Very few people know that in our solar system, all of our planets are going around the Milky Way galaxy at 514,000 miles per hour. So one time around the Milky Way galaxy is 230 million years, one galactic year. So we want to put how humanity is sitting in perspective. If you look at that dot, that’s here, that’s our home, that’s us. On it, everybody that you love, everybody that you know, anybody that you have ever heard of, every human being that ever lived have lived their lives on this precious blue dot. According to Carl Sagan, who was the head of NASA who wrote this fantastic book called The Pale Blue Dot in 1994. When the dinosaurs were wiped out 68 million years ago, they had a very bad day. Something came from outer space. That was only one-third of a galactic year ago. That was only one-third of us orbiting around the entire Milky Way galaxy. When we were developing Oyu Tolgoi, sinking the number 1 shaft, we found dinosaur eggs that were lying there on the ground exactly 68 million years ago.
There is no question that the world is getting warmer and there is almost no chance that we limit global warming to 1.5 degrees. Global warming is going to be hotter than 1.5 degrees Celsius no matter what we do. Now we see that almost everybody in Europe is breathing toxic air. Europe is facing a severe public health crisis. Almost everyone across the continent is living in areas with dangerous levels of air pollution. What we have to do in Ulaanbaatar is close these coal-fired power plants in UB and clean the air of the city of this great nation. It is unacceptable for a country like Mongolia to be experiencing air pollution that can be fixed. But all of Europe has the same problem. Mongolia is not alone in having air pollution in the winter. Why is this happening? Let’s take a look at what is happening in the world. In the last 35 years, we added 2.3 billion people living in cities just like how people have moved from ger camps to Ulaanbaatar and Ulaanbaatar has become larger. This has happened all over the globe. For example, Dubai, which started with only 325,000 people to 3.3 million people in a very short period. Every week, 3 million people around the world are moving to cities. By 2025, which is tomorrow morning, 68% of people will live in cities just like how people are moving to Ulaanbaatar in Mongolia.
When is this going to stop? How much of an effect is this having on the human race? The global energy crisis is now upon us. Most economies around the world are facing the deepening energy crisis. We have geopolitical turmoil. We have as yet unrealized energy transition away from carbon-intensive sources. Just like getting rid of the Number 4 powerplant in Ulaanbaatar needs something else to clean the air, this is not a Mongolian problem, this is a global problem. We see this problem everywhere. Power grids globally are becoming increasingly unreliable due to extreme weather. As human beings, we have mined 700 million metric tonnes of copper since we were cavemen. There are 150 million metric tonnes of copper in the American electrical grid. 80% of all the copper we have ever mined is still in human hands and is in human use being recycled. This is what we have to start with. A cube 430 meters by 430 meters. So, we are looking at all the copper mined since the 4000 B.C. 700 million tonnes just to maintain 3% GDP growth. For our planet, we need to mine in the next 22 years, as much copper as our species has mined in the last 10,000 years. That is without the electrification of the world economy. Let’s turn to the old way, let’s burn coal to make electrical energy. That is an enormous burden on the miners. This is the time now when the whole world relies on the miners to find a clean, new, and sustainable way to mine copper. Mongolia is home to one of the greatest copper discoveries ever found in the world and there must be many more of these great copper mines sleeping underneath the Gobi desert. It is only due to the greatness of Chinggis Khaan that a country like Mongolia is so sparsely populated in relation to its enormous size, and hides so much hidden wealth. The copper shortage could derail the energy transition. This is coming from the S&P 500.
Achieving net zero emissions by 2050 will translate into an unbelievable ramp-up of copper demand, increased by a minimum of 82% between now and 2035, which is tomorrow morning. I first came to your country in about 1994. That was 28 years ago. It feels like yesterday morning. Time is very quick. When you’re 73 years old, you say what happened? I was just 18 years old, now I’m trapped in this 73-year-old body. Time goes by very fast. Let me tell everybody in this audience how much time has passed. The Boeing 747 airplane is now 50 years old. The fastest bullet train in Japan is 50 years old. Time has passed and we have a lot of work to do for our children and our grandchildren if we were to leave them a better world. Back then, the wind was cold and everybody thought we were crazy. We were down to our last USD 100,000 and our last deep hole produced the first major discovery which was hole No.151. We drilled 150 holes before South-West Oyu was discovered. We were virtually out of money. We discovered Oyu Tolgoi and announced it on September 11, 2001, which was the same day that terrorists flew three airplanes into the World Trade Center in New York. That created so much news that nobody knew about the discovery of Oyu Tolgoi at all. No one whatsoever paid attention to the discovery of Oyu Tolgoi on September 11th, 2001. Then we began an enormous effort to drill this deposit. We had 32 drills, we were flying them in on transport planes. It was only in 2004 that the Hugo Dummett deposit was discovered and that was hole No.231. So that is a lot of dry holes. A lot of disappearing holes had to be drilled to keep going. I was at Oyu Tolgoi yesterday. What a magnificent asset for the Mongolian people. What a magnificent asset for your children and your grandchildren. The amount of effort, science and technology, the systems and computer modeling, and the human effort to do this is unbelievable. This is the 4th largest copper mine in the world.
