Lewis Black of Almonty Industries On What We Must Do To Create Nationally Secure And Resilient Supply Chains

An Interview With David Leichner

Educate the public about the full scope of national security: You must explain to the populace that sometimes the state has valid reasons to do something for the greater good that perhaps some individuals don’t like, don’t approve of, or don’t understand, like allowing a mine to open in some cherished, beautiful place. Some things are so important to the nation that they supersede individual objections, which is going to be a real problem in the West, where democracy is all about the individual.

The cascading logistical problems caused by the pandemic and the war in Eastern Europe, have made securing a reliable supply chain a national imperative. In addition, severe cyberattacks like the highly publicized Colonial pipeline attack, have brought supply chain cybersecurity into the limelight. So what must manufacturers and policymakers do to ensure that we have secure and resilient supply chains? In this interview series, we are talking to business leaders who can share insights from their experiences about how we can address these challenges. As a part of this series, I had the pleasure of interviewing Lewis Black.

Lewis Black is a Director, President, and Chief Executive Officer of Almonty Industries. Born in London, Black attended Manchester University and earned a BA degree in management and technology before joining a global insurance firm upon graduating. His career focus later shifted to mining, and he has since accumulated more than 15 years of experience within the industry. Prior to founding Almonty in 2011, Black served as head of sales and marketing for SC Mining Tungsten, Thailand. Between June 2005 and December 2007 he was chairman and chief executive officer of Primary Metals Inc. (“PMI”), a former TSX-V listed tungsten mining company. As the founder of Almonty, Black has led the company’s rise to prominence as the largest tungsten producer outside of China. Because of the dual high demand for tungsten and the difficulty associated with procuring it, Almonty and Black are highly sought-after for their expertise and access to the precious, widely used metal.

Thank you so much for joining us in this interview series! Before we dig in, our readers would like to get to know you. Can you tell us a bit about how you grew up?

I was born in London and my childhood was a bit of an anachronism. Starting from age seven I was sent to boarding schools, the first of which was one of the last holdouts using Victorian education principles. Playing sports included boxing, and discipline involved caning.

I earned a B.A. in Management and Technology from Manchester University. A world-famous insurer hired me right after college, basically to make sure that an underwriter signed policies. The pay was terrible. I learned from the old boys’ network that to succeed in the U.K. had much more to do with whom you know and the school tie you wore. I quit that job, went to Australia and took a job in a factory. Eventually, an old school chum called from Thailand and asked me to help him out with a small mine that he had won in a card game. The mine produced some gray metal. That was my introduction to tungsten.

Can you share the most interesting story that happened to you since you began your career?

Once I became intrigued with tungsten, there was no returning to any other industry. The years I spent in that Victorian boarding school actually prepared me for the mining industry, which is a rugged business to put it mildly.

We bought the Panasquiera mine, in Portugal, in 2005. The mine has been in continuous production for more than 130 years and is the oldest continuously producing mine in the world. When we acquired it, the entire underground operation was antiquated. The was no underground lighting besides the headlamps on helmets. Safety was something of an afterthought. The crew there were a grizzled bunch of hard drinking, chain smoking fourth or fifth generation miners and I was this soft-handed person with an English accent. I was, of course, seen as an outsider when I arrived.

On my first visit to the mine, after we bought it, I went underground with the mine manager, a guy who started there as an apprentice at age 14 and worked his way up. He and the rest of the crew wanted to see what I was made of.

So, we’re walking through these underground galleries held up by pillars that are maybe 3 meters thick and there are holes 70, 80, or 90 meters deep. We came to one of these holes and he just leaped across. Other than the light from our headlamps, it was completely dark. I knew that this bloody deep hole was really a test. I was very uncomfortable, but I really had no choice. If I was going to manage and rebuild this place, I had to pass the test. If I didn’t, their first impression of me would not command respect. So, I jumped.

You are a successful leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

First, you need a strong moral code. My dad was one of the most important influences in my life. Like others who had been through the Second World War, he was a relatively unemotional person. But he was also the most moral person I have ever known. He had a strong sense of right and wrong and believed you must live by a moral code. I respected him tremendously.

