Mike Young: Energy and Minerals Australia

ONE OFF THE WOOD: Better known for being the driving force behind successful junior iron ore miner BC Iron, Mike young has just been appointed as Chairman of uranium exploration play Energy Minerals Australia (ASX: EMA).

 

You have recently been appointed as Chairman of Energy and Minerals Australia. How did that come about, was it a case of them knocking on your door or vice versa?

A bit of both, really. Julian Tapp, who has recently been appointed Chief Executive Officer at EMA, and I have known each other for a long time, mainly through having worked on the Nullagine Joint Venture.

Julian, of course was on the Fortescue Metals side of the fence and I was obviously with BC Iron.

We first met in 2006, before BC Iron had even listed on the ASX.

Julian is a person you trust and want to work with?

From my experience, he has always been a fair-minded person to work with who is extremely intelligent.

He holds a Phd in Economics and is a great strategic thinker.

You certainly raised a few eyebrows by making the change from running a successful iron ore company, a commodity you are obviously passionate about, to tackle the uranium market. How do you see the future for uranium?

I do like uranium. I think uranium is a commodity for the future, especially in terms of providing clean base-load power, unlike coal and gas.

I also like the potential offered by the company’s Mulga Rocks Deposits, located near Kalgoorlie.

Mulga Rocks deposit uranium and base metal mineralisation. Source: Company announcement

Julian and I both agree this project has potential to be developed to become a uranium operation; however one of the key things about uranium projects is the approval process.

As he proved while at FMG, the best person I know when it comes to applying for the granting of approvals is Julian Tapp.

That’s why the two of us decided this company would be a good fit for us. We both like uranium and we both feel there is a good future for uranium.

Has the recent approval of Toro Energy’s Wiluna project also provided some impetus behind your decision?

I suppose if you wanted to draw some parallels you could say Toro is the Atlas Iron of the Western Australian uranium industry and we are going to be like BC Iron in that sense.

They’re leading the way and reinvigorating the junior uranium sector in the state.

Uranium producers are still quite bullish about the commodity despite its recent fall-back, John Borshoff of Paladin Energy is a great example of this, he is constantly telling people the demand and price for uranium will increase due to the lack of current global production.

The price of uranium has to go up. I don’t think you can continue to rely on coal and not have significant, detrimental health effects.

People have spoken of a significant number of people in China with significant respiratory illness caused by the particulate pollution.

The only other viable alternatives are hydroelectricity or gas. You’re not going to get base-load power from wind or solar anytime soon despite the hyperbole.

Have you received any less-than-positive reactions from people on your move from iron ore to uranium?

No, and I wouldn’t really expect to.  As Chairman your role within a company is not as technical as it is strategic in terms of directing the Board and the CEO.  One thing I do have is a track record of taking a project from concept to reality in a very short time; this is something I share in common with Julian.

It’s Julian’s job – and the geologists working for him – to be technical and we have some very good technical people working with us; a very impressive group.  

My skills are very well suited to what we want to do with EMA.

Is it fair to assume you would be reasonably well connected within the WA industry these days?

I’d hope so. I have been around the WA mining industry since 1987, so I know a lot of people within it.

As it also turns out, there are a number of people in the consulting sector I have previously worked with coming out of the woodwork with a vast knowledge of uranium.

I have a wide range of friends and Julian also has a very wide network of people.

Coming on board as a Chairman I don’t think it’s critical my recent experience has been in iron ore.

I think the key thing is you have to believe in the commodity and the market you are entering into and I do.

Had you received many other similar offers before electing to take up the position at EMA?

I did, however having said that I had always held the view that I wanted to stay and work in Western Australia and I wanted to work with a commodity that is interesting.

Uranium is always going to be that.

Every commodity is going to have upturns and downturns, you just have to look at what has happened with gold in the last couple of weeks to realise that.

The reality is that I am committed to staying in WA.

Through my participation in the mining tax debate and through policy debate with my role at AMEC, I have built up quite a good network in government – both at the Federal and State levels.

The last thing I want to do is traipse off to another country and start that all over again.

You don’t need to reinvent a new wheel?

That’s right. When you consider the network of people I have developed in Western Australia – if I venture elsewhere, for example Africa, I’m just another company man in a new country trying to make a dollar.

Here I have, I hope, integrity having steered BC Iron from being one person working from a desk in a mate’s office to a $400 billion company and being passionately involved in fighting government policies that I felt were unfair – particularly that damned MRRT.

What is going to be you role in BC Iron now?

I’m still going to be a non-executive Director, so I will still be on the Board.

The company’s new Managing Director, Morgan Ball and myself have worked together since 2009, so we have a good working relationship.

As I will still be on the Board, I will sit on Committees and still be available to him if he needs me to, so basically I’ll still be around – like a bad smell!

I’ll just have to remove the word Managing from in front of ‘Director’ my BC Iron business card.