Mining and Metals Scenarios to 2030, presentation by Head of Mining and Metals Industry at World Economic Forum, Michael Tost at the 2013 Mining Lekgotla. 27 August 2013

1. Mining and Metals Scenarios to 2030
World Economic Forum
Michael Tost, Mining Lekgotla 2013

2. 2
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from over 1,000 global companies from
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Cross-industry
…delivering unique value to the participants

3. 3
The World Economic Forum – Our Value Creation Process
Insight Communities Interaction Impact

4. 4
Mining &
Metals
4 Strategic Partners 25 Industry Partners
• Alcoa
• ArcelorMittal
• Basic Element
• SCM Holdings
• Aditya Birla Group
• Anglo American
• Antofagasta Plc
• Africa Rainbow Minerals
• AngloGold Ashanti
• Barrick Gold Corporation
• Glencore International
• ICT Group, Inc.
• Lynas Corporation Ltd.
• MetalloInvest
• Metinvest Holding
• MKS S.A.
• Mosaic
• Newmont Mining Corp.
• Nyrstar N.V.
• OCP Group
• Quexco
• Rio Tinto Group
• Royal Bafokeng Holdings
• Sun Group
• Teck Resources Ltd.
• Trimex Group
• Uralkali
• Vale
1 As of July 2013
SOURCE: World Economic Forum
The Mining & Metals Community, with 28 Partner Companies

5. 5
• Water Resources Group
• New Vision for Agriculture
• Partnering Against Corruption
• New Energy Architecture
• Future of Manufacturing
• Driving Sustainable Consumption
• Health and Wellness
Mining and Metals Initiatives
Objective: Explores the views, priorities and concerns of key stakeholders
on mineral development. The Responsible Mineral Development Initiative
provides a multidimensional view of Value Created from Mining
2013 and Beyond: To identify a relevant and innovative future work
programme for the Forum
• New Models of Infrastructure Investment
• Downstream challenges and opportunities in steel and aluminum
• Contribution of Mining to a Sustainable World. 2030 and beyond
Responsible Mineral Development Initiative (2009 – ongoing)
Strategic Infrastructure (2012, ongoing) Led by other Communities
Objective: Methodology to prioritize
infrastructure projects with the greatest
impact on economic growth and social
uplift, and how should be
prepared, procured and delivered
Engagement: M&M, Infrastructure
Companies, Finance
Insight Communities
Report Phase II (2011) Report Phase III (2012)

6. 6
2009: Financial crisis, high uncertainty in the markets, strong
tensions between governments, business and NGOs regarding the
role of the mining & metals industry in the provision of social and
environmental sustainability
Objectives:
• Stimulate dialogue and mutual understanding between the
public and private sectors and civil society regarding the future of
the mining and metals sector in a non-threatening context
• Deepen insight into the complex context in which the sector
operates by bringing together multidisciplinary and multi-
stakeholder perspectives
• Provide useful tools to improve strategic decision-making, and
identify strategies for collaborative action
CONTEXT & OBJECTIVES OF THE SCENARIOS
WORK

7. 7
Steering Board
African Rainbow Minerals Ltd (ARM)
Alcoa Inc.
Anglo American Plc
ArcelorMittal
Basic Element
International Finance Corporation (IFC)
Newmont Mining Corporation
Rio Tinto Plc
System Capital Management
United Industrial Corporation (OPK)
PARTICIPANTS TO THE MINING AND METALS
SCENARIOS TO 2030 PROCESS
Advisory Board
Amnesty International
ASEAN Federation of Mining Associations and Chamber of
Mines of the Philippines
Aspermont UK
The Balloch Group
Caromb Consulting
Care International
Center for China in the World Economy (CCWE), Tsinghua
University
CSIRO Minerals Down Under Flagship
Foreign Affairs and International Trade Canada
Government of Chile
International Council on Mining and Metals (ICMM)
Instituto Brasileiro de Mineração (IBRAM)
Prospectors & Developers Association of Canada (PDAC)
TechnoServe Inc.
Transparency International
Wesizwe Platinum Ltd