Humility, in the sense that respect is earned through hard work. I gave up on the insurance industry job that I got after college in less than a year and headed to Australia with no plans at all. I found myself sleeping on an acquaintance’s sofa and before long, working in a factory manufacturing women’s clothing. Being fresh off the boat and an outsider with a peculiar accent was an unusual and humbling experience that taught me you earn respect by putting in the longest hours and showing everyone you’ll do anything, that nothing is beneath you.

Third, good manners. My career has taken my all over the world to work with all sorts of people, from high level government bureaucrats to C-suite executives and international bankers, and of course lots of skilled blue-collar workers like those miners in Portugal who put me to test. What I have learned, and certainly what I have practiced, is that mistakes can always be forgiven, corrected, and learned from, but rudeness is a firing offense. Rudeness is deliberate disrespect, and disrespect alienates people. Nobody makes a mistake deliberately, but rarely is anyone rude by accident.

Are you working on any exciting new projects now? How do you think that will help people?

We are working on a very exciting and strategically important project to reopen the Almonty Korea Tungsten Project, known as the Sangdong mine, in Daegu, South Korea. For decades after the Korean War of 1950–53, the Sangdong mine was the motor driving the economic rise of South Korea until the early 1990s, when very cheap tungsten from China made the mine economically untenable.

What makes this an especially exciting project is that the Sangdong mine is one of the largest tungsten mines in the world. Roughly 80 percent of the world’s tungsten is sourced from China and most of the rest from Russia. The Sangdong mine will substantially shift the politics involved with securing tungsten mine when we begin production late this year. You just can’t overstate the importance of having a large, reliable tungsten mine operating in an allied democracy like South Korea.

Operating at full capacity, the Sangdong mine could produce somewhere in the region of 15 percent of the world’s supply. It’s really the only viable, historically established source of tungsten that has emerged in the last decade. In terms of grade and size, few states have any long-term deposits with as proven of a track record as this mine has. Usually, the economic feasibility of resources is largely determined by reserves and quality. The average quality of the Chinese tungsten mine is 0.18 percent, while the quality of the Sangdong mine is 0.45 to 0.50 percent. That is more than 2.5 times the global average, the highest level in the world. You would have to look to Russia or China for any comparable operations of this scale. The Sangdong mine will be an important alternative to Chinese tungsten. It give U.S. manufacturers a way to avoid high US tariffs on Chinese imports.

Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. In order to ensure that we are all on the same page let’s begin with some simple definitions. What does the term “supply chain” encompass?

The crux of what we mean by a supply chain is being able to find the most efficient route to manufacture goods. The Japanese developed just-in-time supply chains. In the old days manufacturers looked to vertically integrate their processes from beginning to end, but over time it became more efficient to procure all the components from companies that specialized in that component. This allowed them to make things better and cheaper.

Global supply chains are the backbone of the global economy. Global supply chains exist not for consumers, but for suppliers. The fact that you can buy a Korean TV in New York has no impact on someone in Korea, but the fact that the semiconductor that you have in that TV is the same one that’s shared through multiple jurisdictions in the same product does have an impact.

The problem is that we got lazy and outsourced the work to create supply chains, because, you know, it’s hard work. You’ve got to think, you’ve got to legislate. Regulations, import and export duties, management, who can be bothered, right? Some countries were much more focused, so now we have a very small number of countries who are absurdly dominant on a global scale. Suddenly, the global economy is servicing the supply chain. Because there is no supply chain if the deal is you buy here or you can’t buy at all. That’s really the crux of the problem.

Since you can’t replace a supply chain over a weekend, the dominant players in supply chain management now have a virtual monopoly, because to compete with them is such a huge undertaking. We’ve allowed this to snowball to such a point that clawing it back is going to be a long, hard slog. And I’m not sure anyone politically is ready for that. I think what it really comes down to, in many ways, is the vanity that we have in the West. We’ve had this almost colonial view of the world that we’re so smart and we’re so rich that people will be just knocking themselves out to supply us, and that vanity has been fully taken advantage of.

Can you help articulate what the weaknesses are in our current supply chain systems?

Lack of diversity among suppliers. We lack choices and that’s ultimately what it comes down to. Semiconductors? Taiwan and South Korea, that’s it. Every country in the world is pushing to an EV future, but 74% of batteries are produced in China. There’s no choice for consumers and manufacturers. That’s the main supply chain problem.

Can you help define what a nationally secure and resilient supply chain would look like?

