3rd Canadian Tunnelling Company

Transcription

[Music] What I would like to say is I have done a few of these before I like them to be very interactive. What I would say ask any question you want. I never like to have any question off balance, I know I am being tapped so some questions I maybe able to answer a bit more frankly than others I will do my best to be as frank as possible. Sometimes maybe if it was just a private I could be very frank but I encourage you to ask any question you would like, you want to send me that's why we are here to have a discussion. So whatever is on your mind, please feel free to ask me. What I would like to do is go through just I have a few slides that I would like to take maybe five minutes of walkthrough just to give you if you are familiar and maybe give you an idea of who we are, what we do, what are some of the issues we face, and then I have a last slide on a couple of issues, matters that I thought would be of interest. If our questioning takes us in other directions that's great because this is not about me, it's about you. And so the things that I have are some of the issues that we are facing as an industry and also some of the experiences that I have had around managing people and managing a career and some things that I think are useful for you to know that you began that track. And so quickly I would just like to walkthrough a few slides that go through where we operate. So it gives you an idea of where we are located, where we might have operations, where we are building projects around the world. And so we are very diverse, I should say we are very diverse geographically, we are not as diverse if you look at our people in our organization. We are very, we look a lot like me, if I can say it that way. And we are trying to change that, and but you can see we are probably a little underrepresented in Africa which is been an issue that we are trying to correct as we go forward. We have a couple of very large projects that we are looking at in Africa but also in South America also. But the key about one of the keys about our business is and as we talk maybe at the end about some of the issues we are facing, we can't choose where we go to operate, we have to go where the resources are. And a lot of the easy resources have been found and a lot of those that are in more stable countries are already in operation. And some of the more perspective areas or places like Africa, where governments are not as stable operating environments and physical regimes are not quite the same and legal institutions are not as strong and so those are some of the issues that we are facing as an organization. If you look at what we do this just kind of gives you an idea of the various areas we were at and where we are in those markets size wise. I have another slide shortly that will show profits that will give you an idea where our profitability is spread across those markets. Some of you might have seen that many companies will say well we have to be number one or two in a market or we don't want to be in it. The way we look at it is we search for the best opportunities, we do put opportunities or commodities through a review there are certain commodities that we preferred not to be in because we don't see the industry dynamics as being that favorable. I will say zinc maybe one of those where it is more plentiful, you don't find large resources. Our mantra and our strategy is very large, low cost, long life so we are looking at things that will last for a minimum of 20 years hopefully 50, 60, 70, 80 years which is a very long time for a mine and that will produce when you look its production rates compared to other mines are very large mines. In copper we have interest in some of you know the top if you look across I think we have interest in three of the top 10 mines in the world. The one thing I was going to say I am just going to go back as we come back. There is also a reason I put this picture on the slide and I will come back to it hopefully a little bit later but I just want you to remember that and I will plant a seed. One of the things that we attend to that we are very proud of and I truly believe that is that we work very hard on being environmentally responsive, sustainable development which I include environment, health and safety both of communities but also our workers but also how we deal with governments and communities. But when you look at that picture we will never be seeing as a green company really, no matter what we do. We can be the best in our industry but we will never be seeing as somebody that's a stand out because we have an impact. You know in some areas this is not a mine that we will clean up and we will be gone once we are done but some types of mining that we do once we are done you wouldn't know we have been there but this won't be one of them. If you look at where we sell and what we sell as of way by destination we do sell around the world but you can see how Asia is really beginning to dominate our industry. If you looked at China five years ago, six years ago instead of being 25% of our revenue it would have been less than 10% so that gives you an idea of how it's been growing. If you look at what we sell you know pretty diverse but we have been a bit more way to towards iron ore and aluminum. Iron ore to partly because its price has been so high so it's kind of skewing that a little bit. I put this up just to give you, you can see where we make money but certain commodities come in and out of favor if I can say it that way from a pricing perspective. So these things go up and down over time but what I would point out is if you look at 2008 that was a record year for us and look at the first half of 2010 which is that last part there. We made almost in the first half of this year as we almost made as much as we made in 2009 and pricing for most of our commodities have gotten better in the second half than they were in the first half. I mean if you just look at consensus for what we will do, well this would be a record year for us and we are still in a very uncertain economy, particularly in the US as I travel around the world different economies you get different fields for how people feel what's going on and