As an explorer and developer of precious metals with projects in Bosnia and Serbia, how would you describe the regulatory and legislative conditions for mining at present?
Generally speaking, you see a positive trend towards focusing less on merely extraction and transportation of materials, and more on having an overview of the environmental, social and health impacts of mining. I think legislation should also involve regulations on how to be transparent about such information. Ultimately what is necessary is to turn the mining industry into a level playing field, and for that, global uniformity on standards is needed, for which cooperation with governments is required. But today there are several factors contributing to a protectionist attitude from governments. For instance, the de-globalization trend brought about by the Trump era, the total breakdown of supply chains during Covid-19, and now the upsurge of geopolitical conflicts affecting supply chains.
Presently it is the financial services sector that is pushing through the transformation.
The environmental obligations pressed on my company by the banks far exceed what is required from me by the government, including climate agreements, procedures on energy sourcing, carbon footprint regulations—all the way to the supply chain. This involvement of the financial sector will affect how mining assets are developed.
Directly pertinent for us is the new Critical Raw Materials Act released by the European Union, which is an astonishing piece of protectionist legislation advancing a requirement on member states to produce a certain percentage within the bloc, or within countries politically aligned with it. If you try to do that in Australia, my home country, you will receive significant pushback, but in Europe, governments have a very high environmental standard which they hold people accountable for.
So you think there is a future for exploration in Europe?
If you do exploration in Africa, an investor will require 1000% return, since only one in 1500 mineral deposits is turned into a mine: even if you find a 1% nickel deposit, it will probably be located very remotely, involve difficulties around insufficient water, or excess of it, lack of infrastructure, and so on. In Europe, conversely, the infrastructure is excellent—you are always near a powerline, a water-source, etc.—you have availability to historical data, you have mining schools, and, generally, a culture that promotes exploration of mineral deposits. However, information is not sufficiently centralized. By contrast, in Australia information is highly centralized—ranging from a note from 1850 mentioning a lost deposit, to complex present-day geo-physical data. If Europe can organize itself and centralize information across the bloc, it would be an absolute dream for explorers.
How does your company carry out its explorations?
In Bosnia, we did extensive biodiversity surveys, water-testing, air quality testing, evaluated health records, taxation systems—to see where local communities receive their funding from. It cost us £8 million. We designed our project around not what the community was, but what it wanted to be. You gradually yet systematically design the project relative to the aspirations of the community, while still keeping it economically viable. The crucial questions then are: how do I gain a social license? How do I get the people in these little towns and villages to trust that I am doing the right thing? And that is a function of time, integrity and transparency. You must be open and honest with people, allow yourself to be criticized, to ensure that the way you interact with communities is mutually beneficial and sustainable in the long-term.
Is the ESG compliance that you endorse something you see in all jurisdictions?
Unfortunately, there are certain jurisdictions that turn a blind eye to ESG. Mining companies from China, for instance, extract and exploit no matter the cost. The Western, but also the South American, approaches are better, because the standards are higher. But, if you are a big Chinese conglomerate looking at the evolution of the industry, you will inevitably be incentivized to clean up your act too, otherwise you will lose your customer base. What we are seeing is a generational change for the better which will cause the trust that people have for mining to grow.
Why should a potential investor be excited about mines in Bosnia and Serbia?
Both Serbia and Bosnia sit on the northern part of the Tethyan mineral belt, which extends all the way from central Asia. Even back in the Roman times there was active mining here—particularly for bronze and iron. But recently, in the Yugoslav period, activity stopped because the budgets were not there. Nowadays, and into the future, we think there is huge potential in Bosnia and Serbia. Tomorrow we are putting out an update to our mineral resource system, which will show that this is a global top deposit which can compete with the major players. The region also has potential because of the possibility to supply the entire European market with low carbon primary materials like silver, zinc, and others.
Due to developments in high velocity electric vehicle charging, we will see the demand for silver soaring in Europe. Silver is the most conductive metal known to man, and is also incredibly malleable. Silver then is key to the transition in electrification. There just needs to be some evolution in the regulation to reach more uniformity concerning environmental and community impact in the Balkans.
