Mining for More

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[Music]

Hello, I'm Alan Kohler, Editor-at-Large of Intelligent Investor and Finance Presenter and podcaster for the ABC.

And I'm James Thomson, Senior Chanticleer Columnist at The Australian Financial Review.

And we are The Money Café. James, you're in Perth, why are you there?

I'm in Perth, yes, we have our mining summit here today on Wednesday and it's always a great event, great to get up to Perth. We went up to the Pilbara on Monday and had a look at one of Rio Tinto's mines called Western Ranges. I hadn't been up there before so it was quite an experience. You sort of write about the Pilbara and mining for 25 years, but to finally get there and have a look and see the scale of just one mine, it was quite eye-opening.

I flew over the Pilbara once, I think in 1975, with Lang Hancock driving the plane.

There you go.

It was a small plane and Lang Hancock was driving and he was showing me whatever he had up there and we were up high at one point and he says, "Have a look at this..." and he dives down, did a massive dive, I thought I was going to die. Anyway...

We had no such acrobatics. Even that is a really good point, Alan, you're flying full Qantas jets up to these tiny towns, such is the sort of infrastructure and the logistics of the FIFO system, it's amazing, very interesting.

Iran, what do we think? They haven't got a deal yet, Trump's been talking it up for a few days and then he starts blowing up their ships and the Strait of Hormuz, Iran's got upset about that, so that's going to hold up a deal between the two, isn't it?

Yeah, you'd think so. The issue here is Donald Trump sort of created a bit of a monster, in a way. Obviously, the Iranian regime was monstrous before, but now they're monstrous and switched onto the leverage they've got over the world. What everybody says is that no geopolitical expert ever thought that the Strait of Hormuz would ever be shut and yet, here we are, the Strait of Hormuz is shut and it's been shut for the best part of 10 weeks. The Iranians have got a pretty strong hand, they've got no great incentive to open the strait quickly without securing a good deal for themselves and Trump seems to have this view that he holds all the cards and there doesn't seem to be any great hurry in his mind. It's very strange.

The market keeps telling us that the logical conclusion here is a deal and a deal pretty quickly, because the market's looking at the gasoline price, which is now creeping well over $4 bucks and starting to creep towards $5 for diesel in some places. They're also looking at Trump's approval ratings, which they're not in the toilet, they're in the S-bend and you would think that Trump's famously attuned to what voters want. This time, he just seems to be brazening it out. As the midterm elections in November get closer, you just wonder what the strategy is here. I don't know if you saw, Alan, the consumer confidence figures in America. Stock market's at all-time highs and consumer confidence hasn't been this low since 1947.

Yeah, that's right, it's a really amazing situation and Trump does seem to be in a real pickle because he's managed to change the regime in Iran, as promised, but instead of the Ayatollah Khamenei who was relatively moderate, he's got this revolutionary guard in charge and they're not moderate at all - and they, as you say, understand the leverage they've got over the Strait of Hormuz. In some ways, what they were trying to get was leverage through having a nuclear weapon because everyone who's got a bomb, other countries are very careful about, which is why they want it. But now, they've got the leverage over the Strait of Hormuz, which is pretty strong leverage as well and maybe that's enough. Maybe they'll just give up the nuclear weapons because they've got leverage over the Strait of Hormuz.

Yeah. I think everything we say about this, Alan, you've got to admit that it's been a pretty humbling episode for commentators and experts in oil and experts in geopolitics. Everybody thought that by, first, the end of April, then the end of May, the world would sort of be frozen because of this energy shock. That hasn't turned out to be the case at all, in fact the global energy complex has adapted really well to this, but it's adapted really well because of two things, a) America's increased its oil exports and in some ways you might say, "Well, they got us into this so that's the least they can do."; and then China's done the right thing by the world, by reducing its oil imports and instead, drawing on its big stockpiles of gas and energy.

The combination of those two factors has really helped keep oil and gas flowing around the world at prices much lower than they could have been. But those buffers, they're limited. Trump needs a deal soon, the world needs a deal soon or this is going to get even uglier. Let's see where it goes, I guess.

In the meantime, the Australian Government is moving on having a domestic gas reservation policy of 20 per cent, which obviously the gas companies like Santos are dead-against. Where do you think that's going to go? Do you think the gas companies will succeed in their lobbying attempts or they'll have to put up with it?