The world needs 20 more of these mines just to standstill. There aren’t enough of them. And this mine will be great for the Mongolians for generations. It is not for me, I’m 73. At my age, you are just interested in setting your footprints in the sand. But Mongolia must understand that Chinggis Khaan’s efforts left this nation with an unbelievable mineral endowment and not even a thousandth of one percent of what is there is known. Fortunately, there are new technologies that can define what is really hiding under the desert. The great Hugo North ore body is 1200 meters deep. If you go to see the Eiffel tower in Paris, France, it is 320 meters tall. If you stack four or five of them, that is how deep you are underground to the top of this deposit. The test of fortitude and the effort of the people that worked on this cannot be exaggerated. I can assure you that it is not me. It is the thousands of people that came here and gave their heart and soul to developing this deposit. Today, Rio Tinto and the Mongolian People, the Government are working together to build this great asset critical to Mongolia’s international reputation and critical to America’s role in supporting the world’s energy transition. You have one of the greatest mineral endowments in the world, and everybody here deserves to be proud of this. Africa, however, is home to some 30% of the world's mineral reserves and its rich mineral reserves are crucial also to global mineral supply. I’m going to give you an idea of what Ivenhoe did after we left Mongolia. During the time we had a 10-year delay, there was about a decade wasted in Mongolia arguing with the Great Khural about the rules of foreign investment. Oyu Tolgoi would be running 10 years quicker if so much time had not been spent on discussions. So we got frustrated and we went to Africa and found Kamoa Kakula. Mongolia should continue with this kind of programme. I see Mr. Khurelbaatar in the front row, my old friend. He was there during the painful years during the negotiation for our long-term stability agreement with the Great Khural. Please, my brothers and sisters, remember that you attract more flies with honey than with vinegar.
Attract foreign investors to your country. Because foreign investment is a good thing. You have many more Oyu Tolgois to develop. Provide stability for the foreign investors and treat them with respect and they will make your country like Kuwait, a very rich country. The world desperately needs what you have. Kamoa Kakula has a base case of present value of USD 20 billion. That is more than half of the economic pie shared with the Government of the Democratic Republic of Congo. Now the smelter is under construction. A very clean smelter 500,000 metric tonnes per year. This will be the largest copper smelter in Africa and one of the largest in the world. Now that we’ve opened this university where young Congenese can learn and develop the skill set of mining leaders in Congo, this is exactly the vision we had for young Mongolian men and women in your nation. I had the privilege to visit Oyu Tolgoi yesterday. The single thing that made me the most happy was to see that young Mongolian women and men are running that organization. This is fantastic research for the Mongolian young people developing these skills in the mining industry to put Mongolia as a world leader in mining development. Nothing made me happier than what I saw yesterday. The world’s next major diversified miner is Ivanhoe Mines. This is the same company that discovered Oyu Tolgoi. When Rio Tinto bought 51 percent, we took the name and started again. We’re developing the Kamoa Kakula copper mine, we’re building a big platinum, palladium, coal, nickel, and copper mine in South Africa, we’re developing the richest Zinc mine in the Democratic Republic of Congo with germanium and gallium needed for silicon chips. And in the Western Forelands, we expect to find a number of additional super giant ultra hybrid copper mines. On the new horizon, Mongolia and the Democratic Republic of Congo are the two countries that are in position to be world leaders. There should be plenty of space. Please continue. In the Western Forelands we’re drilling again in the near future, we will delineate more of our deposits. This is the world’s best hunting ground to find more giant copper mines. This is exactly what should happen in the Gobi. The Gobi should be properly explored at scale. It is crazy not to explore the Gobi. If we start today and make a great discovery in 5-10 years, it will still take us 20 years to put it into production for your children and your grandchildren. So, by starting now, I will be 83 talking to you about the discovery and 93 would it finally go into production. That is why you have to welcome foreign investors. It takes a long time to build a mine. The strengths and technical capabilities that an organization like Rio Tinto has brought to this country are priceless. It takes very sophisticated technology to go 1400 meters deep and mining astronomic veins and vortexes. It is not easy. It takes a lot of science, technology, and dedication.
Once something like this starts, you are married for generations. I am very happy to tell you that in the United States, we have Mongolian geologists working that were trained in Oyu Tolgoi. The point I wanna make is that all of the young people that are developing Oyu Tolgoi so capably that in the future, they will be working worldwide in developed mines. Young Mongolians working in the United States are doing a fantastic job. Same thing is happening in Saudi Arabia. We’ll take young Mongolians working in Saudi Arabia as well. They are working in a very similar condition. It doesn’t look very different from South Gobi. They have camels, goats, sheeps, they have gers, move around in the desert and they have copper and gold. So many other countries are interested in following the path of Mongolia. Let’s summarize what I’m trying to say today. Number one, due to the strength of Chinggis Khaan, only 4 million people control one of the world’s largest pieces of land in the world with high mineral potential. The land is proven to be one of the world’s largest copper mines with gold as a by-product. It is impossible for there to be only one. There must be many more sleeping under the Gobi, but it takes decades of hard work and stable conditions to attract the world to come here and do that. If the Mongolian people continue to create stable conditions, you’ll benefit the world enormously by developing your mining industry. There is no doubt about it. During the last 20 years since Oyu Tolgoi was discovered, new technologies have evolved to look under the earth without drilling holes. Just like when you go to the hospital, you have an MRI or CT scan. New technologies in geophysics can speed up the process of exploration.
This is something that can make Mongolia a greater and greater nation. In my lifetime, I am very happy for Mongolia’s success. I am very happy to see that a young generation of Mongolians trained to the highest world-class standards of technology to the point that Mongolians can go all over the world and export their expertise. So I thank the Mongolian government for the great progress and thank Rio Tinto for their enormous progress in reaching an agreement. Nothing is perfect, we can’t focus on our imperfections. We have to focus on the fact that the world desperately needs these metals. If there is a hope to leave a better world for our kids, the time has come for the mining industry to grow very rapidly and that is why I have come to address you here today. Thank you very much for your kind efforts and attention.
Mining Insight Magazine, №10 (023)
