Physical facts do not care about a mood. A Singapore fund manager who once flew a drone over the Mongolian border says the minerals trade has forgotten that, and the Strait of Hormuz is teaching it again.
This is not a recommendation to buy or sell any miner, metal, refiner, or fund. It is an account of what Alex Turnbull told the Money of Mine podcast. He runs money from Singapore and writes a public letter, Syncretica. A man with positions will sound sure. His prices, his barrel counts, and his reactor timelines are his working notes, not a settlement. You can lose money. A story about tonnes is still a story until you have counted them.
Here is the only idea. The equity trades the poll. The metal trades the tonne. Turnbull’s line, which the hosts read back to him, is that physical and material realities do not care about your feelings. He uses it as a rule for research. On the front of the curve, where tonnes are moving now, or in credit, where they pay you or they do not, the fundamentals always matter. In juniors with no proof either way, he grants an “enormous vibes component.” The trouble in critical minerals, as he described it, is that the stocks have slid into the second category while the metals are still in the first. Spot prices, he said, are still firm. The funkier rare earths, yttrium and the heavies, are “still an absolute basket case of a supply constraint” outside China. What ran the equities was the Trump administration’s deals and talk. Now, he said, the whole space “trades tick for tick with Trump’s polling.” He does not think it should. Both parties in Washington, in his view, want these supply holes fixed. The market has branded the fix as one man’s project. When the poll sours, the bids leave, even if the shortage has not.
A drone, a desert, and a method
He opened with the story that shows the method. During China’s COVID shutdown, Beijing closed the border with Mongolia. Mongolia earns most of its hard currency from coal and copper. Cashmere and a long list of smaller goods do not move the total. Shutting that border, he said, nearly put the country into an IMF program. It ran out of dollars. One listed name, Mongolian Mining, had two tranches of debt and a stock, and was nearly wiped into a restructuring.
It was not clear what was actually happening at the gate. Turnbull was locked down in Singapore. He hired an out-of-work translator, bought a drone, and sent the person to the border. Ordering a drone in Mongolia at that moment drew questions from the security services, because other people were ordering drones to send toward the war in Ukraine. That, he said, got cleared up. The translator did interviews and flew the drone over the trucks. What was moving. What was stuck. Why. He paired it with satellite pictures. The south Gobi is a desert. Clouds do not hide the line of trucks for long. You could see when the gate started to clear. That, he said, was a leading indicator of three things at once. When the company would get out of trouble. When Mongolia would. And when China was throwing in the towel on COVID controls. Other trades hung off that last one.
The whole exercise, he said, cost about five thousand U.S. dollars. He has butchered ordinary trade orders for more than that. Not every odd job works. Some produce an edge you cannot get from a published table. He got used to satellite services that are, in his words, good and affordable. The hosts tied it to the quote. He will not take a number just because it is on a screen, unless he can check it to a standard he trusts.
That is the whole research rule, and it is small enough to keep. If the ticket is cheap and the question is physical, go look. A feeling about “reopening” is not a truck. A truck is a truck. The same cheapness, he noted later, is why a person with a jet ski, a few hundred kilos of explosive, and a guidance kit can now bother a shipping lane. The tool got cheap. The lane did not get wider. His drone and that jet ski are the same fact seen from two sides. A small device can now audit a border, or break one.
The poll took the bid
He then put the rule on the market in front of him. Critical-minerals equities are cold. The commodities, in his telling, are not. The gap is the story.
What drove the shares was not only the spot price. It was Washington. Deals. Announcements. A mood that the United States would stand under the projects. The problem, he said, is legal, not geological. There is no mechanism in current U.S. law for a systematic floor price, a cap-and-floor, the kind of contract that lets a mine get financed. Bankers will not lend through an election they cannot model. They do not know what the rule looks like after the midterms, or whether any bill will pass. He said a bill has been entered in the House. He indirectly worked on the idea through Employ America, the think tank, which proposed an agency that could do caps, floors, and stockpiles. That legislation, he said, has not passed. So the shares trade on vibes, and the vibe is Republican polling. “Just in the toilet as it currently stands.”