I'm not sure. I'm not sure they will succeed in their lobbying attempts this time and my sense from talking to some experts in the industry, is that none of the gas people like a reservation policy, but no one in the gas industry likes the current sort of hodgepodge of regulations that they're currently operating in either. A reservation policy, in some ways, is unpalatable, but at least it provides a level of certainty so maybe we do get there in the end. I mean, no doubt, the gas industry will bleat about it, but I think the Government is pretty steadfast on this one and I think they feel, unlike the CGT changes, they've got the electorate's backing there. I think it probably gets through, definitely a lot more bleating.

But, I think you've picked this up too, Alan, Santos had a big investor day yesterday and the main purpose of that was to basically tell everybody that Santos is going to be a brilliant cash machine because they've got their costs down to basically $50 dollars a barrel and every $10 bucks above that, they're going to throw off $600 million dollars in cash. That's their pitch to investors. I think you saw this too. They had some great charts about the long-term demand for oil and gas and basically, they see shortages in LNG starting to appear next decade and oil demand staying basically high and flat until 2050. So it just says to me that, okay, we get through this Strait of Hormuz bit, we should expect inflationary pressure from higher energy prices, that's going to be a persistent theme for the next 30 years, I reckon.

Yeah, I think one of the things that came out of the presentation that they made at the investor day was really kind of to remind us that, when we're talking about fossil fuels being replaced by renewable energy, that's kind of true except that within fossil fuels there isn't one fossil fuel. So, what's been happening is that gas is replacing coal. It isn't just solar and wind that's replacing coal, it's gas. That is a significant underlying demand point for gas, which is going to be maintained and it can't be replaced, not for a long time.

I think that was really interesting and as you say, I put that graph on the ABC News last night showing the shortage of LNG, according to Santos, opening up in 10 years' time, roughly.

Even with oil, their point was, okay, the world moves to electric cars, everyone gets that, but oil in petrochemicals, which are such a part of everyday life, we haven't really come up with a substitution plan there; oil for jet fuel, there is no viable alternative at the moment there; oil in developing countries is still going to be really important and widely used. The energy transition is happening and we saw that in Australia this week with a decision on the default energy prices coming down because of take-up in solar and batteries. It's a transition, it's lumpy, it's bumpy, it doesn't look like a linear, out with fossil fuels, in with something else.

No, that's right. What else is going on? In the mining industry in Perth are they talking about AI at all?

I am talking about AI on a panel today, Alan, indeed.

Okay, what's the subject matter of the panel?

It's about AI and tech. I think when you go up to the mines, you're reminded of how much - well, they don't call it AI, but it is AI - how much AI is being used already. At Western Ranges Mine which was opened a couple of years ago, 80 per cent of the trucks in that area, in that sort of mining hub around there are autonomous, no drivers. 50 per cent of the drills used in that area are autonomous. That's a sort of form of AI that's really transformed the way those mines operate. You don't see a whole lot of people on site and they're mainly doing supervisory roles, I guess, supervising this autonomous equipment, so the next jump for them is how do they use more AI? And they are doing that. Like everybody else, there's a whole lot of noise around that, I think. Everyone's got an idea about AI, but how it's practically being used is what I'm hoping to explore on this panel.

The trains are being run out of control centres in Perth, right?

Yeah, that's exactly right.

By human beings, so maybe they can replace the human beings in those places with AI.

Well, that is a question that I've got. You see on these mine sites, obviously it's very dangerous work, but all these people flying in and flying out, if you had humanoid robots, you could eliminate that as well. Think of the jet fuel you save, think of the time you save for people, think of the safety benefits, think of the logistics that you don't need... I don't know how far away that is...

What sort of things are the human beings doing on the mines that the humanoid robots could do?

There are some tasks like trade-based tasks, diesel mechanics, fitters, people supervising equipment and all that sort of stuff, checking for safety issues and inspecting stuff... You would imagine that over time, you could use some form of humanoid robot to do some of that work, I think that's completely possible. The FIFO system places a lot of strain on a lot of different things. It seemed to me to be a pretty obvious solution but the mining companies aren't talking about that.

The other thing with AI, Alan, overnight, I've been noticing there's a few companies starting to talk about the cost of AI and how expensive it's becoming. There's a few companies that are really bingeing on AI and using it in lots of different ways. Overnight, the Chief Operating Officer from Uber was out talking about how he's starting to get worried about how much they're spending in tokens and are they seeing the resultant productivity improvement? This is noticeable that AI is supposed to cut tech costs, but we had the ASX come out yesterday, the market operator, and say that their cost growth next year and the year after is going to be much higher because of tech inflation.