what the future is like. In the US it's still very uncertain people are unwilling to really kind of start investing. We are investing, we haven't announced it to the market yet so I can't get into a lot of detail yet but what I would say is come February look and see what we start, well I think we are going to start saying and talking about it in November. Our investment pipeline for the next 5 years is more than we have ever spent before, very high levels of investment. And I will talk about maybe a couple of those. [Audience] So it didn't really here tell about October, we were going gangbusters and literally our iron ore group was just flat out doing everything it could to produce more iron ore and I am not kidding you over a weekend in October the ships disappeared at the ports in Australia they just left, orders to stride out and things just fell apart. So there were wobbles but for it really didn't hit till the end of '08 and then but when you look well this is going to be a record year work demand on what we need to do from to build new supply is just enormous for us. We cannot invest, we actually are having trouble getting our people in businesses to spend capital fast enough. And when I tell people that that are in other businesses they just kind of look at me, and what we want to prove capital, let alone, we can't get them to move fast enough coming out of the global financial crisis where we had to take some very significant steps because while we had a record years that year we were also under very heavy debt after making that all kind of acquisition if you are familiar with our company maybe which was an all-cash deal, the markets fell apart, we had in hindsight had bought something. That was a very big acquisition near to the top of the market and we couldn't term out that debt in some of those things as a result that we were, our main competitor was coming after us trying to buy us and so we were kind of stepping a position. And then suddenly the markets fell apart and we had a huge amount of debt. I would say that in June of last year so almost 18 months ago we had $40 billion of debt. At the end of this year and if you looked at what the analysts are saying we will have somewhere around $5 billion in debt and they are about right. So it just gives you an idea of how the world for us has changed in 18 months. Just quickly I mean if you look at what's happening in the world and we have been caught off to some degree in different areas as surprised as everybody else, as the Asian economies are taking off they are going through that period of growth that is very material intensive that you saw Japan go through say in the 50s and the 60s, US and European economies went through that much before them, but just to give you an idea let's say copper over the next 20 years we expect more copper to be used in the world than has been used in the last 70 years. And when we look at what we, we have to be producing twice as much copper in 20 years as we are today. And we produce as a world about in round terms I will use about 15 millions tons of copper a year. So we are going to have to produce somewhere around 30 million tons of copper in 20 years. We are developing one of the largest mines in Mongolia right now that will produce a little less than a half a million tons of copper. So to meet the demand going forward in 20 what years we are going to have to produce 30 of those operations over the next 20 years about and it's costing us about $5 billion to develop that one operation. That just gives you a little bit of view on the scale that our industry is facing as we move forward. And just quickly the only reason I really put this up is as you see what's happening in China, as well as India is starting to follow, it's a little bit slower, it's not as command and control as China is so it's not happening quite as quickly and smoothly. When I say smoothly it's such a consistent rapid pace year on year but I think in India as I visit there more and more my view is the genie is out of the bottle. The people that the up and coming generation in India wants and this is happening around the world, they want everything that you have and that genie is out of the bottle and it's coming. So you know happy for questions I was just a lot brief introduction that I wanted to give, a little bit about our company, what's happening. I think you may have done some reading, there have been some case studies that have been done. There are things around some of the issues that we face as a company. I think somebody mentioned to me that I might get some questions on, the bribery issues that we faced in China and our four people that were arrested and subsequently found guilty and sentenced to jail there, our Afghan acquisition and some of the dynamics around that, and how it kind of put the company in a difficult position. I am happy to answer or discuss any of those like I said nothing off of limits, yes. [Audience] Yeah we were realizing that we have been somewhat in some instances conservative when it comes around moving into more risky locations. So we had an opportunity and we actually had an interest in Columbia in a coal operation, which has turned out to be very successful operation over time. We sold out of that in the mid-90s mainly due to risk around operating into Columbia. And looking back we can say we did that way too early. If you go back 30 years ago now two of the biggest operations and most profitable operations that really drove our company were in Africa. It was a copper operation in South Africa and uranium operation in Namibia. And so we have worked in less secure places or you know less developed places but sometimes we have been a little reluctant to be as aggressive as I think we should be in those areas, any we are realizing we do need to change that. Guinea we have a massive iron ore opportunity there. And we are having one of the issues that we are facing is that first group of mining issues is that the view that Guinea sees around the strategic nature of that resource because it is so big and governments wanting the bigger piece of the pie. That's probably about a $10 to $12 billion development, massive impact on the country. And so you see the struggles that we