenly a new source of demand for copper that -- and lead that no one had on their radar, right? So these envelopes that we just don't know about kind of what is out there, it could be either way. And I think where we are today though is to say, look, again, given what we know even just through the end of this decade, I think that's what's so interesting to us is say how do we even address some of this stuff just going forward.

Awesome. Thanks, Saad. And Elizabeth, maybe thoughts on the potential unknown and how you want to read anything through it.

Yes. I just wanted to add something to this actually that because it's so important to look across sectors and across the economy what's happening because these dynamics are [ placed on ] platinum. One of the examples is it's used in internal combustion engines. As the electric mobility advances here on the platinum from that side, obviously, the demand will be reduced on that side. So it's really important to watch the entire economy, not just the energy sector. And I think this is one of the -- is one of the recommendations we're making to governments to really understand where these bottlenecks, where the opportunities might pop up. And then there's innovations, the ongoing innovations. I mean number one, efficiency like there's so much efficiency at work but then you have like in solar battery chemistry already mentioned in introduction. And it's really changing -- it's almost -- I think Atul mentioned it, you should not be projecting anything because it's so dramatically changing almost on a daily basis. And then in solar space as well, like [indiscernible] solar cells, for instance, they've been around for a long, long time, but now they're really picking up, and the organic solar cells or quantum dot solar cells or whatever, there's a lot of stuff going on and one watch -- nobody wants to be held hostage to advance, so innovation is really blossoming. I think on the recycling side, that's going to take a little bit of time both in terms of -- to make a significant impact on supply side because it's going to take energy assets of size. It's going to take a little while to come to end of life to be able to recover any significant volumes. We're going to still have this mismatch for a while.

Got you. Thank you, Elizabeth. Before we pass it to questions, I just want to ask a broad inquiry of our panel. When we harken back to the 1990s, if you remember, we had DVD technology, if everyone can remember DVDs, and there was a huge movement to standardize DVD technologies for the players. And of course, that didn't really happen when you had to buy 4 different players and who could afford that all, and there are different DVD types and different media outlets and different DVD standards. We're starting to see some host governments force adaptation for chargers. And I'm wondering from a metals perspective if you see a movement or expect a movement for battery chemistries and if so, what that could mean for metals demand? Aka do we start to see LFP be standardized by some host governments? And what could that mean for iron or for other metals demand or NMC or NCA, et cetera, et cetera? It's sort of a high-level thought, but I'm wondering if you think that's possible and if so, what that could mean for metals demand, just to throw it open to the 3 of you.

I don't think it's going to be really feasible to have one single technology because there are such -- and also remember, if you're in China, what is available there versus over in the U.S. is so different. And security of supply is going to be -- and the cost, obviously, is going to be a key factor. And my thinking will be let thousand flowers bloom, and let's get the best technologies. And there is one dominant technology. Solar is a good example. After all the efforts, I used to work in the solar business, we are basically down to a conventional solar technology, which is what is now growing, right, crystalline technology and different variations of it. So that may be where we end up. We end up with lithium battery, but different variations of lithium or we may come up with some other technologies as well.

Got you. Elizabeth or Saad?

Yes. I mean, I think you can -- to use kind of the analogy, right, is okay, when you go to the gas pump, right, the pump technology is standardized. But the vehicles are all totally different, right? So again, the charging technology may be standardized because that -- and we're even seeing that in consumer electronics as well. But consumer demand, consumer preference will ultimately drive, I think, what the battery technology is. And also, if it -- the supply is really predominantly now starting to come out of China, we're seeing what they're doing on the EV side, if they're choosing to adopt the LFP technology and push that out as opposed to one of the others, then that's what will drive it. But again, the consumers have to want to buy that, right? So I think you can put in some level of standardization and it makes sense, but then the ultimate end product, I think, is going to vary.

