“If the present tries to sit in judgement of the past, it will lose the future.” – Winston Churchill

Several western zinc mines have recently closed or are running out of ore quickly. Glencore recently announced that its zinc production fell 18 per cent to 306,000 tonnes as two of its mines have reached the end of their lives.  Vedanta’s Lisheen zinc-lead mine in Ireland has probably only 12 months to run. China’s ability to ramp up its zinc supply has stalled and will likely go into reverse as its more easily discovered near surface deposits are exhausted and it grapples with its huge pollution problem.  In the rest of the world it will take time to develop the few larger zinc deposits in the pipeline because several are in remote locations and will require substantial infrastructure development. The pipeline of new zinc projects has become a capillary tube.

So what about demand?  The IMF have identified key income levels at which we can expect a switch in metals consumed.  Demand for basic and low grade metals such as copper and iron will start to grow more slowly to be replaced by metals like zinc, aluminium and tin. This will occur as the development of the economy in China takes shape and the pattern of economic activity changes.  The largest companies in the mining sector have strategically bet against this future focusing on copper and iron ore. James Hutton (1726 -1797) a Scottish geologist and physician who develped the theory of uniformitarianism – a fundamental principle of geology – based on the premise that the “present is the key to the past”.   It seems to me that the leaders of the planet’s major mining companies have projected this principle and believe that the “present is the key to the future” and so the growing focus on copper and iron at the expense of zinc, aluminium and tin.

The market seems to have a Pavlovian reaction to the regular feed of sometimes contradictory economic trends and indicators from China which it sees as the tea leaves which will predict the future demand for metals .  So iron ore fell to a 20-month low on Friday about “persistent concerns about rising supplies” and general bearish signs from the Chinese steel industry.  We have seen what can happen suddenly with the nickel price as it responds to the growing impact of  a change in policy from a major supplier such as Indonesia.  The economist James Gant  said that risk is most threatening when it’s least obvious, and least threatening when it is most obvious.  Last week Lloyd Blankfein, the chief executive of Goldman Sachs said “I would say with complete and utter confidence that nobody knows anything and we (Goldman Sachs) are prepared for a market that stays this way and we’re prepared for a market that’s lower and we’re prepared for a market that’s more volatile.”

McKinsey consulting says that what it calls the “Upper Middle Class” in China as a segment of the population with annual household incomes of netween $17,350 and $37,500 accounted for about 14 percent of urban Chinese households last year but will account for 54 per cent of households in less than a decade.  The migration of the Chinese to cities is creating a new city or suburb the size of Philadelphia every month. Is this the short-term colliding with the longer-term.  The collapsing of time or telescoping of events with a rapidity never seen before in the history of mankind.  We do not know where this is heading and I suppose that is the point but what we do know is that this demographic and rapid urbanisation trend in China needs metals and a change in the mix. 

 [JPB1] James Hutton FRSE (3 June 1726 OS (14 June 1726 NS) – 26 March 1797) was a Scottish geologist, physician, chemical manufacturer, naturalist, and experimental agriculturalist.[1] He originated the theory of uniformitarianism—a fundamental principle of geology

John P. Barry
Managing Director of Irus Consulting Ltd. and Professional Geologist

A widely travelled and highly experienced economic geologist, John Barry is a confidential counsellor to the likely investor contemplating a considerable investment in the intricate business of mining metals. Don’t take a “flyer” and trust altogether in luck and invest your money in an exploration or mining project on the strength of a printed prospectus or the advice of an interested friend without the preliminary investigation and site visit of a reliable geologist with a basic grasp of commerical reality.  Irus Consulting provides  strategic and practical management advice and guidance  to its clients.  Time is a precious commodity for my clients, and indeed myself, as it relentlessly ebbs away and so I  try as best I can to avoid the mediocre - those projects and their champions which do not engender enthusiastic belief and passion.

Irus Services Include:
- High-level strategic advice
- Practical guidance and assistance on project sourcing, acquisition and implementation
- Rapid identification of key project value-drivers and potential fatal flaws.
- Capacity building and coordination of  external consultants.
- Design and targeting of effective marketing campaigns

John Barry was part of very small teams which discovered and sourced several multi-million ounce gold deposits in Africa. He has worked as an economic geologist since 1988 and as a consultant and then responding to the entrepreneurial spirit he was a founder and manager of three public resource companies which raised a total of US$70million. These resource companies are currently successfully exploring and developing gold and base metal projects in Europe, and sub-Sahara Africa. John has seen a lot of rocks working for consultancies such as CSA in both Ireland and Australia and as Senior Associate Geologist with Chlumsky Armbrust & Meyer LLC which is based in Denver.  He is a specialist in zin-lead exploration and in 1992 joined the exploration team which discovered the Lisheen zinc-lead deposit in Ireland as the resource was being expanded in the first couple of years after discovery and in 2008 led the first non Polish exploration company to successfully enter and acquire a major resource-project in the Upper Silesian Mississippi-Valley-Type (MVT) zinc-lead district  in southern Poland – the world’s largest minerlised district of its kind. John (P.Geo and EurGeol) holds a Master’s Degree in Geology from Pennsylvania State University and a MBA from the Edinburgh School of Business, Heriot-Watt University, Scotland.

“I would like to think that I have shown the tenacity, patience and focus required to implement many of my better ideas over the years and that I have learned valuable lessons from some failures. I believe one of my strengths is in communicating quite complex technical ideas in a concrete way that can be easily understood. I am a team- builder and motivator by projecting my enthusiasm and vision for a project. I am committed to the development of young geologists through supportive delegation.” John is now moving more from managing public companies to freelance consultancy and a more advisory role so as to concentrate increasingly on assisting management in effective exploration and discovery. He is Managing Director of his own Exploration Management and Geological Consultancy: Irus Consulting Ltd. Please visit for more information and free newsletter registration. 

John is now moving more from managing public companies to freelance consultancy and a more advisory role so as to concentrate increasingly on assisting management in effective exploration and discovery. He is MD of his own Exploration Management and Geological Consultancy – Irus Consulting Ltd.

Click here to download John’s Statement of Qualifications as a PDF

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