Founded in 1993 by Peter Hollands and Barbara Sotowicz, Bloomsbury Minerals Economics (BME) started as a mining market analysis company. Almost thirty years on, it retains links to mining and metals via investments in Skarn Associates (mining and metals ESG) and Metal Price Analytics (cash price models for ores and price and forward spread models for exchange-traded metals). BME is diversifying its investments via two 85%-owned subsidiaries, Bloomsbury Natural Capital (algae aquaculture and forestry) and Bloomsbury Information Capital (SaaS businesses).
Directors are Peter Hollands (Chairman) and Barbara Sotowicz (Managing Director), who have been with the company since 1993, plus Martin Hollands (Environment & Sustainability) and Simon Benney (I.T. & Data), who joined in 2020.
BME has a 22% holding in Skarn Associates, which undertakes asset-by-asset energy intensity and greenhouse gas (GHG) emissions analysis for production of gold, silver, PGMs, copper, nickel, cobalt, lithium, zinc, lead, aluminium-alumina-bauxite, seaborne iron ore and metallurgical coal. Water bench-marking (operational water balance, flood and drought risks) for gold mining was added in December 2021; the same for copper mining was added in April 2022. Analysis of land use, biodiversity and workforce safety will follow.
BME retains its 25% holding in Metal Price Analytics, which produces mathematical models of ore and metals cash prices in USD and CNY, and for exchange traded commodities, also forward spreads in USD.
In November 2021, Bloomsbury Natural Capital Limited (BNC) made its first investment in macro-algae cultivation: in Cascadia Seaweed Corp of British Columbia, which is growing to become the largest provider of ocean cultivated seaweed in North America. BNC now owns 4%+ of Cascadia and is looking for further fully commercial investment opportunities in macro-algae cultivation in other geographies as well. In mid-August 2022, BNC made its first investment in forestry-related services, Xilva AG of Switzerland, which provides a digital global marketplace, bringing together capital and forest-positive projects.
In June 2022, Bloomsbury Information Capital (BIC) made its first investment in an I.T.-intensive business: Progressive Growth Partners Pty Ltd of Australia, trading as ‘Mutiny’, of which BIC owns 5%. Mutiny has a leading SaaS platform which stores, manages, tracks, analyses and reports marketing and sales data. BIC participated in an AUD 2.4M funding round which will finance a 200% expansion, enhancing capability to drive self-service on-boarding and generate automated insights for customers. Expansion into the USA is planned. Other BIC investments will follow.
In the beginning! In 1993, BME launched the “Copper Briefing Service”, a 12-page monthly report in easy-access newsletter style but with rigorous forecasts two years ahead of mine, smelter & refinery production, and refined consumption, country-by-country and globally, market balance and stocks, prices, plus treatment & refining charges (TC/RCs) for custom concentrates (copper in ore minerals) and RCs for blister (unrefined) copper. That was a level of analysis which BME supplied monthly but which competitors mostly only provided in quarterly or annual reports. Twenty-eight years ago, it was a fore-runner of today’s high-frequency or continuously updated analytical services.
In 2001, Adam Sotowicz began BME’s mathematical modelling of the cash prices and (uniquely at the time, we believe) forward spreads of copper, nickel, aluminium, zinc, lead and tin. Price drivers were the rate of global industrial production (IP) growth (based on a unique – and superb – data series from CHR), LME stocks, exchange rates and, for the spreads, also interest rates. At that time, there were two quite separate schools of thought on base metal prices. For price drivers, single-metal specialists mostly followed market balances and stocks, while multi-commodity analysts mostly believed in turning points in the global IP cycle. Adam’s models provided a breakthrough: they showed that it was the interaction between IP growth rates and stock levels that drove both prices and spreads – a unified theory of price.
That radical insight brought great clarity and accuracy to BME’s forecasting of LME cash prices and forward spreads. This was widely noticed and, at the request of a Hedge Fund, a subsidiary, BME Price Models (BME PM), was set up in 2004 to provide traders with fundamentals-based models of prices and spreads for the LME metals, as well as Expert Systems that incorporated ‘Quant’ techniques to complement traditional technical analysis. From 2005, BME PM also became the first company to incorporate into its fundamentals-based models the impact of the financial community’s new investment vehicles in physical metals, futures and options, which introduced long-side bias to the market: a price bubble. The financial community’s long positions in commodities rose from $75 Bn in 2005 to $400+ Bn in 2012.
Performance fees from the Hedge Funds models brought BME PM and BME itself profits that are believed by its founders to have exceeded both CRU’s and Brook Hunt’s (BME’s much larger rivals) for several years, and BME quietly became a significant investor in other companies servicing the metals, minerals and mining sectors, but outside price forecasting (of which BME was starting to take a jaundiced view, given the bubble which was then developing).
In 2006, BME bought into Mining Communications – the owner of Mining Journal and the Mines & Money conferences – when the venture capital shareholders were being bought out. In 2008, BME bought a 10% stake in (the original) FastMarkets, which ran the websites TheBullionDesk.com, BaseMetals.com and MinorMetals.com. In 2009, BME participated in a refinancing of Intierra, of Australia, which went on to acquire RMG and become IntierraRMG. Those companies went into trade sales as the investments matured. BME also bought its own office building in London.
In 2010, BME bought into the Roskill Group and owned 40% of it before its sale in June 2021 to Wood Mackenzie. The Roskill Group comprises Roskill Holdings and four wholly owned subsidiaries: Roskill Information Services, Roskill Consulting Group, Roskill Pariser in Germany and Roskill (Shanghai) Business Consulting in China.
Roskill covers over forty commodities: electric vehicle and battery raw materials, copper, hi-tech materials (including rare earths), steel and alloying elements, minor metals, industrial minerals, carbon and chemicals.