He is a former restructuring and credit man, and he said those people are salty about moods. Here is the trap he named. When the equity window shuts, and there is no other policy that makes a lender feel safe, the supply hole does not get filled. Many of these companies are not, in his view, drowning in risky debt. The ones already in production “are plenty profitable.” That can be an opportunity. The scary case is the other one. China turns the taps back on, and the price “really gets drilled.” Without a floor, a lender is long a political decision in Beijing. Trading houses, he said, do not want the job. Glencore, Trafigura, “and the like” look at these markets and see something too small to staff. His example was gallium. About a thousand tonnes a year. He put the price near three thousand dollars a kilo, against a “normal” level he put near one thousand. At the normal price it is about a billion-dollar market. “Don’t care territory” for a big trading desk.
Australia, he said, has already moved. Changes to the export-finance law let Export Finance Australia write offtakes and floors, the tools he and others had argued for three or four years earlier. “Australia is fine.” Australia cannot hold up the whole market. The United States has to do something. Europe, he said, “will definitely have to.” Until then, a tonne of yttrium and a share of the company that might one day produce it are different objects. One is scarce. The other is a poll.
The strait is not a switch
He had written, about six months before the interview, a note on the Hormuz crisis that he framed in grim language. The hosts asked him to look back. He said he was wrong on a bunch of things.
The modeling habit, including work he has done with people at the Australian National University and people who have done it inside government, treats a body of water as open or shut. One or zero. That is not what has happened. He called the risk appetite of some shippers incredible. He also said the United States has defended a lot of vessels with more success than a simple war model allowed, though he thinks they are struggling more recently. The tools he listed were specific. Aircraft spotting launchers. Very high-powered radio-frequency weapons that, in his account, cook a drone’s electronics in flight and can still fit an IMO-compliant ship. Missiles and a Gatling gun, he said, do not. A lot of oil has gotten out. He is not sure how long that lasts.
What he did not walk back is the inventory. The world entered the shock with enormous oil stocks. Those have been run down. China came in fully stocked and has drawn hard in recent months. Will Beijing at some point say forget it and pay a much higher price. He raised the chance they eventually just pay, at a price he put up toward 200 dollars a barrel, rather than keep drawing. He thinks they will do everything they can not to.
The surprise, which he and the hosts agreed most energy analysts missed, was how far China would step out of the buying and live off stocks. He said he had written earlier about a “people’s central bank of oil.” Counting refined products, he found an anomaly. Oil in, products out, and a gap that was neither consumed nor exported. He put it near 200 million barrels of diesel, stashed where the visible data could not see it. That, he said, is what they worked through in the second quarter. They did not have to draw visible crude as hard. They cut refinery runs. Diesel was still around. A magic pudding. He thinks the pudding is gone. Runs are up. They are buying more crude. Even a hidden stock has a bottom.
Australia, if the squeeze lasts six or twelve months, is short the product that mines burn. He put the country’s diesel use around 600,000 to 700,000 barrels a day, and said Australia runs a gasoline surplus, so motor fuel is not his worry. Mining companies, he said, face a reckoning they have already started. Many moved fast to hybrid power at the site. Renewables, batteries, a little diesel left. Liontown was mocked at the time, he said, as a camp of hippies. “That looks like an act of genius now.”
The next argument is the truck, not the power station. Andrew Forrest, “Twiggy,” is very bullish on electric mining trucks and thinks it works. BHP, in Turnbull’s telling, has turned its nose up. He thinks the path of cost and battery density is at Forrest’s back, plus the dull engineering of when you charge. Run the trucks at night, when a renewable-heavy system may have cheap power, or charge in the day and carry fewer batteries. There is a lot of that work left. He thinks it is starting to work, and that BHP will probably regret the refusal. The hosts added the industry’s usual answer. Mining does not pay the trailblazer. It pays the fast follower. He did not really argue. He just thinks the follower’s window is shorter than BHP has priced.
Floors, fertilizer, and a memory Japan kept
Refining is the same shortage in a different building. He said people he is in touch with are modeling it. The Middle East expanded refining next to the oil, with cheap gas and, for what it is worth, cheap solar. A structural cost edge. China also built a huge amount, and not only in the state sector. The “teapot” independents, and petrochemical plants, expanded hard. China is not next to the oil and does not have crazy-cheap gas. It built anyway. Margins crashed around 2017 and 2018. Capacity in Europe shut, because if you are sitting there, staring at a rule that ends sales of ordinary cars in the next decade, and the margin already hurts, why keep the plant. He thinks policy now has to preserve some capacity on purpose, especially where the remaining supply sits a couple of maritime choke points away. His concrete suggestion was a floor. Reopen the Queensland refinery he called Lytton. Tell the operator the gross margin will not be less than about twenty dollars. The state eats the gap. Promise it for ten years. Then look again. He was offering a design, not announcing a law.
