“A deposit without a road is an accounting line, not an industrial asset.”
Sufficient reserves, insufficient flows
Identified reserves of copper, cobalt and bauxite comfortably cover projected electrification needs to 2040. The difficulty is not whether the resources exist, but the capacity to extract, process and move them within timeframes compatible with demand.
In our geographies the limiting factor is almost always the same: evacuation infrastructure. A concession whose ore must travel several hundred kilometres on a degraded track frequently sees its logistics cost exceed its extraction cost.
Power, the second constraint
On-site processing — concentration, hydrometallurgy — requires a reliable and affordable power supply. Where the grid is unreliable, the operator falls back on diesel generation, at a cost per kilowatt-hour that makes local processing uncompetitive.
That is one of the reasons we built an energy infrastructure activity: it lifts a constraint our mining holdings encountered systematically.
Traceability is becoming a price factor
European and East Asian buyers now require full documentation of the chain of custody, extraction conditions and the origin of volumes. That requirement is no longer declarative: it is audited, and it feeds directly into the price obtained.
Assets able to demonstrate it gain access to better-quality counterparties and more favourable financing terms. Those that cannot see their buyer base narrow.
Implications for the investor
We draw three practical conclusions: never assess a deposit without modelling its full evacuation chain; treat access to power as part of the investment thesis rather than an operating contingency; and make any commitment conditional on a traceability framework being operational from year one.
This document reflects the opinion of its author at the date of publication. It constitutes neither an offer, nor a recommendation, nor investment advice.