Interviews with Mining Greats: Lukas Lundin
Lukas Lundin is part of the legendary Swedish Lundin dynasty and son to Adolf Lundin, who originally established Lundin Mining in 1994. One might assume that being born into a family of such achievement might dull the appetite for hard work and the pursuit of business growth, but the opposite is true in Lukas Lundin’s case. His drive has led to Lundin Mining’s ongoing growth and diversification into one of the leading mining businesses in the world.
How did you first get into mining Lukas?
I was born into mining because my father was a mining entrepreneur early on, so I was always exposed to it as a kid.
Stratum: Can you tell me about that famous meeting you had with your dad when he told you and your brother about your future careers?
I remember the Riviera about the age of seven and nine and Dad told us it was just a question of who is going to become a mining engineer and who’s going to be a petroleum engineer!
At the time I said mining and my brother said petroleum. At the end of the day, we both studied petroleum engineering and I think it stuck in our head and we just talked about what we were supposed to do. We didn’t think much of it at the time. That’s a true story!
Stratum: What would you say was your first big break
From ’81 to ’89 I lived in Egypt and Dubai. My first real break came when I came to Vancouver in the mining business and I picked up this big deposit, Bajo de la Alumbrera, in 1991, with the big porphyry system up in the Andes in Argentina when Argentina had just opened up.
At that time, I knew not very much about mining. I didn’t know what porphyry was!
Stratum: And how about your biggest mistake?
It was early on a smaller project. We were probably looking at ore bodies that should not have been put in production. The grade wasn’t high enough; it wasn’t enough tonnage. It’s very important to get the right quality asset when you do this.
The problem in a very warm or hot market is that you can finance a lot of things that should maybe not be financed. I think you have to be careful and think long-term and not short-term in this business.
Stratum: Do you think the current system allows for that, given how everything seems to be driven by financial markets?
I think the market corrects itself quite quickly. In a heated market, of course, everything goes, but it gets corrected very quickly in a downturn. I think the market also is getting quite sophisticated in what’s good and bad; the capitalist market works well.
Stratum: At the junior end I find that a lot of armchair expert investors forget very quickly and they just back the same things every four to five years.
It happens: greed takes over. But I think that happens in every market. The high-tech market must be 100 times worse. In any market when they have a commodity running as a favourite you’re going to get a lot of people jumping in just to try to make a quick buck. You can’t avoid that. It’s the nature of business.
Stratum: Do you think that applies to lithium?
There are about 20 lithium companies in Vancouver right now. There were none up till six months ago. Ten years ago, we had no uranium companies, suddenly we had 100. That’s the nature of the business.
Stratum: What advice would you give to your 30-year-old self, based on what you’ve learned in the few years since then?
Stay focused. You’re going to have to have a good exploration programme because you’re not going to be able to finance yourself buying assets when you don’t have the money, so surround yourself with good exploration people and look at projects that have size and grade.
Stratum: But unfortunately, exploration is not very sexy, is it?
No, it’s not very sexy and it’s very time-consuming. From exploration to mine… if you do that in ten years you’re fast.
The mining business is not an easy business because first you have to find it, being able to explore, then you have to build it. It’s all very treacherous and then you finally get it going. You can come out, it collapses! If you look at it from 1,000 miles off it looks like a crazy business. It’s not that easy to make money.
Stratum: What do you look for in leaders who are executives or leaders across the entire range of the business?
Leaders are hard to find. Most people that work for me have been with me for ten to twenty years and they all know the business.
Most people that run our companies are miners or professionals in the oil and gas business. We look for guys that are steady, good. They have to be able to delegate well and build good teams around them and it’s very hard to find leaders that can do all this. You must be in control, at the same time be able to delegate and at the same time be able to build. There’s a lot of different skills for one person.
Stratum: Are there any leaders amongst your peers or those who are up and coming you particularly admire?
My peers and I are old! People like Ross, Friedland and David de Witt. I’m so involved with what I do myself so I haven’t noticed that many young guys around me but hopefully there’s some around.
Stratum: There are at all levels; probably more than people think. I think the hard thing for guys like that is recognising that they need more experience and mentorship before they can take on the big things, because people, certainly my generation, and perhaps the one before me, tend to be quite impatient.
I know, but you’re going to make a lot of mistakes and if you learn from your mistakes you become much stronger.
This is not a perfect run. We all do a lot of mistakes and the successful people learn from their mistakes and unsuccessful never learn. They go back and do the same thing and it’s amazing to watch people do the same mistake over and over and over.
Stratum: Canada has quite a good selection of youngsters, 38 to 45, coming through. It’s only a handful of people; about maybe 20 or 30.
That’s fine and another thing is all the guys out of Perth. They’re all over in oil and gas and mining.
Stratum: Are there any areas where you particularly enjoy doing business?
A very good place to do business is Sweden because of very easy mining laws. Very easy permitting and very friendly where we’re involved. South America, of course, we like because the systems are very big. Chile we’re involved in. Argentina we’re very involved in and hopefully will go back. Georgia looks good and with the new government we’ve lots to do, a lot of big systems. And of course, South America and Peru we like. We do a lot of business in Africa; Botswana is fantastic; Congo is more complicated.
Finally, I wondered if there are any books you’d recommend.
I read a very good book recently; John D Rockefeller’s book, The Autobiography of an Oil Titan and Philanthropist. I thought that was very interesting.
Born in 1958, Lukas Lundin was raised in Stockholm, Sweden and educated at the Ecole Internationale de Genève in Switzerland. In 1981, Mr Lundin graduated from the New Mexico Institute of Mining and Technology (engineering). A well-known and respected business leader and philanthropist, Mr Lundin has enjoyed international success in the resource industry, spearheading numerous world-class discoveries and developments worldwide in both the mining and oil and gas sectors.
As principal of the Lundin Group of Companies, a group of twelve publicly-traded companies, Mr Lundin is actively involved in the exploration, development and production of copper, cobalt, zinc, nickel, lead, gold, uranium, oil and gas, and diamonds.
At age 25, Mr Lundin headed International Petroleum Corporation’s extensive and then rapidly growing international operations based in Dubai, U.A.E. From 1990 to June 1995, Mr Lundin was President of International Musto Explorations Limited and was responsible for Musto’s acquisition of the Bajo de la Alumbrera deposit. Bajo de la Alumbrera was the subject of a $500 million takeover by Rio Algom and North Limited and is one of the largest gold/copper producers in the world. Mr Lundin was also responsible for the discovery of Argentina Gold’s multi‐million ounce Veladero gold deposit. Argentina Gold was the subject of a $300 million takeover by Homestake in 1999. In addition, as a senior director of Lundin Oil AB, Mr Lundin was instrumental in the $480 million takeover of Lundin Oil by Talisman Energy in 2001. These are but a few examples of how Mr Lundin has been and continues to be focused on the realisation of extraordinary value for his shareholders through exploration and development success, takeovers and multi-billion dollar mergers.
Mr Lundin currently serves as Chairman of a number of publicly traded natural resource‐based companies, including Lundin Mining Corporation, Lundin Gold Inc and Lucara Diamond Corp. and NGEx Resources Inc. Also, he is Executive Chairman of Denison Mines Inc.