Fertilizer and sulfur come out of the same region, and they hit mines as well as farms. On nitrogen, he was less grim about the United States, which has production and is expanding it. Australia, he said, is lucky. A new plant he expects early next year adds incremental tonnes. Asia is “cooked,” and India in particular, because so much of that system ran on Qatari gas. India has to diversify, and to sign real offtakes. He said some Indian buyers do not have a great name for honoring those contracts when prices fall. That reputation is why they are stuck. Japan, which has long contracted for gas in a cautious way, is in his view pretty well covered.
He reached for a book to explain the difference. Michael Barnhart, a military historian, on how Japan prepared for the Second World War. A paranoid style. They never forgot a shortage. They have, he said, fortunately given up on taking over Asia. They did not give up the muscle. Rare earths. Energy. Gas, in decent shape. Liquids, “not so great.” Coal contracts with Australia, still part of the cover. “A lot to learn from Japan,” and from the trading houses that grew up inside that habit. Australia, rich in the ground, has not had to think as hard about a world where the chain is not secure. The strait is now giving that lesson for free.
Coal still clears. The data center may not.
Asked about coal, he did not give a slogan. He gave a switch. There is a level where gas and coal trade places in the power stack. He put it near forty on the European TTF gas benchmark. Divide by about three and a half and you are near fourteen dollars a gigajoule, where parts of the Dutch grid, and also Japan and Korea, start to switch. Thermal coal is having a run. How long depends on the war, and on the Asian and European winter. A lot of moving parts.
What he likes about coal, as a system, is that it does not break the way gas does. He said he had just published a paper with people at the ANU. A world model of trade paths, mines, and land. Shut the usual choke points. Hormuz. Bab el-Mandeb. Panama. The coal market still settles. In the Pacific, Australia and Indonesia supply, North Asia demands. In the Atlantic, Colombia and some of the United States supply, Europe demands. It does not shock as easily. It is dirty. It is carbon-heavy. LNG is the fragile one. He said more than 20 percent of that market had been in Qatar, and that slice is not available. Countries, he thinks, will start to pay up for diversity even if Qatari gas is cheap. Some from other new supply, West Africa, Brazil. The response he expects, when the war ends, is that Qatar comes out discounting “like mad” to hold share and to stop too much new LNG from being built. Gas prices, in that aftershock, go really low. That, he said, would smash coal “horrific.” The war is one event. The game after the war is another. Do not price only the siren.
On Australia’s own grid, where he said he has put capital, the picture is already strange. Coal plants down for spring maintenance. Some unusual outages. Overall, volatility crushed. The three-hundred-dollar cap contracts on the Sydney futures exchange have been hit, in his account, by the flood of batteries. Prices suppressed. Less solar spilled, because storage soaks it, so you get a bit more usable supply. Two questions he does not have answers for. When Snowy Hydro is actually finished. And how a single giant storage asset will bid, once it is online, compared with batteries owned by fifty or sixty different people. One stalker in the market is not the same as a crowd.
Data centers are the demand swing. Done in the right place, he thinks they can help. Put them where the grid is constrained. Add storage where solar would otherwise be stranded, unable to reach the coast. Demand on the system rises without a matching bill for new transmission, and everyone else gets a cheaper system. Done wrong, it is the opposite. And a lot of them may not get built. Credit is not cooperating. The IPO window for the new model companies is not cooperating. He looked at CoreWeave the way a distress analyst looks at a half-built mill. Some of these firms have assets that already spit cash. They could stop building and be fine. Some borrowed a lot and do not have much running. They may not finish. “We’re all mining guys. We know how this one goes. Badly.” Dispersion, not a single story. The cost of capital has jumped. He also sees pushback on early numbers around an Anthropic listing. A pause, he said, could be healthy, the way the mining build around 2012 was not. Everyone blew out capital costs at once because there were not enough electricians and engineers, so the price of the people went up and every budget missed. A slower tape lets the ecosystem breathe. It also kills the names that are only leverage.