are facing and trying to develop it but what the government wants as well. We also have to go where the resources are as I said earlier. So wherever we have to define resources and Africa is one of the untapped potentials for very large resources including if you want to be in copper over time one of the biggest is the copper belt in Africa which includes Zambia and the DRC. And so we are going to have to be there over time if we are going to be in these commodities and so we are going to have to adapt one of the things as be much better about government relations than we are today. [Audience] Yeah I think copper is one that has probably the best set of fundamentals because it's growing so quickly. It's plentiful but not plentiful in high concentrations. You can find it at what grades that we would say about 0.5, 0.4 which are very hard to mine profitably. A 1% copper mine used to be a low grade copper mine. Nowadays if you find a 1% copper mine at that it's a superb fine. They are also getting deeper so if you look at underground mining for copper today it's about 25% of copper is produced from underground. We figure by about 2020 it will be about double that amount. So it's getting deeper and the deeper harder to find more complex to develop, much more expensive. There is the really big block caving copper opportunities probably right today it can only be developed by three maybe four companies. That will evolve over time but right now, Metcal so I used in iron ore may use in steel making, not as plentiful and where it is being found now is in more difficult locations like Mozambique to develop. I think it has very strong fundamentals. Iron ore mainly because usually it's such a logistics challenge to get when you mine iron ore it's not about mining it's all about logistics we were talking about that. Our iron ore mines in Australia which are some of the biggest in the world, we own about 1500 kilometers of a private rail system that we run ourselves, we run it through an Automated Operation Center that's based in Perth, which is about probably 1500 to 2000 kilometers away from where the mines are. It's a combination of about 20 mines and they have to mine it and train it all to the same locations and blend it into a common final product that than is loaded on the ships. And so when you think about taking 20 different operations and some were up and some were down and some have problems maybe could have breaks or whatever and managing that logistics chain to make sure that you are blending to a certain spec of a final product is you know something you have helped us with is quite an undertaking. [Audience] Question: What's the competitive environment like competing in China, with Chinese firms and do you think that the arrest imprisonment of your employees was in anyway related to that? It's very difficult. We don't believe we can operate in China at least as the majority owner, so we are looking to partner with Chinese. We very much see it as a strategic resource, you have seen this with the debate that China has recently gotten into over some of the sea issues and they have been using rare ores it appears things like say as kind of a part of the tool against Japan in this debate. China wants to own these resources and that's one of the issues. When you look at what China faces they realize what they have to, they don't have the ability to meet their own internal means through their own commodities in country. So you will see them going out more and more and trying to buy commodities run operations in other countries. And they have been doing that very aggressively in Africa and South America, successful sometimes, not so successful in any other ways. Sometimes they haven't been haven't worked really well with in dealing with community and community issues. We think we need to partner with Chinese and that's why we have been working with Chinalco because they will be doing that. And they have cheap financing which could be a big boom to us but also we have technology and capabilities that they would like to have, we have reputation around the way we operate and our excellence that could be beneficial that gets us access to certain commodities or deposits so I should say that they might not be able to get. So we think that that can be a win-win. We think we just, we have been working on negotiating an exploration agreement within China to try and work with them to identify deposits in China, but we also recognize we are not going to be the majority owner. We maybe able to operate because for a period they will want to gain their own operational expertise over time and replace us we do recognize that. The arrest, hard to say but I think the evidence would say they were probably somewhat connected, yes and but looking back and having done our investigation we now know that this was something that was going on for some period of time as well. Our people were taking bribes, it was completely outside of our systems, it was cash and grudges and things like that but they were doing it and they were guilty of what they were found guilty of doing as well. And that hurt us, it hurt us with other governments around the world but it hurt us in China. And after we bought Alcan and got ourselves into a very debt- heavy position and weren't able to do things like share issuances or terming out that debt and some of the things we might have been able to do before the global financial crisis hit. As I said our competitor came after us in a bid and so we kind of had our hands tied as to what some of the things we could do externally. We couldn't issue stock to help pay down some of the debt which may have been an option we were considering because we couldn't issue stock and put a price on our stock that they could say we will buy at that price. So we found ourselves in a very difficult position. After the whole world fell apart then and we were still heavy with that debt, there weren't a lot of options for us to try and bolster the finances of the company. And we entered into an agreement I don't know how many of you are familiar. We entered into an agreement with Chinalco to make a significant investment of almost $20 billion into our company. And at the time there weren't any other