Yes. Just to add, I of course, agree because we are still in a very transitional sort of dynamic space. And just to reflect a little bit on hydrogen for instance, it really in the last few years picked up. And there's a lot of [ acquisition ] about it, but in which application it's going to end up, it's still not clear. And that's going to have an impact on the materials because if you go hydrogen today, there is one side. If you go electrification, it's a different side. So I think there's still -- there's a lot of things in motion, and we still need to leave it a little bit to innovation. And it's just super important to have this conversation, to have transparency, to have more information and to share -- to have international cooperation and share information on these things because we all have a steep learning curve and need to -- and don't have time for -- to waste.

Got you. Thank you, Elizabeth. So save your calendars. 1 year from now, we'll loop back at the second symposium. We've got a few minutes here for questions. And we've got a question that sort of loops back to where we started. It's around different scenarios. And the questioner asks, do the divergent and different scenarios for metals demand help spur investment decisions or make investment decisions more scary and difficult? Sort of -- is there a possibility or is the unknown scary? I'll sort of throw it open to the 3 of you for potential thoughts for that question here. Go ahead, Elizabeth.

Because, obviously, it's like [indiscernible] is from a different side. I think we looked at -- the number one, quality of materials is a little bit location-specific. So there is like the different regions have maintained different lists of crystal materials for different reasons. But when we look across all of them, there is an agreement around the layer of materials that definitely are critical for everybody. So I think in that space, even though there's uncertainties and all, that there's a little bit of consensus that provide stability for the downstream investment in our opinion. So I think while some of the more [indiscernible] isolated and might less visible parts are probably not that obvious, there is a layer like around lithium, for instance, so -- or nickel demand that there is no ambiguity, and I think it's a pretty stable outlook or forecast for it.

Thank you. Atul?

I was just going to say that one good thing is that most of these minerals, metals, the demand is going up. So the question is really how high versus what is your comfort zone. So I think we need investments in all of that. And the big difference between those projections is really on exemption about how quickly energy transition will unfold, right? Is it a 2050 1.5-degree net zero? Or is it a 2070? So that's kind of where the differences are. But clearly, everything is going to go up. I just want to say that to add to even more data in the mix, just today, this morning, my colleagues at S&P led by Dan Yergin, who published a new report on the impact on North America metals and minerals market as a result of the IRA, I highly recommend you, it's available publicly and very detailed report. So adding more data to the debate.

More data is more welcome. And Saad, to you.

Well, look, I think we've highlighted a lot of the challenges. I think, again, if we go differentiating by metals, right? So I think if you look at some of the battery metal-specific side of things, there really becomes a question of technology chemistry, right? And that's why there is some hesitancy. Do we want to put all our eggs in one basket because if there is a technological breakthrough or something that makes nickel cheaper or makes [indiscernible] more sense, that's a bit difficult. But again, something like copper and aluminum, you're looking at it going, well, even if you're -- it's not -- you're using less maybe in the EV itself, but you still need the grid. You still need it in renewables. You still have a lot of other applications for it. But absolutely, I think, again, where investors are looking at it going, okay, where do we want to put it all -- basically put the money? And it ultimately is going to come down to shareholders looking at the opportunity set and saying, look, that's something that we want these companies to participate in, which has not been the message really for the last 10 years, right? So when we look at CapEx versus dividends, for example, these ratios have completely inverted and to a company that's spending much more returning cash to shareholders rather than investing partly because of the uncertainty. And to be fair, I don't know if we've seen a period where we are seeing all these different kind of technological breakthroughs, pathways in such a short period of time, right? Normally, these technologies is a 10-, 20-year process to get rolling in here, we're saying, well, the battery chemistry could change. This could change. And so it makes it a little bit harder, I think, for people to have line of sight, and that just exacerbates a lot of this.

Awesome. I think it's a great place to transition to our next panel. Saad, Elizabeth and Atul, thank you very much, and thank you to our audience for listening. A lot of moving parts here on this topic, and we look forward to future conversations with you all. Back to you, Tom.