Ivanhoe founder says copper prices could jump tenfold
In an interview with Bloomberg, the founder and executive co-chairman of Ivanhoe Mines Ltd, Robert Friedland says he fears copper prices could jump tenfold. In his words, "My fear is that when push finally comes to shove," copper can go up ten times.
The billionaire miner who made his fortune from Canadian nickel and is behind massive copper finds in Mongolia and the Democratic Republic of Congo warns of a copper 'train wreck' as supply stalls. He made his fortune from Canadian nickel and is behind massive copper finds in Mongolia and the Democratic Republic of Congo warns of a copper 'train wreck' as supply stalls.
He asserted that copper is poised to follow other commodities upended by recent price surges as the mining industry struggles to expand ahead of accelerating demand. Indeed, critical raw materials are essential for the modern economy, with minerals such as lithium, cobalt, and copper used for digitalisation, renewable energy technologies, and the deployment of electric vehicles.
These applications have increased the demand for these and other minerals. They are even set to jump further as nations mandate clean energy and transport while clambering to develop their supply chains.
Production of copper in relation to supply and demand
Friedland shared that deposits are getting pricier and trickier to find and dig up, funding is scarce, and societies have yet to grasp mining's role in the shift from fossil fuels, suggesting supply may not be able to keep up with demand.
Copper futures are down 10% from a January peak. Some of the factors responsible for this are an uneven post-pandemic recovery in China, the world's biggest metals consumer, and the restraints on demand caused by the inflation-fighting efforts of central banks. Despite these, Friedland sees copper's long-term prospects supported by decarbonisation, ongoing Chinese demand, the emergence of India, and re-militarisation in the wake of Russia's invasion of Ukraine.
However, on the supply side, output in Chile, the top producer, has plateaued, with the world's biggest copper company, Codelco expecting production to fall as much as 7% this year after tumbling in 2022.
Friedland said that investors have yet to grasp the significance of a global rush for the building blocks of clean energy. For the magnate, his latest mining bet is on the US as Washington is realising the importance of domestic sources of raw materials and supply chains for greening the economy. According to Bloomberg, his company Ivanhoe Electric Inc., which has BlackRock Inc. and BHP Group as investors, is exploring Arizona.
"Europe is in a panic about where their raw material is going to come from," Friedland said. "The US is in a panic about where their raw material is going to come from. And so we're going to see a lot of volatility and change in the way our supply chain is organised." he concluded.