options. The financial markets were closed, we couldn't borrow money, we couldn't issue stock, our stock price went down 80%. We probably didn't want to issue stock. Yeah, it was a scary time and my whole net worth is tied to the Rio Tinto share price. It was a very scary time for a lot of people. Within six months things started really changing. We could do other things and it was apparent that the deal that we had negotiated at that time which was the best we could do was no longer the best deal we can do. And so we changed direction and that's didn't go over very well in China. And iron ore pricing was going through the roof, we were looking at ways of changing the way iron ore was priced from long- term contracts that where the pricing was set annually to more of a quarterly or a spot market price, they didn't like that. Then there was an arrest of our people for something they had been doing for some times though I mean these things all damaged us quite significantly to be honest with you in China. We had been working on that relationship very hard and we have been using some very renowned experts to help us as well. And we have made quite a bit of progress but we still have work to do. But I would say we are very happy with the progress we have made today. There is one up here. [Audience] No it's the inability of supply to keep up with demand. So China and in round figures I should have slightly more precise but in round numbers that would be I think importing around 600 million tons of iron ore this year. If you go back to when I was the CFO in the iron ore group it was a 100 million. And if you would have told somebody that someday not even 10 years from now but someday they might be importing 500 million tons of iron ore they would have just left you out of the room, absolutely left you out of the room. And they are doing it 10 years later. And so there has been a massive underinvestment and supply and there is a catch up but it's still finding resources, finding big resources, there are infrastructure issues, there are all the issues around negotiating with governments for fiscal stability. I will just use an example I will go from iron ore to copper because I was intimately involved in our entering to the Mongolian copper asset. But it took us about two years maybe two an half to negotiate an investment agreement that would allow us to fill comfortable investing $5 billion in that country. But to put that in perspective if that mine was up and running today that single operation would represent 25% of the GDP of the country. So you can understand why they were nervous. They were nervous that a western company was going to take advantage of them but they were going to negotiate a bad deal that in hindsight three to four years later if prices were much better or other things that didn't look so good and we were nervous of that as well. This is an operation that will last for 60, probably more, but at least 60 years. We don't want to make an investment and start operating something and find that four or five years later because of issues that we have we lose it due to expropriations. So it's all these issues that governments are struggling with as well that we struggle with and as a permitting process you can imagine as I showed in the picture in the first, people are going to fight us on permitting. They don't necessarily want that in their being done. But they want their air-conditioning, they want their refrigerators, they want their cars, they want their houses, they want their apartments, they want their iPads, their iPods. And you know if you can't grow it usually comes from mining. And so whether we like that or not it's the truth so we have got to do one or the other and maybe you know over time the world will become where we grow more things and then dig in the amount of the earth. But that is going to take a very long time to change. Those are not the things that happen overnight. [Audience] And that does vary from place to place, so in Australia where you see a lot of not only commodities, well gas is a commodity but you see the energy but when I talk about commodities I mean copper, coal, iron ore those sorts of things. There you cannot get enough engineers and just people to do construction and run operations is going to be a big deal. In other places like Africa or Mongolia we have people but they are not and I don't mean this rudely. So they are not educated and trained to do the work we are asking them to do. We just build a massive operation. It's very similar to what I said about Mongolia in Madagascar. And a billion dollars in round terms, poor massive mining operations for TIO2. The people that we have hired and trained to work there, to build it, to now operate it don't even wear shoes. And yet they can't come work on our operations without hard toe boots and safety gear and you know the training, welders, mechanics we train those people to do that but you know that takes time to do and so that's another issue that we face in developing countries. That is a major issue. In the supply chain it varies but things like just like we cannot bring on enough supply of copper, iron ore are further down our supply chain people that make trucks, shovels, tires, explosives those are all things that I think over time that will be bottlenecks and they will expand at different paces and some of those bottlenecks might disappear for a while and they will open up some place else but those kinds of things shipping could be one as well. It isn't right now but with all that trade that's going on in the water you can have times where you have a lack of global shipping capacity. [Audience] Yeah there is quite a bit of pressure on us and it's kind of fine that we do get different pressures from different shareholders and I will come back to that in a minute. But there is a pressure on us to grow, partly due to our customers because they don't want to have the high prices as high as they are encountering. Copper recently it's fallen back over the last few days but went over $4 a pound with you know iron ore prices as you said are very high. Customers don't like paying that and so there is pressure there, the pressure from our shareholders to grow into these very profitable