Russell Fountain, Chairman of Finders Resources Ltd, has travelled the world, from Papua New Guinea to Fiji and America as a geologist.
He didn’t know what geology was before he enrolled to study at Sydney University in the 60’s, but after choosing it because someone told him it was a good, outdoor job, he loved it from the moment he started.
In the first of our monthly Personality Profiles, Russell talks to Jessica Burke about some of the changes he’s seen and where he thinks the mining industry is headed.
Jessica Burke:You’ve been all over the world doing this, what was your favourite place?
Russell Fountain: I liked working in Indonesia, it was nice working out of the US, it’s not somewhere I would like to live but it was an interesting job working from there and seeing the big picture.
Fiji was a great place to work, I’m still associated there, I’m a director of Geopacific, which we originally helped late with Finders, we’re now out of that but I’m still a director and that’s been a great place to work too.
JB: Did you always see yourself coming back to Australia?
Yeah, I’ve always kept a house, I bought my original small house in Sydney in 1968 and I’ve always kept a foot in the door in Sydney and basically kept working out of here?
JB: What do you think was the single biggest change to the industry you’ve witnessed in your time?
RF: I don’t know about single biggest change, but there’s been a huge evolution and change in the nature of the exploration business with all the consolidation that’s gone on.
All in all in a forty year period, they keep saying that there’s been 10 good years of exploration on reasonable budget when things were going well, ten fairly ordinary years and 20 really crap years when there was no money.
Most of the current boom – touch wood – might last a little longer with the rise in Asia and the real deficit of exploration that’s been done in the last 15 years.
It’s starting to pick up again now but there’s a real deficit of experienced people and most of the easy stuff is gone, it’s really deep, high cost exploration all in very dodgy places that you’ve got to go to get the breakthrough so the game is a lot tougher and the world is going to keep needing minerals so the outlook for commodities as far as they can see is pretty good.
JB: Is technology keeping up with the need to get to those difficult deposits?
RF: I don’t think so, I think there have been big advancements in geophysics and stuff like that but really it’s not up to the challenge as a general rule.
Things are pretty hard to find and if you look at the real supply constrains on gold and nickel and copper, I mean, copper’s a beauty but we’re not finding copper at anything like the rate we’re using it and so the only real major new discoveries that have come are in Mongolia and are a kilometre deep and more than a kilometre deep in Arizona where people haven’t bothered to look before because it’s too hard and too difficult.
Or places like the Congo, there’s a lot of copper in the Congo.
How big will the impact of mining in places like Mongolia and the Congo be on Australia?
The only thing that will happen, is that, see it’s a real balance provided the government doesn’t change the rules and scare people away too often from exploring and you’ve got a balance where.
In the Congo you could probably guarantee that you could find some copper reasonably easily, you can’t guarantee you could mine it or get it out effectively under the rules.
In Australia, finding anything is very very difficult and very expensive now, but if you find it there’s a good chance of developing it so there’s this huge tension all the time as to whether to bite the bullet and go somewhere really hairy and find something and see what you can do to make it work, or whether you spend a whole lot of money on very high risk exploration in Australia.
But for a country that has its bigger percentage of its wealth in mining at the moment, the amount of support for the industry given by the government is zero.
JB: What has been the most interesting thing you’ve experienced?
RF: I guess the intellectual challenge of looking for things has always been the thing that fired me up but the whole basis of being in the exploration business is that you have to assume that all the dates you’re looking at is flawed and someone has missed something in it and that’s how you make a breakthrough.
It’s also interesting looking back now at some of the people you’ve hired straight out of uni and have now gone on to be very successful in the business, that’s been a very rewarding side.
A lot of people who started as junior people have ended up in very senior positions around the world.
Are you an advocate for getting younger, junior people into the industry and giving them opportunities?
I think that basically the training that you get in the exploration end of the world, unless you actually get exposed to good project geology early in your career, which I was very lucky to do, it can be a lot of people spending their first five years or so just running up creeks collecting soil samples and doing some fairly mindless work, which really can destroy them being useful there after.
So I think it’s much better to get a young graduate and train them up on something good than take a lucky dip with people.
JB: How do you think the mining industry can overcome the skills shortages?
It’s getting progressively harder because there’s a real closed loop at universities that are dependant on outside funding to get their critical mass, and their teaching up, with all the consolidation that’s been in the industry, there’s only a few companies around who can give that funding.
The front end of the exploration business has worked as a sort of vicious circle and it’s very very hard to get back and presumably once things start to run out and the price of things getting high, gradually it will build up, but it takes 5 years to train anyone to any level of competence along the line.
There are a lot of old fellas like me who would like to retire but we can’t.
JB: Do you think that’s one of the biggest problems facing the mining industry?
RF: Absolutely, in exploration, just in teaching, there’s not many people left to teach it, you know, there’s big gaps in the industry when nobody really went into it.
In the 70’s, about 72 to 1980 there were probably 9 new employments, and then it picked up in the eighties and again in the early nineties and comes up again, it’s a very very wavy thing.
People say there might be a new paradigm coming now and one hopes there is, but then something happens like happened in Japan, that can affect the source and really affect the money you rely on.
JB: How do you think the mining industry can overcome the skills shortages?
RF: It’s getting progressively harder because there’s a real closed loop at universities that are dependant on outside funding to get their critical mass, and their teaching up, with all the consolidation that’s been in the industry, there’s only a few companies around who can give that funding.
The front end, the real R and D of the exploration business, it’s worked as a sort of vicious circle and it’s very very hard to get back and presumably once things start to run out and the price of things getting high, gradually it will build up, but it takes 5 years to train anyone to any level of competence along the line.
There are a lot of old fellas like me who would like to retire but we can’t!
JB: Where do you see the industry in 20 years?
RF: I will be very lucky if I can still see anything 20 years from now!
It won’t be hugely different from what it is, it will be a lot safer but you’ll still have to go out.
The thing is you’ve got to go where the stuff is so it will still be very decentralised and it will happen wherever things happen.
It will still need people who are prepared to get out and get their hands dirty to make it work, so it’s hard to see any really fundamental changes, you’ve basically just got to dig it.
It will probably be much smoother and less messy and probably [there’ll be] less dangerous ways to do it but it’s like the military, nothings changed in 2000 years of having wars, you’ve still got to occupy the ground and someone’s got to be there to do it.
The fundamentals basically can’t change.
JB: Where would you hope Finders would be in 20 years?
RF: A lot bigger and robust than it is at the moment.
There’s nice growth paths, if you look at Kingsgate and things like that, I’ve seen them go from a gold mine they couldn’t get funded back in Thailand in the middle 80s or 90s.
When they got that together and got it working, they’ve just done their first big merger, so there is a growth path there and the one thing about the consolidation at the top end is there’s the big four and then there’s some medium stuff and stuff that’s so small the big people couldn’t see.