We've had CBA point to tech inflation in cloud computing and other things. In the US, we've had a lot of companies saying, "Gees, the token cost and what we're spending on cloud is really going up." I mean, maybe this is a temporary sort of bump in the road and eventually these costs do come down, but it's an interesting sort of moment.

I'm not sure it is temporary because the companies that I'm talking to, what they're saying is that although the unit costs of intelligence are down, so the costs of a particular task are lower if you use AI than human beings, the trouble is because the tasks are so cheap, they're doing it more often. If you can get a marketing plan once a day instead of once every three months, they're doing it. They're just doing these things far too often because they can and so that seems to be the problem. It's going to take a lot of discipline for companies to kind of wind back this stuff. There's no doubt, if you can call it this, the unit costs of intelligence, however you might measure it, are definitely lower, it's just the amount you use it is the problem.

I'm certainly spending more on this stuff - well, I'm having to pay for a subscription to one of these AI things, which is not that much, I think it's $20 bucks a month, but I was previously paying nothing for Google searches.

Yeah and if you're someone who's - we all read these stories about people who have automated their life with AI in some way by hooking up various stuff, the household finances or their calendar or whatever it is, their email system and getting AI to help them sort it or manage it. You do hear of people hitting the limits that the AI model companies like Anthropic and OpenAI set for usage and people are being throttled like they used to be in the old days of the internet.

I know and what these AIs are saying to you and what my AI is saying to me, "If you want to remove the limits, it'll cost you $200 bucks a month, so please upgrade to the max program, $200 bucks a month, please." That's serious money.

Yeah, absolutely and a bit like the Uber boss, you have to start figuring out, is it worth it? Am I actually getting something out of this or is it, as you say, just better arranged Google searches?

Yes.

Alan, I'm sure everyone's had a chance to interact with AI now, a ChatGPT or a Claude or a Gemini, it's very clever in the way that it keeps asking you questions, "Do you need more information?", "Is there something I can chase down?"

I know.

Even the cynical journalist in me wonders if it doesn't - because it often gives you an answer that isn't a complete answer and you have to prompt it to say, "What about this...?" The cynical journalist in me wonders if that's all part of the ploy to keep you using tokens and keep you engaged.

Yes. Okay, all right, we've got a lot of questions, in fact we've got 20 pages of questions this week, we just cannot possibly answer them all, everyone, sorry. But we've chosen as many as we think we can answer. Before we get to questions, here's a quick word from our sponsor.

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And also before we get to questions, the usual warning that it's general advice only, not personal advice. The first question is from Matthew, he says, "Is SpaceX's IPO a giant scam? Is Elon Musk coming for my money via ETFs? There is a YouTube video called, 'SpaceX IPO, it's worse than you think', going viral. This video explores several critical and controversial aspects of upcoming SpaceX IPO that may warrant closer journalistic scrutiny. It argues that a quiet rule change known as the 'Nasdaq fast entry rule' will allow SpaceX to bypass certain traditional hurdles, effectively turning retail ETFs into exit liquidity for company's insiders who will sell at peak valuation. Is this real and what can we expect? What can retail investors do?"

Retail investors like institutional investors, including the managers of your super funds, dear listeners, face a really tough one here, because it is right that the US market operators appear to be set to fast-track the entry of SpaceX and probably OpenAI and Anthropic when they list into share market indices and they'll do that by, as Matthew says, allowing them to enter faster than companies are normally allowed to enter these indices and they'll sort of waive the rules. Usually, to go in these indices, you have to be profitable, none of these companies are and so they'll waive the rules around that. So, yes, your ETF, if you have an ETF that tracks the S&P or the Nasdaq, your ETF will need to buy these companies. I think there's two points to make about that though.

Yeah, okay, you could see retail investors as exit liquidity, but you've got to remember, in the case of SpaceX, a gentleman called Elon Musk wants to retain a fair bit of control of this stock, so how many insiders are actually selling is a good question. Are you exit liquidity? Sort of, but how many insiders actually exit is a real question. The other thing I'd say, Alan, is what's your alternative as a holder of an ETF that tracks the S&P 500? You may decide that you don't like the SpaceX listing and you think the whole company is a bit of a scam, but do you really want to stop tracking the index with it in there? I mean, tracking the index over the last 50 years has been a pretty good play, is this the time to stop now because of one company entering it? I'm not so sure about that.

Yeah.

I think that's not why you buy the index. You buy the index because of the diversification and that diversification doesn't stop just because SpaceX is suddenly in there.

