Benjamin Cox’s Post

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We are teaching how to value natural capital to change how we deplete our finite resources.

BHP taught me the value of effectively using high-value people. Anglo represents a natural capital real option for a deep technical talent pool. On a market cap per metallurgist basis, BHP trades for $414m USD and Anglo American for $122m USD. It's a weird metric, but metallurgists are our most constrained form of human natural capital. So, BHP is buying many high-value technical people who have been capital-constrained and spread too thin across projects. BHP considers materiality in every decision it makes, and one of the core materiality issues is whether it has enough brain power to optimize its operations. It is lower risk and quicker to purchase talent than to grow it. In the long term, we need to educate a class of new, diverse technical people to create business alpha. That's why we run at BRIMM - University of British Columbia, the world's largest by number of students, not faculty, executive education program in the #mining industry: to create the new mining middle class. However, in the short term, BHP is buying the cheapest technical team in the industry, and it's a smart move. --------- How did I get this number? I used Sales Navigator to find, locate, and optimize the metallurgists at both companies. BHP has 357 metallurgists on LinkedIn, and Anglo has 350. Don’t worry; I know every #HumanResources team in the industry is scanning the ranks of Anglo’s metallurgists and making offers. Glencore only has 177 and could use another, based on the size and scope of their operations, another 100+. Buying Rio Tinto is not a good deal; they trade for $473m per metallurgist, and Freeport-McMoRan trades for $286m; even Newmont Corporation gets $273m. None of these numbers consider enterprise value, and market cap and metallurgist numbers are twisted by how LinkedIn tracks things.

Andrew Brodkey

Mining Executive/Expert; M&A, Valuation, Technical/Operations, Legal, Commercial, Complex Contracts, Regulatory/Compliance; Environmental

6mo

Rote numbers of metallurgists (or for that matter, mining engineers, environmental engineers, geologists and other professionals) are nothing more than quantity and are no indication of quality. Even working for a major, I have run across professionals that are substandard, and am sure that many of you have as well.

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Jim Davis

Seeking new opportunities.

6mo

As a metallurgist who has worked for both Rio and BHP in the past, if my current employer was a target of one of these two I would be hitting Seek straight away...

Leonel Espinoza

Process Control Engineer at Anglo American

6mo

Pretty clever reasoning Mr Cox.

Steven Williams

Executive Chairman at Blue Coast Research

6mo

Very interesting analysis as always Benjamin

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You've made excellent points here. If I can add; it all begins with the hiring process. Nowadays, we often find ourselves being evaluated by Applicant Tracking Systems (ATS) before even getting a chance to speak with a human recruiter. These systems simply scan for keywords in resumes, which isn't necessarily the best way to identify talent. Another issue lies with some managers or leaders who seem to fear individuals on their teams who show talent. Instead of nurturing and developing these individuals, they are often sidelined out of fear that they may eventually surpass them. But isn't that exactly what organizations need? We should be embracing and empowering talented individuals, not stifling them. And there’s the fear of being challenged. Leaders in our industry need to be open to being challenged by their team members. There's nothing wrong with being wrong, as long as we're willing to acknowledge it and learn from it. Lastly, poorly structured teams lacking clear roles, responsibilities, and areas of accountability. It's akin to sailing a warship solely on luck.

Trevor Yeomans P.Eng

Mineral and Metal Processing Professional

6mo

Nice recognition of Metallurgist real value. Please remember in a typical flotation plant, they only have about 30 mins of residence time, to maximise recovery.

Well said Benjamin Cox. The social license to operate is much dependent on the operator’s legacy of inclusivity, respect for culture and heritage, and offering the “ore body” community in paramount seat in deliberations affecting the environment and socio-economic development.

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Michael Battersby

Chairman, Managing Director & Co-founder of Maelgwyn Mineral Services Ltd. Director of Cambrian Environmental Technologies Ltd. C.Eng, FAusIMM, MIMMM, SME

6mo

As in the famous words of George Orwell in Animal Farm - Whilst all metallurgists are equal some are more equal than others! Steve Flatman

Interesting, would be good to see Geo’s and mining engineers too.

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