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MULTISTAKEHOLDER SCENARIO DEVELOPMENT
PROCESS
l
255 participants
Business
53%
Civil Society
36%
Government
11%
Over 20 workshops ~300 participants

9. 9
Asia
dominates
Asia
dominates
Regional
spread
Regional
spread
Open cross -
border flow
Open cross -
border flow
StableStable UnstableUnstable
Extreme
volatility
Extreme
volatility
Cyclical
volatility
Cyclical
volatility
GDP
growth
GDP
growth
Decisive
response
Decisive
response
Passive
response
Passive
response
Radical
response
Radical
response
Incremental
response
Incremental
response
GDP
decline
GDP
decline
Closed
cross -border
flow
Closed
cross -border
flow
Ideological
convergence
Ideological
convergence
Ideological
divergence
Ideological
divergence
Free marketFree market Controlled
market
Controlled
market
Geo-economic
landscape
Geopolitical
landscape
Environmental
outlook
Economic
outlook
MAJOR UNCERTAINTIES UNDERLYING THE FUTURE
OF THE MINING & METALS LANDSCAPE

10. 10
FROM WHICH 3 RELEVANT AND CHALLENGING
SCENARIOS EMERGED

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OVERVIEW OF SCENARIOS
video

12. 12
Global overview:
• GDP growth of approx 2% average, but in GTA countries new indicators increasingly factor
in social and environmental issues into GDP calculations
• Environmental standards are used as the basis for protectionist measures by GTA
countries: capital comes with “green ties” or “no ties” depending on the originating bloc
• Differing standards within each bloc mean different pressures on the minerals sector, with
companies operating in GTA countries innovating around minerals stewardship
• Tense relationships between GTA and non-GTA countries as they use different approaches
to compete for resources
In 2030, the world is divided and countries are
defined economically by whether or not they
belong to the Green Trade Alliance (GTA), formed
in 2016 to promote “environmental sustainability
without compromising competitiveness.” GTA
countries, including some
industrialised, resource-rich and developing
countries, have experienced a period of
accelerating innovation and lifestyle changes.
While there is strong alignment among GTA
countries, non-GTA countries operate
independently.

13. 13
Global overview:
• Strong global growth of 4%, high demand for commodities and high prices, cross-border flows
of material and capital very open
• Increasing dominance of mining and metals sector by emerging countries
• Resource-rich countries have increasing power in the global system, and look to capture social
gains through retaining processing and manufacturing
• Local laws protect local environments, but there is no significant progress towards a widely
adopted CO2 reduction agreement
• Growing acceptance that it is too late to prevent climate change, focus on adaptation
In 2030, the world is committed to realising the
benefits of global interconnection but has
become far more complex and multipolar. Power
comes from control of resources as well as
possession of capital, with resource-rich
countries increasingly playing by their own rules
and influencing the global system. Civil society
has gained power, resulting in various local laws
that affect global corporations, but no unified
global system exists.

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Global overview:
• Global growth is low, averaging 1.5% annually. Protectionism is high, commodity prices are
volatile
• Markets are shaped by state interventionism while trade is defined by a complex web of
protectionist barriers and preferential agreements. International institutions fade into
irrelevance
• Capital is limited for the mining sector and country risks limit international
investment, particularly in emerging markets and low-income countries
• Local control of resources is of paramount concern: resources and technologies that are most
readily available domestically are favoured, irrespective of impact on the environment
In 2030, the era of globalisation is a distant
memory as nations prioritise narrow self-interest.
They hoard domestic resources, enter cartels
based on regional and ideological alliances and
resource blocs, and engage in neo-colonialism
and import substitution strategies.