That's right. Just while we're on SpaceX, if you look at the SpaceX prospectus, which you can easily find online, page 11 has got an estimate of the total addressable market, which is $28.5 trillion US dollars, of which $26.5 trillion is about AI because SpaceX is mainly now an AI company because they own Grok and the other Elon Musk AI company called xAI. It's not really about Space so much. It's interesting, the $28.5 trillion dollars, there's never been any company in history that's come up with a total addressable market of that much or anywhere close to that much, but I just finished talking to Gerard Minack for the Intelligent Investor podcast, Talking Finance, and he was just saying, "Yeah, I've got a new start-up that's got a total addressable market of so much more than that and it's a water company, because every human being in the world needs water, so the total addressable market of water is much more than that."

Yes, of course. Where can we buy shares?

That's right - and the thing is, water is not a very good business because it's very competitive and it's regulated. You'd be crazy to get carried away with total addressable market of $28.5 trillion US dollars.

I think I wrote on the day that these total addressable market numbers are rubbery, but this one's like jelly on a paper plate, I've never seen something that's such a finger in the air guesstimate.

I know.

Anyway, I look forward to hearing Gerard, his stuff is very hard to read for mere mortals, because it's hard to get your hands on, but he's such a guru so I'll look forward to that podcast, Alan.

Yes, okay, next question.

Jay says, "I'm a long-time listener and occasional question sender here. The recent closure of the Strait of Hormuz highlighted just how dependent we are on petroleum for far more than just fuel, fertiliser, plastics and even everyday products like plumbing pipes. So if we're transitioning to renewable energy, why aren't we seeing comparable investment and discussion around replacing all those petroleum derived products and realistically, is it even possible to move away from petroleum for most of its non-fuel uses?" Great question, Jay.

Yes and he's right. People are working on it, trying to come up with a battery powered aeroplane, but it's hard. It's a very long way off.

Yeah, fertilisers and plastics, I actually haven't heard of many people working on that, I must say, Alan. Petroleum derived products are in everything, they're in our clothes, polyester has got oil in it. I actually haven't heard of many substitutes for those products and the problem, Jay, is that the substitutes can tend to be very expensive when you can find them. Sustainable aviation fuel is a great example, it's a lot more expensive. Hydrogen, which was seen as the great substitute for some of these things, it's bloody expensive to make and that's really ruled it out as a substitute at the moment. I think it's a great point, Jay, and I think the answer is, no, we don't really have economic substitutes for most of those products and that's why the Strait of Hormuz episodes reminded us of how reliant we are on fuel still.

And will be for a long time...

Exactly.

The energy transition is real, but it's a transition from coal to, as we've just been talking about, renewable energy and gas in the electricity market and also from internal combustion engines to electric vehicles, but that's about it at this stage. There's much more to it than that. James says, "I became a devoted subscriber after you introduced me to Clean TeQ, TEQ, now called Sunrise Energy Metals back in the day, it ended up being one of the most spectacular rallies in the ASX, gaining roughly 3,900 per cent from its lows, thank you!" You're welcome, James.

You're welcome, James, we do not give personal advice or stock tips on this show...

No, no... "With that market win in mind, I want to ask you a massive piece of new world disruption. The Hype token has done something incredibly rare in crypto, it has completely broken its correlation link with Bitcoin, more than doubling in value while the broader market wobbled. Hype is the native token of Hyperliquid, a decentralised exchange run by a tiny team of just 11 people. A recent watershed profile by Colossus revealed that this tiny team generated over $900 million US dollars in pure profit last year, operating 24/7 with zero venture capital backing. They've even started tokenising traditional macro assets like gold and oil.

My question - when an 11-person tech protocol can build global financial architecture that matches the profitability of major institutions with virtually zero overhead, what does this mean for legacy exchanges like the ASX? Are old world brokers and clearing houses structurally cooked, or will regulatory moats protect them?" Interesting question...

Yeah, I think the answer, James, is a little from column A and a little from column B. I think tokenisation and the use of the blockchain is probably the best thing to come out of the Bitcoin world at present. It is really valuable for these sort of market operations that James has described. In America at least, tokenisation is becoming more common, it's got better regulatory backing, ironically thanks to Trump and so I think we will see more tokenised products, more tokenised financial infrastructure in place around the world and over time, the ASX and competitors to the ASX will use tokenisation to great effect to lower costs and improve speed and improve accuracy.