If the hyperscalers, Amazon, Google, Microsoft, actually pause, his equity point was the reverse of the panic. They go from spending every dollar to throwing off cash. If you will not buy the stock, the company may buy it back for you. The pain sits with the half-built shell, the alligator that still has to be fed.
The efficiency shock that mining almost never sees
He is non-consensus, the hosts said, on how much power these centers will keep needing. Two years ago that view was more speculative. Now he pointed at results, including a company he was a first investor in, and two others he called Opticor and Posatron. He thinks compute can get ten to twenty times more energy-efficient per operation, over about two years. A productivity shock.
His analogy was the last telecom bust. People laid glass. Then multiplexing lifted what that glass could carry by something like sixty-four times, in a short span. The academic work was visible from about 1990 to 1995. It hit the market in the late nineties. Demand for bandwidth exploded. Capacity exploded faster. Dark fiber. A hideous overhang. The same shape, he said, can hit data centers. Shells half built. The site down the street, already finished, suddenly does twenty times the compute. Why should the new shell exist.
Mining almost never does this. You do not build a copper mine at 10 percent recovery and then, across the whole industry, jump to 80 percent in two years. He granted one cousin. In-situ recovery in uranium, which moved the cost curve. Mostly, ore does not get twenty times easier in a product cycle. Chips do.
He explained the physics without a lab coat. Switching a circuit makes heat. Flip a light switch fast enough and the wire cooks. A laptop clock sits near two gigahertz because faster, in his account, melts the board. Move the work to light, to lasers and waveguides, and the pulse does not make that heat. He talked about clocks jumping toward sixty or a hundred gigahertz. You cannot get 64-bit precision that way. You do not need it. The models, he said, now run at four-bit or eight-bit numbers, and they stay accurate enough. The big operation in these models is matrix multiplication. Doing that without copper circuitry, and without the cooling plant that copper heat demands, is a change in the energy load of inference. The hosts heard the warning they already knew from batteries. The industry built lithium hydroxide plants for a cathode chemistry, NCM, that was not the future. Capital locked to a scenario. The scenario moved.
Copper still looks like the old silver. Uranium still looks like a poll.
Asked where that leaves a metal, he did not abandon copper. He said it still looks like silver did a few years back. Bad supply. Strong demand. The ways to use less of it are a little way off, not here. In batteries you can thin the foil, from around five microns toward two, and sputter it onto a plastic film. Yield problems remain. He nodded at Robert Friedland as a relentless salesman of copper names, and still called the supply side “pretty unpleasant.”
He was less kind to the demand story that arrived in the last two years, the data-center surge. If compute gets radically more efficient, a lot of the power gear sold into that boom can fall “a staggering amount.” Caterpillar, he said, has ripped on diesel generator sets for data centers. That is a last, worst way to make power, and a bad one with diesel where it is. The same motors, he said, go into the electric trucks. If trucks electrify, that other market thins too. The generator trade, in his view, can get “hideously oversupplied” quickly. Ask him who is in more trouble sooner, Caterpillar or the world’s largest copper mine, and he picks Caterpillar. Different names, different torque to a slowdown. A copper shortage is not a diesel-generator shortage. Do not buy one because you believed the other.
Uranium, he said, is “also very U.S. administration vibes driven.” Some of the new designs are interesting. China’s high-temperature gas reactor works, in his telling, and can throw off heat at 600 to 800 degrees, hot enough to matter for calcining lithium or for cement. Those are big markets. They are still in a qualification stage, not a demand shock for uranium this year. What hits uranium demand quickly, he said, is more ordinary. How much nuclear Japan restarts. How hard Korea runs. How many more AP1000 reactors actually get built. On that, he is “a bit more constructive.” The hosts noted Cameco’s plan to list Westinghouse in its own vehicle, around year-end or early next year, which would give that builder a separate balance sheet and outside money. He said the AP1000 works, and the United States should be building more now, while the people who built the Georgia plants are still a crew. If they scatter, you lose the learning. Snowy Hydro has taken forever. Italy, Austria, and Switzerland pour concrete every year and hit their numbers, because it is routine. The moment after a fumble, he said, is when you should lean in. You have just paid for the lesson. Whether anyone does is the question. The workforce that just learned how not to screw it up is the asset. The poll is not.