pricing regimes that we face right now. Some shareholders that are more, that are not necessarily company pickers are so big that they have to invest across the commodity space. Sometimes we get pressure for them to not invest too quickly because that creates oversupply and drives prices down and will bring profits and evaluations down for the whole industry. So we get that which is kind of anomaly as well. But it's getting harder to find really true tier-one assets and they take a long time to develop. And that's one of the issues that we are trying to get our hands around. We found that what we would refer to as a tier one diamond deposit in Canada and it's been an operation for quite sometime but from find to first diamond was a decade. And it's getting worse, find to first copper is now taking in places maybe 15 years and so it is becoming very hard to find and develop and get in an operation. Now, for us we usually like to develop a massive operation. And that's one of the issues we have been facing in Guinea is they see us taking too much time studying and figuring out how to build and get the logistics in place to build a $12 billion operation. They want jobs today. They don't want jobs in a decade, well you can imagine politicians. They don't care about jobs in a decade they want the jobs today. And so how can we go in and develop one or two million ton operation that cost $600 or $700 million that gets things flowing today while we finish the studies and then build something bigger. That isn't in our DNA that it needs to be and so we are looking at how we have to change that. Buying companies, our shareholders, our investors, when I say shareholders not just the mom and pop in the street but kind of the city, the people from the city are very worried that we will pay too much and that's a big concern. So there is that constant friction. Yeah I am sorry if I am not going in order but. [Audience] So we think around the way in which we operate so that's both from excellence and that we are efficient and we run a very good operation that is a safe operation. And you see when there are issues you saw the recent issuing in Chile where the miners were trapped underground. Safety is a big issue for our industry. I would say that, I don't have a slide today. But if I was to put up a slide of how our industry does against other industries and then how we do within our industry you will find that you would be surprised to find that the safety in our industry is much better than a lot of industries that you would expect. And that the way we perform within our industry is one of the best. But it is something that we work on and work on and work on. We take it very seriously. I am very comfortable in saying this is a true value. It doesn't mean we are perfect, it doesn't mean we get it all right, it doesn't mean that people don't get hurt. This year we have two fatalities within Rio Tinto, you know our goal is obviously no fatalities ever but it's something that we work very hard with. We work very hard on managing the impact on the environment. As I said in the first picture we have an environmental impact but managing that the best we can I think we have a competitive advantage in doing that. We are working on biodiversity. We now have a stated goal of neutral impact in biodiversity so that when we go in and we have to develop an operation we are very careful about figuring out an understanding, the makeup of what animals are there, what planet life and what not and that we make out for the impact that we have, working with the communities and governments. And I have seen that in Mongolia so when we went into Mongolia there is not a resource we found somebody else found and we had to be buy into it and then we had to help negotiate the investment agreement. The government of Mongolia would only sign that agreement with two companies and we were one of those two companies, the other one was they would have with BHP, they would have. But you know so as we went through that, it became so clear to me that was a competitive advantage for us. We are now working very hard at making technology and innovation competitive advantage and we have a few instances were we have done very well were we run our train system in Australia remotely. Driverless trains, we are working on driverless trucks. We are working on automated tunneling, for underground mines. We are working on sorting systems, sorting systems that are used in the food industry but if we could bring them into our industry we could open up resources that are now uneconomic and make them economic. We are spending a lot of money on innovation and I will be honestly thinking mining companies have not been head of the innovative curve. I think - [Audience] It varies by commodity so you can imagine in a diamonds mine, not much with logistics we basically carry it out in a suitcase. We try to make sure other people don't do that that we do. Actually when I was in charge of our diamond operations I went into our and they laid out on a table that was about twice as wide about 200,000 carats of diamonds. Gold, not much in the logistics but when you think about bauxite which goes in the first portion of making aluminum it takes a lot of oxide to make aluminum. It's a logistics shipping and so it's mainly around rail and shipping are the biggest logistic challenge. Challenges that we face and when we find deposits quite often they are not near ports or they are not real rail infrastructure and it used to be when I was in iron ore, it used to cost a million dollars of kilometer to build a rail line. I am assuming now it's probably at least 2 to 2 and half million dollars a kilometer. So if you are 1000 kilometers away from a port it's very expensive to build a rail line. And so you have to build an operation that is so big enough to support that major investment you can't just build this a small mine. And usually then if you sometimes we have to build our own ports which are very expensive as well. Coming back to the China question, one of the reasons we are trying to work with China is because they can build infrastructure like that including rail and port much cheaper than we can so we are trying to access that capability. Come over