But, yes, the regulatory piece is the moat. How ready will regulators be to trust that technology and trust those operators? The thing about the ASX is that it's not an 11-person company, it's a big listed company with lots of directors and lots of staff and lots of capital, that when ASIC finds, as they have, that the ASX hasn't been operating in a manner that befits them, that ASIC actually has someone it can go and beat up, that's important. Now, can you bring the same regulatory hammer down on 11 people working out of a garage somewhere? Probably not.

So I think that is going to be a moat for a while, but not forever. There are definitely tokenised operations or tokenised operators who have a bit of heft behind them, can have a bit of capital behind them and in Australia I think ASIC would love to see a bit more competition to the ASX, for example, and so perhaps they are a bit more willing to back the new operators, if that makes sense.

Yeah, it's also worth saying that I think that the financial disruption brought by the blockchain which was basically the fundamental thing that Bitcoin brought, apart from speculation, has taken a bit of a backseat lately with all the hype on AI and also, obviously, the war in Iran and everything, so no one's really talking about that and Bitcoin's going nowhere. I think that that disruption is still going on, blockchain is there and people are working on it and it is kind of there. Also, central banks are working on central bank digital currencies that are also based on the blockchain that they're running themselves and I think that eventually that'll happen. You're probably going to eventually end up with some form of programmable money because the central banks want to do that. I think the disruption is happening, to what extent little teams like Hyperliquid or more official - I don't know, but it's definitely going on.

Yeah. Kane says, "The new budget includes Treasury estimates that there'll be less houses and therefore higher rents as a result of the changes to negative gearing and capital gains tax, but I can't figure out why. Surely, there is still the same number of investors available, won't they spend their money on new houses instead to make use of the exemption, supercharging the new house market? Won't they also hang onto their current investment houses to also make use of that exemption? Where's the gap come from?"

Interesting. I do think that the Treasury was surprisingly pessimistic in its estimate of the impact of the CGT and negative gearing changes on the building of houses, where they predicted it would result in 35,000 fewer houses, only offset by 65,000 more houses from the Infrastructure Fund of $2.1 billion that they're creating, so the net change from the budget is a plus 30,000 houses. But the negative gearing is supposed to be focused or it will be focused or available only on new housing, which is designed to result in more new housing. I don't know why they're being a bit pessimistic about it, but I guess that that's the CGT change.

Yeah, exactly, the capital gains, there's no exemption for new housing and so I think the view is that there will be a bit of flow on from that. People won't want to invest even in new houses despite that negative gearing exemption, they'll be put off by the CGT change. I mean, we're talking relatively small numbers according to Treasury's modelling, but Alan, frankly, the Treasury modelling for housing supply and for rents is over 10 years, it's a bit like the SpaceX total addressable market, I mean god knows how they did the modelling. Let's wait and see.

Modelling is kind of, forget about it, it's really meaningless, isn't it?

Yeah, I think that's right. But look, one thing I will say, Kane, is I think there is a level of surprise out there amongst property people, certainly economists and analysts. There's a bit of surprise about the size of the hit to sentiment in the property market, which we're seeing come through early in soft data, so auction clearance rates and surveys, but this does seem to have really whacked the sentiment of property investors, which I've got to say, that's what it was supposed to do.

That's right, exactly.

I guess in a way, it's effective, but how that translates to prices, I think there's a lot of - I think people are really having to wait and see there. I think the hit to prices might be bigger than we think, particularly if we get a couple more rate rises.

Just while we're on this, do you think that they'll cave in and confine the capital gains tax change to property only and exempt start-ups and businesses?

Yes, I think there's going to be some roll back. I'm not entirely sure what that roll back looks like. Is it a different rate for businesses? What do they do about shares? I don't know, they've walked into a bit of a mess here, haven't they?

Even Matt Comyn's calling for putting it on property only.

I'm sure you'd know better, Alan, but I can't think of a budget in the last decade at least that is still white hot three weeks after the event, it's fascinating.

It is, white hot, exactly.

It is white hot, it is all people want to talk about, it's incredible. Jordan says, "Might still be a touch early with five weeks left in the financial year, but I wanted to revisit James's prediction from the end of 2025 that the ASX would be up 10 per cent by June 2026 and then finish the year relatively flat. Given where the market now sits, do you still hold that view? Have any major events or economic shifts this year changed your outlook either way?"

There'll have to be a decent rally in June, won't there, James?

