The world is hungry for lithium and growing ever more ravenous.
In a market quickly becoming insatiable, Julian Ford, CEO of Riversgold Ltd (ASX:RGL), believes Western Australia has the answer to the impending battery mineral famine.
“The lithium boom in Western Australia is going to make the iron ore boom look like a Sunday afternoon picnic,” he said.
“There's a lot of lithium to be found in Western Australia. I think – as long as we don't end up with unbearable green and red tape – we will continue to dominate the world's lithium supply for the next five years.”
Riversgold was once – as the name suggests – a pure-play junior gold miner.
Gold might be forever, but commodity cycles certainly are not, a fact Ford was fully aware of when he was asked to join Riversgold by a major shareholder last year.
“The risk-reward and the exploration cost for gold just weren't there for us as a junior,” Ford said
“We were out exploring under salt lakes, and that’s for the big boys, not gold junior miners.”
A chemical engineer by background, Ford had spent the two years prior to joining RGL in North America and Europe, developing a high-purity alumina project and targeting the emerging electric vehicle market with his previous companies, Groupe AEM Canada Inc and Gulf Minerals.
During that time, he was deeply involved in the EV market in Europe and North America, with a particular interest in Battery Megafactories being built in the West to supply these markets.
“I think I was ahead of the curve in understanding the impact that these Megafactories would have on lithium demand and the resultant lithium boom. I approached the key stakeholders in Riversgold and I said, ‘Look, I’d like to get into lithium’.”
Julian onsite beside historical mine workings
In this article:
- People, project, politics
- It’s a hard rock life
- Decisive decision making, calculated risk
Ford began his career in South Africa in the 1980s but was unable to reconcile his core values with the political and economic landscape at the time.
“I didn't like mining at all in South Africa,” Ford remembered, “Both culturally and politically it was terrible. So, I voted with my feet and came to Australia.”
He grew up in what he describes as a ‘relatively unsophisticated’ background; a sixth-generation farming family descended from British settlers who arrived in South Africa in 1820.
In 1990, he became a Commercial Engineer for Alcoa (NYSE:NYSE:AA), one of Australia’s biggest aluminium producers, with an ambition to get into merchant banking, once Paul Keatings “recession we have to have” had ended.
In 1993, he joined Trevor Eastwoods as the “Boy Friday” in the nascent ASX-listed Avatar Industries Ltd; where Trevor had a plans to repeat the success he had had in transforming the farming co-operative into the goliath that is Wesfarmers (ASX:WES) today.
It was a baptism of fire, and a very steep and but educational learning curve. Ford learned the ropes and began to build a network of good connections, but quickly discovered he wasn’t a great fit, culturally-speaking, for merchant banking or broking.
“I was retrenched and unemployed for six months, did a lot of navel gazing, and went back into mining,” Ford said, “As soon as I got into the junior mining sector, I absolutely loved it.
“It was kind of like being back on the farm. I like the people; I like the values and being able to get my hands dirty, literally.”
He says the can-do attitude, spirit of entrepreneurship and dedication to the craft is what sets junior miners apart.
“There are three core pieces in this business: the project, the politics, and the people. You need all three of those to be in alignment to have a successful exploration company,” Ford explained.
“Western Australia is just an amazing place to do business. The business environment specific to junior explorer’s we have here is extraordinary.
“The two projects we have are potentially world-class in my opinion, and then politically, I think this is the only state in the world that you can take a grassroots project into production within three years.”
Riversgold has the people, and it has the projects.
With lithium deemed a critical mineral by not only our own federal and state governments, but by the US and great swathes of Europe as well, the politics are only looking better and better.
It’s a hard rock life
The broader international economy has been using lithium batteries for many years; they power our smart phones, our laptops, our digital cameras, our pacemakers.
Electric cars, too, are nothing new; the very first car in 1828 was a battery-based electric vehicle (EV), but they were too expensive once mass production of cheaper combustion engines took off, and so they fell out of favour.
It wasn’t until the two technologies were combined that they began to dominate the automotive industry.