here. [Audience] We have a lot of joint ventures and we enter them for different reasons. I think they will continue to be a major aspect of our business. We would much rather in most instances own and operate a 100% of our project. I think what you will find now is that going forward governments will want a piece of that pie. So there would be more joint ventures that will include a piece with the government. In our project in Madagascar they got 20%, in Mongolia they got a 3rd, they want it half. They actually want a 51% a 3rd so you are seeing that they see these are strategic resources they want to be involved. We may do it because we need to access somebody else's capabilities like Chinese strengths and building infrastructure and so they may need to have a cut of the pie as well and part of it is these projects are becoming so big as a financial diversification as well. A big project used to be $500 million was an enormous project in the mining space a decade ago. We are looking at developing a really quite what we refer to as tier one asset in Arizona for a copper project we will spend a billion dollars on it before we decide if we are going to build it. And so when you look at the kinds of investments that we have to make as a company I mean they are just enormous investments and so joint ventures kind of play in that as well. But they introduce their own problems as well. [Audience] Yeah it's something I will be honest with you that we struggle with. We have knowledge of markets that other people that should be better than other people, that we should be able to use this to our advantage in trading. And we can also manage some of the risks that we have around our operations through trading. We do use trading for that and I think we do that fairly well. But we have always struggled with being more like a Glencore if you are familiar with Glencore real trader because first of all we will be competing against banks, financial institutions and we are not sure we are best suited to compete against them firstly because our compensation systems are so different and so can we hire the best and brightest to do that and so will we truly have a competitive advantage against those companies and groups. We kind of keep coming down that we probably don't. Now Glencore actually does do operations and trading, they do both and I know the CEO of Glencore very well. And he talks that they have two completely different compensation and systems of managing people and they don't seem to clash. I am not sure in our company of having a group of 500 people maybe 20% of them all make more than the CEO of the company that causes, those are the issues that we struggle with. Our core strengths are mining and whether it' s the operational excellence, environment sustainable development, dealing with governments running operation and we have tended to say those are our strengths, those are our core strengths we will stay with those. [Audience] And we continue to test that and I won't say that 5 years from now we won't come to a different decision we are at today. But those are kind of the arguments that we go back and forth in making those decisions internally. I think- [Audience] It's a very good question so the Dutch Disease issue. What we did when we went as we were working with the government, we helped them go to places like Chile, Alaska, Canada, which I think is managed, there are resource country but they suffer from it as well. I mean you see there what's happened to their currency. When I lived in Australia the Aussie Dollar was 50 cents to the US dollars, it's a parity today. So they do get impacted by commodity pricing and swings, there is no data about it. But what we try to do is take them to places that have managed it well and so that they could learn upfront because they will suddenly get an influx of money and let's be I was going to say being politicians I don't care if you are a Mongolian politician or US politician it doesn't really matter. Your instinct is they are going to use it to get reelected next time because they have very short term horizons and so we have tried to work with them to set up schemes like Alaska has or Chile has actually done a very good job where they have based their government spending on what they consider a long term price of copper, moving coppers above that. They put it all into their rainy day fund and when it's below it they are not afraid to draw from it so they help manage that. But it' s still going to have an impact and you just try and help work best that you can that they can set up mechanisms and institutions that help manage it. [Audience] No we know we don't do hedging other than in very specific circumstances. If we have a very large capital spend over a short period of time and when I say short over a year or two or three we may hedge that large capital spend so that we don't get significant spikes but over long periods we don't hedge our operations either from a commodity or currency. Our customer, our shareholders buy into our company for commodity exposure to commodity prices so we let them take that. And from a currency perspective our view is and it largely plays out is that currencies are countered on commodity price and so as prices come down currencies become less valuable and the cost go down in US dollars and so it's kind of an offset to lower commodity prices. Our costs go down and when prices are higher our costs go up but margin wise make a lot more money. [Audience] Yeah, it's an interesting question I did want to talk about careers for a minute but we are kind of running out of time. I guess I would say from that perspective is as you enter the workforce, have an idea which may evolve over time of what you would like to do or where you want to go. And without being pushy and without being you know the moment you get a new job don't start talking to your boss about what the next job is, do your job, do a good job but don't let it go forever. I believe it is very important and I as a leader I think it's very important for me my most important job is managing people. I will say something that is true but probably not very popular I don't do any work. And people over in the organization probably love they hear me say