15. 15
Where are we
shifting towards?
FEEDBACK FROM THE WORKSHOP
 What are the most important distinguishing factors in the three
scenarios?
 What are the most important differences for both minerals and
capital markets in 2030 in the three scenarios?
 For each scenario, what are the signs we see today that indicate
the world might be moving in this direction?
SOME FINDINGS :
Role of sustainability (GDP+)
- Demand for minerals is more polarized (some minerals crash, others
are in high demand). Prices are generally higher because they have to
pay for higher standards. But they are also more stable, less volatile.
- Capital: Capital is widely available within the GTA, but perhaps there
is even a risk of a "green bubble“; technology will have a strong role
- Signposts: Environmental unrest, even in China; German
“Energiewende”, product labels/shifting customer values

16. 16
Where are we
shifting towards?
FEEDBACK FROM THE WORKSHOP
 What are the most important distinguishing factors in the three
scenarios?
 What are the most important differences for both minerals and
capital markets in 2030 in the three scenarios?
 For each scenario, what are the signs we see today that indicate
the world might be moving in this direction?
SOME FINDINGS :
Power of communities (and employees?)
- Minerals: Demand is very high as domestic demand (to produce
domestic goods) adds on to already high global demand
- Capital: Similarly, new domestic sources of capital add onto an
already fluid global capital market
- Signpost: SA's focus on beneficiation, Multipolar world vs current
global structures (WTO, UN  G20, G8, G2, G0?), increased influence
of communities

17. 17
Where are we
shifting towards?
FEEDBACK FROM THE WORKSHOP
 What are the most important distinguishing factors in the three
scenarios?
 What are the most important differences for both minerals and
capital markets in 2030 in the three scenarios?
 For each scenario, what are the signs we see today that indicate
the world might be moving in this direction?
SOME FINDINGS :
State owned enterprises / China
- Minerals: Demand comes from actors' concerns about future supply
- Capital: Capital access is shadowy and politicized, highly uncertain
role of technology
- Signpost: SA's “Declaration of strategic minerals“, EU
policies, China’s role in Africa, Export restrictions (agriculture, minerals)

18. 18
What do these
scenarios mean for
South Africa?
FEEDBACK FROM THE WORKSHOP
 What are the challenges and opportunities for South Africa’s
mineral resources as recipients of global investments?
 What are the challenges and opportunities for South Africa’s
mining companies as players in global markets?
SOME FINDINGS :
- Joining the GTA is both a challenge (because it represents a
significant policy step-up) and an opportunity (because it would
unleash leap-frogging opportunities, and could propulse SA ahead of
other BRICs); “Green tape”
- Domestically: The power of the local is an opportunity to establish
better community relations, but also a challenge as it will make it even
harder to come to a common vision of SA's mining future; Globally: Is
SA at the crossroads of centers of power (strategic location), or is it
merely far away from all of them?; “Smart tape”
- SA has the capacity to adapt to and navigate in such a shadowy
world; but is that really an opportunity the country wants to exploit?
Can a country so dependent on global trade really strive in a world of
closed borders, even with so many natural riches?; “Red tape”

19. 19
Response options
for South Africa
FEEDBACK FROM THE WORKSHOP
 Which scenario offers the most opportunities for South Africa
looking out to 2030? Which scenario offers the most challenges
for South Africa looking out to 2030? Which is least relevant?
 Pick one of the three scenarios that you see as most relevant to
South Africa and assume that the future will definitely look like this
scenario. How can stakeholders of South Africa’s mining and metals
industry collaborate in order to enhance the economic, social
and environmental sustainability of South Africa’s mining and
metals sector in this world?
SOME FINDINGS :
- Establish a joint understanding of “Mining in SA – past, current and
in the future” and agree what role each actor has; Build trust to
engage
- Education System is key
- “New models for infrastructure investment”
- Productivity: New incentives needed, agree on the role of
technology;
1)
2)
3)

20. Mining and Metals Scenarios to 2030
World Economic Forum
For more information:
http://www.weforum.org/reports/mining-metals-scenarios-2030/
http://www.weforum.org/industry-partners/groups/mm-mining-metals/index.html
http://www.weforum.org/issues/strategic-foresight
michael.tost@weforum.org