Yes, Jordan - geez, our listeners are good, aren't they? They're like elephants, they never forget. The ASX is actually down, year to date, 0.8 per cent, so my prediction is looking absolutely cooked. In my defence, Jordan, such as it is, I don't think anyone foresaw the biggest energy shock in the history of the world, which has added to Australia's pretty ugly inflationary environment. It will be impressive if the ASX can finish in the green for the year. Maybe it finishes up 1 or 2 per cent as the Iran situation sort of sorts itself out, but the RBA's still got this really big problem with inflation. It had a problem before the war started and I think the problem was bigger than I thought it was and so we start the year with these three consecutive rate rises, we're probably going to get another.

If we get a fourth, the pressure on the domestic economy is going to be huge. I sort of keep writing about this, the problem the RBA's got, is rates don't work like they used to. Part of the reason for that is that we're all so rich. Household wealth in Australia has gone up $3 trillion in the last two years through house prices and investment returns and that challenge continues to bite. It's hard to make a prediction. I would say the ASX finishes the year flat and sort of just trades in a fairly narrow band because the domestic outlook is pretty tough.

Jordan had a p.s. by the way, "Any chance the Money Café hats can be bought separately without an InvestSMART subscription? I would love to buy one." Yeah, why don't you just email support@investsmart.com.au, that's what Greg says. Email that, support@investsmart.com.au and someone will give you a hat, I think. That'd be good.

Any hats for participants?

Haven't you got one?

No, no...

Oh, James, we've got to get you one, or two. You can give one to your wife, she'll love to wear it.

Yeah.

Nick says, "Alan has pointed out the political flaws with indexing income tax rates to inflation, tax cuts by stealth, but what about the economic case against them? It seems to me that the Coalition policy would be pro-cyclical, where periods of high inflation would have bigger tax cuts, returning greater amounts to people, fuelling demand inflation, while the opposite will be true when inflation is low. This will undo the countercyclical impact of bracket creep." That's true, isn't it?

Yeah, I think that's right. Yes, it's a tough one. I mean, Nick's right that there is a case against them, but do I sense that Nick's sort of trying to say bracket creep's a good idea?

I think he might be. I'm not sure I said this, but I think that if you're going to get rid of bracket creep with indexation of tax scales, fair enough, but you've got to find some other way of having a growth tax. You simply have to, in my view, offset it by increasing GST to something close to the OECD average of 20 per cent, or have a wealth tax of some sort, which a lot of countries do. Even Angus Taylor, I don't think, is capable of cutting spending to the extent necessary to deal with the bracket creep. He can talk all he likes about it, but I think that if you end bracket creep, you're going to end up with bigger deficits because there's no way they're going to be able to cut spending to the extent they think they can.

Yeah. I'm going to finish with one, Alan, from Peter, he notes a recent line in a report from Brambles, which is the big pallet company, the pallets that are sort of a big part of the plumbing of the logistics world, we send all our stuff around the world on pallets and Brambles said on May 18, "It has become clear that the increasing plant automation by customers is leading to a requirement for consistently higher quality pallets compatible with these automated handling systems." Peter asks, "Is this the first sign of an impact to business from AI and robotic automation?"

Interesting.

Great spot, Peter, yeah.

Did you pick that up when that came out?

No, I did not.

Is Brambles saying that that's going to be good for them? I suppose they are.

In a way, because if you remember, Brambles on that day announced a big sort of expensive upgrade to one of their plants. I think the problem is it could be good for Brambles over time, but it now has to produce those high quality pallets, where obviously, previously it could get away with lower quality pallets. I think there's a big expense jump first that is the problem.

I'm sure they can sell them for more though too because the customer's costs are going to come down by not employing human beings in their warehouses.

Yes, that's true, but like everything with AI, there's a sort of gap in between, isn't there, that has to be dealt with.

It's a double-edged sword there, James.

Exactly.

Well, very good. So, we couldn't even get through the questions that we picked out, let alone the 20 pages of questions. Anyway, good to talk to you again, James, have a good summit about mining in Perth and we'll see you in a couple of weeks.

Thanks, Alan, it should be good, I love being over here and talking to the mining industry, it's great.

Thanks everyone for listening to today's episode, I'll be back next week with Stephen Mayne, send in your question to themoneycafe@intelligentinvestor.com.au and we'll try to answer it, we're getting so many it's getting hard to, but we love to see them...

Keep them coming though...

Keep them coming and we'll certainly do our best. Until then, I'm Alan Kohler, Editor-at-Large of Intelligent Investor and Finance Presenter and Columnist and podcaster for The ABC.

And I'm James Thomson, Senior Chanticleer Columnist at The Australian Financial Review.

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