One on One: Kingsgate Consolidated’s Gavin Thomas [Video]

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Gavin Thomas is the managing director of Kingsgate Consolidated, but he identifies first and foremost as a geologist.

It is the university course he trained in and what he believes Australian educators and governments need to be working harder to train more young people in.

Thomas sat down with Jessica Burke to chat about the most interesting things he has seen in the industry, where he sees it going and why his mother is his personal hero.

Jessica Burke: What was your progression through the industry to where you are now?

Gavin Thomas: Well, that’s a forty year story. I’ll make it very fast. Young geologist, came out got excited through my mother in fact, she was a geologist way back in the 30’s and got me excited in that and my father had a few gold and tin mines and then it was sort of something that I always liked and did geology. Came out at the very end of the nickel boom in the late 60’s early 70’s and there were no jobs around, absolutely none.

I went to Papua New Guinea as a field assistant and fell in love with the country, I’ve lived and worked there for 27 years since that time and that’s where I learnt how to take geology, you saw raw geology in the making up there and I’ve taken the lessons I’ve learnt about how wild Mother Nature can be and how quickly things can happen and used that all throughout my life.

JB: What is the single biggest change you have witnessed in your time in the industry?

GT: Respect.

JB: Respect?

JB: Respect for miners.

GT: So it’s gone from little respect to….

GT: Forty years ago, mining was that funny little industry over there. A lot of people made money on it, but they were Pitt Street miners, in terms of what I see now, is the average man in the street, where people say “what do you do?” and I say I’m managing director but I am a geology is what they do, and they start talking about mining, geology.

You know, it’s come from being an industry that was distant to one that is now part and parcel of the Australian society.

JB: What do you think is the single biggest problem facing the mining industry?

GT: We as an industry and the government have failed in educating an adequate amount of Australians to move the industry forward.

There is an absolute ‘F’. Failure on both sides, government and the industry.

JB: What is the most interesting thing you’ve seen in your time in the industry?

GT: The most interesting thing I’ve seen is probably how Australians have gone from a humble background and quite frankly been, in my view, the most highly professional group of international managers at the operating coal face.

It’s just been wonderful to see how we, as a nation, have progressed from being second rate to being world class.

JB: Do you have a personal hero?

GT: Oh, I have lots.

I like the guys that have taken a pretty average asset and are creating something big out of it.

That’s what I like to do, I like taking junior companies that’s valued at under ten million dollars and creating billion dollar companies out of it.

The men I admire…let me think. Let me pick an offshore one and an Australian one.

JB: It doesn’t have to be a man…

GT: Well, unfortunately, women are coming in the mining industry, if you want to go back, unfortunately there was…well, hang on; I said my mother influenced me a lot.

She was denied the university medal for geology at Sydney because she was a lady.

It was given to the other guy, but anyway, Australia and the world have moved a long way.

JB: So therefore was your mum your big influence, because she got you interested in geology?

GT: Oh, its part of the genes isn’t it?

Every person who thinks their mother isn’t s hero, isn’t a human being as far as I’m concerned.

But in terms of mining…let’s pick Australia.

Arvi Parbo for one.

He took on incredible challenges and survived.

That’s from the mining side of it, there are many men and ladies that I do admire.

But we’re not here for ten hours.

Arvi Parbo understood what was required, he came to Australia from Estonia, worked on the coal face and came through to manage Western Mining, and that’s a grand, grand story.

Just one of overcoming adversities and coming through all the way to the top, he did it because of his strong iron will and his ability to make the right decisions.

JB: Can you tell us where you think the gold mining industry is going?

GT: Well, the gold mining industry is facing a lot of challenges, at the moment, you look at where gold price has gone, everyone thinks we’re in a massive hole.

If you go back to look at the reality of timeframes of what happened to gold from 1970 to about ’95, to this current boom that we’re in, it really started in 2000.

On a model of times, we’re still well below where gold went to back in the 70’s and 80’s, so I think there’s still a long way to go.

Gold, for the last five years approximately, we have been working on a de facto gold standard, people are just coming to realise that right now.

If you go and look at the US dollar, people do not believe in fear countries, currencies, paper money, they are looking for hard assets.

So properties and commodities are where they’ll head.

We are essentially living in a world of negative real interest rates.

We’re one per cent, maybe two per cent, but in reality the world is inflating itself at over two per cent.

With the way the world’s going, there’s increasing inflation, we’re having higher commodity prices, the petrol increases are going to come through and we’re looking at probably a four per cent inflation rate around the world.

If that is the case, people will not be going to paper; they’ll be going to gold.

The bonds, if you look at the markets around the world, the bond market is about 92 trillion, equities about 42 trillion and gold is one trillion dollars.

If you doubled inflation, you will cut the value of those bonds by ten per cent or over nine trillion dollars.

The world will not allow that to happen, they will go and find something else to invest in, we’ll see bonds being less preferred and hard assets being preferred.

And the good thing about gold, it is one of the very few instantly fungible hard assets.

So I see a long term future for gold.
 

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