Lithium: the balance sheet healed, the rock did not get younger
He has been in lithium a long time. Prices, he said, are a bit lower than inventories versus demand would usually justify. Plot that relationship and you normally get a curve that bends hard. It is not doing that. So the space, in his view, is good value, and every day of expensive diesel and gasoline is a good day for electric-vehicle sales. Storage demand in Europe is robust. Australia’s trick, flat or falling power prices through a gas shock, he credits to “a boatload of batteries.” He expects southern Europe to copy it.
The more interesting question, for him, is not the spot quote. The majors, Albemarle, Ganfeng, Tianqi, now have pristine balance sheets. They have delevered. What gets picked up, as a bolt-on, are assets that cannot raise project finance on their own in this market, but can keep a big system fed. He is looking at smaller brine names. Eramet’s Centenario, in Argentina, had a rough start. He said it works now. Costs are good. The units are compelling. Eramet itself was nearly distressed, a producer of manganese and of nickel “in all the wrong places,” and the lithium looked bad too. Glencore, he said, gave them a large prepay and has likely done well on it. That is a good sign for the Argentine brine belt. Less diesel in the cost. Less power intensity than some marginal hard-rock tonnes. Australia is delivering a lot of next year’s supply from brownfield expansions of existing spodumene. He is not sure you can develop new hard-rock tonnes there quickly. A decent return, in his numbers, needs something around two thousand dollars a tonne for spodumene. Brine can live cheaper.
Would the hard-rock players buy brine. It would make sense, because the menu is short. Zimbabwe is “institutionally interesting” and a good way for a chief executive to get fired. Most other Australian spodumene has been picked up or spoken for. What is left, with workable metallurgy, is a short list of brine names. The hosts added James Bay as the other option. He agreed the geology is excellent. Patriot has a real project, and cesium besides. The infrastructure bill, he said, looks like Western Australia in the early 2000s. “Real money.”
The last cycle’s speed still shapes the deals. Albemarle nearly bought Liontown, the deal died, and within weeks the buyer was glad, because the price collapsed harder than a still-intact demand story seemed to allow. It bounced later. What made the crash nasty, he said, was debt. Smaller players had to keep producing to meet covenants. Nobody could choose to withhold supply. The space has consolidated. There is still wild supply, Zimbabwe among it. There is more price discipline, and more discipline about what gets built. He compared it to iron ore before 2016, a free-for-all of expansions, and then a more careful industry. Demand growth, in his scrape of electric-vehicle sales, is still blowing past the published forecasts, including in countries nobody had on the list. Greenbushes is no spring chicken. Mine life depends on the grade you assume, and it is shrinking. They will have to go buy something. The tonne is still growing. The mood is what crashed.
The metals you pull out of someone else’s circuit
Asked where incremental capital actually tempts him now, he did not say a new pit. He said metals you can pull out of refining circuits that already exist. Gallium. Germanium. Indium.
China, he said, has “helpfully” blocked exports of the resins used to extract gallium. The useful resins are specialty ones that do not get poisoned by the sodium in the liquor. Without them, you are changing the tires every week. Expensive, and not much fun. Other approaches exist. The bolt-on economics, at current prices, are the appeal. Spend on the order of twenty to fifty million dollars, and at these metal prices get most of the capital back in about eighteen months. Venture-style deals, and more structured ones. The vibe around the equities is off, for all the polling reasons already named. The spot price is “absolutely nuts.” There is a real market for bilateral offtakes. The big trading houses have decided they do not care. That combination is what he hunts. A spreadsheet that works, plus a reason other people will not touch it.
