Joanne Warner is the manager of the First State Global Resources fund. Her diary runs from June 17-23.
Thursday I have a presentation to give in Geneva, followed by some meetings. Questions centre on the drivers of demand for raw materials, the opportunities for investment in the natural resources sector and the implications of the BP oil spill.
Friday I am staying at the boutique Hotel Tiffany, which is beautiful because of the Tiffany lighting and the art nouveau furniture. I check in with the team back in Australia to get market updates before heading off to meet some family friends for lunch overlooking Lake Geneva. I spend the rest of the day working from my room, catching up on emails and keeping an eye on the market through Bloomberg.
Saturday I fly via Frankfurt to Almaty, the old capital of Kazakhstan. This is my first visit to this country, which has incredible mineral wealth and a fascinating history. Before investing we like to see the assets first-hand. It enables us to better understand the conditions, culture, environment, politics, the socioeconomics and the infrastructure of the country. Financial valuations are the easy part of an investment decision; the hard part is understanding and quantifying the associated risks. (article continues below)
Sunday I catch up with a friend who is living and working in Almaty as a portfolio manager for a hedge fund. We spend the day sightseeing, visiting the nearby ski resort and enjoying an Arabic meal looking up at the snow-capped mountains, many more than 4,000 metres high. We visit a market to buy delicious dried fruit and woollen felt slippers.
I am informed with great pride that the name Almaty comes from the Kazak word for apple and the fruit features on the regional flag. We finish the evening watching the World Cup (New Zealand versus Italy) live on a big screen in a beer garden underneath a large umbrella as the rain pours down.
Monday I fly to Astana, the new capital of Kazakhstan, which looks a bit like Las Vegas in the steppes – but without the gambling. This amazing glass and steel city has been built over the past 15 years, mainly funded by state revenues from oil and gas. Astana’s architecture is unusual, with loads of geometric shapes, such as spheres and pyramids.
Tuesday I meet the directors of Eurasian Natural Resources Corporation, a Kazakhstan-based miner, for a tour of their Donskoy underground ferrochrome mine. We wear hard hats and safety boots to visit the main production areas at about 600 metres below the surface. We tour the pellet plant and after a quick shower enjoy an enormous lunch – a hallmark of Kazak hospitality. We also visit the ferrochrome smelters in Aktobe before heading to the hotel and watching another World Cup game in the bar.
Wednesday After flying from Aktobe to Kostanay we tour the large-scale open pit iron-ore mines and watch the opening of a steelworks. The event is also attended by local politicians, dignitaries and Kazak media. Then our tour takes us to a wet magnetic separation area and iron ore pellet production shop.
Tomorrow I am off to visit an open pit coalmine with a 60 metre seam of coal. This is the largest single seam of coal that I have ever heard of and the mine produces 20m tonnes of coal a year.
It is a bumpy, six-hour round trip on a bus so I make sure the iPod is fully charged. In Kazakhstan they drive the same way you would ride a horse, always looking for a gap. Lanes are merely a suggestion.