that. I do work through people that's the only way I get at where you know when you get to a certain point it's usually around in the US system what I would refer to is around that vice president level in an organization. Everything you do is through people so managing people is very important, so both sides of that, first the employee. I have been not aggressive but I regularly through my career had conversations with my boss about how I am doing, what are my expectations and do they meet your expectations. I think I can do X, Y I was going to say Z I will say Z, do you think I can do that and if not what do I need to do to fill the gaps? Can I work on projects, can I do this, and as long as I word I use is alignment if there is alignment in between you and the organization that's great you are working in the right path. If there is not then you have to figure out how you are going to fill those gaps and if your view of what you can do in the organization's view is different and you can't bridge that gap then you are going to have to decide am I okay with that and is that where I will be and if not then you may have to move some place else. I mean I think those and I can use a few experiences that mean when I was in working in London for the first time I was the head of our financial planning analysis and I came to understand how important understanding and working in Australia was in our company and I said I would really like to work in Australia. I went and talked to my boss about this one. A month later it just so happened, a job opened in Australia which was perfect for me. I ended up moving to Australia about 3 months later. I got that experience which was very important. I had a very similar experience before that, my job before that where I had only been in the job for about a year. I talked to my boss I said listen I don't want you to wonder if a job comes up, is he interested in going and working in London, I said I am. If I am opportunity comes up in London I am interested in it. I know I have only been in my job for 14 months I am now looking for it today. I am not kidding you within the month he called me up and said there is a job in London do you want to go, and I went to work in London. And so I think it's very important that you do that. I had a very similar experience when I went from being a CFO to a CEO of one of our business operations, where I had somebody that mentored me and helped me. The other thing is from a leader so as you become a leader one of the key things is managing people and it's one of the hardest things you will do. It's easy when people are doing well because it's easy to work with them, to praise them, to reward them when they are doing well. When they are not doing well it sucks, it's the hardest thing you will have to do, but you have to do it. And so you have to treat people with respect, you have to treat them with dignity but you have to work with them to try and turn them around. If they are not working out what are the reasons, what can we do to help fix it? Sometimes that's successful, sometimes it's not and when it's not successful I am not trying to sound like an overt but when it's not successful if you have people that are not carrying their load on your team it will only drag you down and the rest of your team and you can't accept it. And it's one of the hardest things you have to do as a leader you don't want to do it you don't want to face up to. So as an employee put yourself on the other side of that equation. If things aren' t quite working out quite often your leader won't tell you because it's not any fun. So that's why you sometimes as a person have to make sure you are keeping that dialog open. The more and more times that I have heard CEOs of companies talked they come back to this point over and over again. They were too slow to make decisions on people that were not performing well. And it's no fun and you always treat people with dignity and respect. And you try and help them to do better but sometimes it is just not a good fit and you need to move on from what people say. So that was I was going to talk a little bit about more careers but that was kind of a condensed. [Audience] We are realizing and we are starting to invest a lot more in our people systems it's probably an area that we haven't done the greatest job in the past. So what we have been spending over the last 6 or 7 years but even more so over the last couple of years, a lot more on training, mentoring, coaching and we are starting to really do a lot more on diversity both gender and national diversity as well. And we have been working on gender diversity now with some emphasis for about 5 or 6 or 7 years with some real concerted effort and we are showing some progress. When you look at national diversity where we are going in the future we don't have those people working in our company. So if you think we are going to go develop stuff in the Congo or in Guinea, how many Canadians do we have working in our office, very few. And particularly at levels that can engage with prime ministers, presidents and that language skills so we are very heavily, we speak, if I can say American, Australian and Canadian now and British English very heavy. We were starting to get more French because of the Alcan acquisition. We have very few, if you look at the scheme of things people that are from South America in our company and we have just made a decision that we are going to have to go out and hire 100 Indians and we are going to have to bring them into our operations and train them and hopefully over time you know as we develop operations in India we are doing the same thing with Mongolia. So you are just going out we are doing scholarship programs but we are hiring people out of university and bringing them into our operations and getting them trained. Because when we run an operation in Mongolia we don't want to run it by a bunch of White British or Americans to be honest with you. We want to run by Mongolians ultimately. What happens on day one because they might not have the skills but over time we want Mongolians or Indians or Guineans to run those operations but we are little bit behind that but we are starting, it's money and effort. [Informal Talk]