He was blunt about the test. You do not put serious money in the ground until you have run tonnes of the liquor from many suppliers and shown you can handle the organics, the vanadium, everything else. “Test the Jesus out of it.” If it works, these are good little businesses. The hosts mentioned the public hints from Alcoa, South32, and Rio Tinto about adding circuits to aluminum plants. He knows the history. Pinjarra once had a gallium attempt with Rhône-Poulenc, now part of a larger French group. As soon as they turned it on, he said, China dumped gallium and the plant died. The room laughed at the idea that Beijing would do that again. He does not think the joke is a strategy. China has gotten so much use out of the rare-earth button that it will keep pressing until the button stops working. It stops working when the supply actually arrives. And these uses are growing. Gallium in power electronics. Germanium to dope the glass in photonics. Indium across semiconductor steps. Two ways to make money, in his split. Build the spreadsheet and the numbers work. Or ask why everyone else is uncomfortable, and decide whether you can get comfortable. Lithium used to be a broken little market run by a couple of Japanese traders. Then a house like Glencore opened a desk with a sharp person on it, and the edge died. The exotic metals can stay good for a while. Competition comes.
What a reader can actually use
You do not have his satellite account or his translator. You can still refuse to trade the poll as if it were the pit.
First, separate the share from the shortage. If yttrium is tight and the developer’s stock moves with a campaign poll, you do not own the tightness. You own the campaign. A floor price that is not yet law is not a floor. Australia having the tool does not finance a mine in Nevada.
Second, ask whether the constraint is a tonne or a mood. Diesel in Australia is a tonne. A half-built data center is a capital structure. A copper mine does not become a bad mine because Caterpillar sold too many generators. A generator company can. Turnbull’s useful habit is to name which object actually breaks.
Third, remember that China has used the dump before and he expects it again, until the outside circuit works. A gallium plant that cannot survive a price war is not a supply chain. It is a press release. The resin ban is the tell. Beijing is not only selling metal. It is selling, or withholding, the tool that pulls the metal out of someone else’s liquor.
Fourth, do not price a strait as open or shut. Oil is still moving, under escort, at a pace he thinks may not last. Hidden diesel stocks delayed the pain and did not cancel it. The aftershock he fears is not only a higher price. It is a later glut, if Qatar discounts to kill rival projects, and coal gets hit on the way down. The shortage and the glut are one story with a gap in the middle. The gap is where people overpay.
What would make this reading wrong
The reading is wrong if U.S. legislation actually passes and lenders start funding on a floor. Then the equities were early, not confused, and “tick for tick with the poll” was a description of a waiting room, not a law of the sector.
The reading is wrong if Hormuz stays half-open for years, China still has diesel he cannot see, and the “magic pudding” was larger than the anomaly he counted. Then the refining-floor argument is a hedge against a shock that keeps getting deferred, and Australia’s diesel bill stays a headline rather than a mine closure.
The reading is wrong if photonics does not deliver anything like a tenfold cut in energy per operation. Then the data-center power demand is more real, Caterpillar’s generators have a longer life, and his copper caution about efficiency was a lab hope. The reverse error is also live. If the efficiency arrives faster than mines can notice, every demand model that treats today’s power draw as permanent is the dark-fiber trade, wearing a hard hat.
The reading is wrong if brine costs are not lower than he thinks, or if Centenario’s improvement does not last. A prepay is not a reserve. A two-thousand-dollar spodumene hurdle is his hurdle. A different cost curve makes the M&A menu look different, and James Bay’s infrastructure bill might be the one a major prefers to pay.
The reading is wrong if you hear “test the circuit” and buy a gallium story that has not run the liquor. He was describing work, not a ticker. China dumped the last Western attempt. It can dump the next one. The edge exists only if the resin problem is solved and a buyer will take the metal when Beijing turns the tap.
The idea, once
Alex Turnbull came back to a mining podcast and declined the vibe. Two years ago he had said data centers were the new electric-vehicle story, and that silver could get silly because solar had locked in demand and nobody had the money to engineer it out. The hosts reminded him. Silver was near 28 dollars then and touched 100 in January. He did not spend the hour collecting that trophy. He spent it on counts. Trucks at a border. A strait that is neither open nor shut. A diesel stock that was real until it was gone. A poll that is moving the shares while yttrium is still short. A floor price that Australia can write and Washington has not passed. A truck fleet BHP does not want to electrify. A data center that may need a fraction of the power the shells were built for. A copper market that still looks tight, and a generator market that may not. A lithium industry that has paid down debt and has not found enough new rock. A gallium circuit that pays for itself in a year and a half, if you can get the resin, and if China does not dump the day you switch it on.
Physical reality does not care about your feelings. The equity trades the poll. The metal trades the tonne. Only one of those is a truck.