Now, as most of the international economies scramble to divest from coal, gas and oil – partially due to climate change and decarbonisation, but recently strongly influenced by skyrocketing energy prices – lithium batteries have become essential to energy sovereignty and security.
Demand for the mineral has roughly tripled the price of lithium carbonate in the past year; a strong sign that the industry is facing an imminent supply shortage.
The International Energy Agency (IEA) believes this supply scarcity will make itself known by 2025, unless enough investments are made to expand production.
“EVs are set to enter a new phase in which raw material and component supply come to the fore of policy-making as critical elements of the clean energy transition,” IEA clean transport analyst Leonardo Paoli and head of energy technology policy division Timur Gül wrote.
“For the first time, supply-side bottlenecks are becoming a real challenge to the electrification of road transport and are adding to traditional demand side challenges.”
Best described as a trouble shooter, Ford relishes these kinds of challenges; he prides himself on being someone who addresses complex problems and breaks them down into actionable solutions.
“My view was that there was going to be a huge shortage of lithium for at least five years, and while hard rock lithium might be a more expensive source of lithium to produce lithium product than brines, they can get into production a hell of a lot quicker than anywhere else in the world,” he explained.
“In my mind, the only place capable of fixing the short-term lithium deficiency globally, is Western Australia.”
Unsurprising, then, that Riversgold chose Western Australia’s Pilbara region to target its lithium exploration.
The company currently has two Lithium project target areas; the Pilbara where the Tambourah Project is the most advanced, and the Southern Cross greenstone belt, where one of their projects sits alongside Wesfarmers and SQM’s Mt Holland Project.
Riversgold's Pilbara project locations
At Tambourah, RGL has now identified more than 40 lithium-prospective pegmatites to target and put drills to ground, just six months after acquiring the project.
Decisive decision making, calculated risk
That kind of decision-making acumen isn’t easy to come by.
Ford has invested nearly 40 years in his mining career, obtaining two Bachelors (Chemical Engineering and Commerce - Operations Research and Economics) and a Diploma (Business Management) as well as writing papers on Mining Risk Analysis and Logistics Optimisation in that time.
One of his crowning achievements was a set of joint venture projects completed as managing director of Zambezi Resources, a mining company operating in Zambia, Mozambique.
Ford successfully completed JVs with the big boys of mining; Glencore (LON:GLEN) for copper, Rio Tinto (ASX:RIO) for uranium, and BHP (ASX:BHP) for Nickel before the GFC upset those plans.
Ever the entrepreneur, he saw an opportunity in the financial bloodletting that followed, moving into a corporate advisory role where he guided companies through restructuring their business and negotiating solutions between creditors and shareholders.
“By nature, I'm a controlled risk taker,” Ford explained.
“I understand risk and I'm perhaps a little bit boring, a little academic in my thought process from being overqualified, but this does add discipline; hence I’m very comfortable taking calculated risks.”
It was in that problem-solving capacity that he first became involved in Riversgold, originally putting together a Deed of Company arrangement in 2016/17 for a business associate. He was eventually drawn back into the fold in 2021.
As a junior miner, Riversgold’s core mission is to create value for its shareholders, but Ford believes that must be done with the utmost integrity, and with a keen focus on the environmental, social, and governance (ESG) impacts.
“I think the best thing we can do as junior miners in Western Australia is to supply the world with the lithium it needs to enable the EV revolution, with as little environmental impact as possible.”
Those aren’t just words for Ford; he’s taken hard hits in service to his values.
“ESG is something very, very close to my heart. I ran my private company, in the four-year period to July 2021.
"When I started there, it was a fundamental that I agreed on with the then chairman of the company and major shareholders; that we'd apply the highest ESG standards.
“When those things didn't happen, I sacrificed a lot to pull the pin.”
Pulling multiple companies’ bacon from the fire in myriad financial, operational, and regulatory disasters taught Ford a very important lesson, reinforced by the success of Trevor Eastwood, of Wesfarmers fame.
“Never forget, the company doesn't belong to you, and you can't take your shareholders for granted. You only get a reputation once.”
“Don't screw it up.”
With the right people, projects, politics and principles in place, Ford and the Riversgold team are well placed to lead the charge in the race to supply vital lithium to the world.
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