The best example I can use is the Cold War. At that time, there were nationally secure and resilient supply chains, because there was an inherent fear of World War III. Everyone already realized from World War II that secure supply chains meant having the resources to win. Hitler rolled into Russia because they had an awful lot of oil. We learned in the West you can win wars if you cut off the enemy’s ability to produce weapons, so countries developed their nationally protected supply chains. There was a real push for mining throughout Europe, throughout the United States and Canada, because there was real fear that in World War III, you would lose access to raw materials. You had to be able to stand on your own two feet.

My particular expertise is in cybersecurity so I’m particularly passionate about this topic. Can you share some examples of recent and notable cyber attacks against our supply chain? Why do you think these attacks were so significant?

Everything is digital, including our mines. We have automation in our plants and for the management of our internal environmental processes — the energy we use, the shipping manifests, transports, everything is digital, so everything is susceptible to attack. We have a digital security team and I leave this to them.

What would you recommend for the government or for tech leaders to do to improve supply chain cybersecurity?

Go back to paper? It can’t be hacked, except by some guy stealing documents or snapping pictures with the mini camera.

But seriously, you have to accept that to have all the benefits technology brings, and we certainly do at Almonty, you have to accept there’s going to be a certain amount of risk.

What are the “5 Things We Must Do To Create Nationally Secure And Resilient Supply Chains” and why?

1. Mine raw materials domestically: Pretty much everyone knows that nobody wants a mine next door. No politician has any appetite for that whatsoever. No one really talks about domestic mining anymore, but reliable access to essential minerals, like the tungsten we mine, is the foundation of a secure national supply chain.

2. Protectionist policies, as needed: Your supply chain can be damaged by external factors, like other states crashing commodity prices to ensure that your supply chain collapses under its own weight. The Sangdong mine that we’re reopening in South Korea closed years ago, at least in part because the Chinese were pricing tungsten so low that the mine was not economically viable. So, there must be some protectionism involved. I am not saying that is without risk, but there’s got to be something of a cold war mentality to this.

3. Stockpiling: Stockpiling is good. Stockpiling means that you have options in the event of disruptions. And it doesn’t cost that much money in the big scheme of things.

4. Educate the public about the full scope of national security: You must explain to the populace that sometimes the state has valid reasons to do something for the greater good that perhaps some individuals don’t like, don’t approve of, or don’t understand, like allowing a mine to open in some cherished, beautiful place. Some things are so important to the nation that they supersede individual objections, which is going to be a real problem in the West, where democracy is all about the individual.

5. Level the playing field: You must have a level playing field. You can’t tell a U.S. domestic producer they can’t use child labor but it’s OK in Africa. You must tell consumers “Look, we won’t use conflict material that was mined by kids, and we won’t buy material that isn’t produced transparently, because we need a level playing field.” Otherwise, you end up with a two-tier supply system that penalizes people who operate correctly and responsibly and rewards people far away who don’t. We need a level global playing field with one set of rules for all. That’s very important.

Are there other ideas or considerations that should encourage us to reimagine our supply chain?

I don’t claim to have thought of everything but those five items I just listed would certainly be a good start.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

In democracies, and we operate our mines in democratic countries, all solutions are political. Politicians are elected to determine direction. What would be nice to see is a politician who thinks beyond his or her reelection to pursue goals that ultimately would benefit everyone, regardless of political affiliation, in the medium to long-term. A politician who worked for policies to benefit the whole country in the long term could do something for the greater good.

How can our readers further follow your work online?

https://www.linkedin.com/in/lewis-black-5153b5143/

https://www.facebook.com/almontyindustries

https://www.linkedin.com/company/almonty/

https://www.youtube.com/channel/UC9DLyqFrHwPuEqvLg3ucb3g

This was very inspiring and informative. Thank you so much for the time you spent with this interview!

About The Interviewer: David Leichner is a veteran of the Israeli high-tech industry with significant experience in the areas of cyber and security, enterprise software and communications. At Cybellum, a leading provider of Product Security Lifecycle Management, David is responsible for creating and executing the marketing strategy and managing the global marketing team that forms the foundation for Cybellum’s product and market penetration. Prior to Cybellum, David was CMO at SQream and VP Sales and Marketing at endpoint protection vendor, Cynet. David is the Chairman of the Friends of Israel and Member of the Board of Trustees of the Jerusalem Technology College. He holds a BA in Information Systems Management and an MBA in International Business from the City University of New York.