Robert Friedland: Copper is a national security issue
Mining companies will have to be “real heroes” and governments will have to accept the industry if the world is to successfully transition to clean energy and transport, said Friedland, founder and co-chairman of Ivanhoe Mines Ltd., which explores and develops mines in Africa.
The world is yet to grasp the scale of disruption in replacing fossil fuels, with most people in urban areas unaware of where materials in everyday life come from, he said.
While the 70-year-old billionaire is taking a long-term view, his words of warning contrast with those of some of his colleagues at the conference who are reluctant to accelerate growth plans in a cyclical market, reports Bloomberg.
His comments seem more in line with bullish analysts such as Nicholas Snowdon of Goldman Sachs, who predicts record-high prices as the metals heads towards the tightest conditions since the mid-2000s.
Mining is suffering from years of underinvestment, with America very under-explored because for 20 or 30 years “it wasn’t cool to mine,” Friedland said. Where future supplies come from “is going to be a matter of fervent debate” as will how to tax and regulate them.
Massive investments are needed to electrify economies. The US power grid, which “is a joke” compared with China’s, needs $10 trillion and “astronomic amounts” of the right metals to get up to scratch, he said.
“In the short term, we’ve had a big rise in the price of copper,” Friedland said. “But for the medium term, copper has really become a national security issue. It’s central for what we want to do with our economy.”
While the industry should now be seen as part of the solution in global decarbonization, it also faces challenges to decarbonize, he said. Ore quality around the world is deteriorating, meaning volume has to rise and carbon emissions increase. Mining will need both hydroelectric and nuclear power as well as renewable, he said.
People should expect a carbon tax on everything, he added.
Speaking at the Mines and Money conference in London in 2019 , Friedland commented: "Copper demand is going to be psychedelic!" The numbers back up the self-confessed “ex-hippy” and his predictions for an exponential rise in demand. The average petrol engine vehicle requires 20kg of copper, a hybrid 40kg, and a plug-in EV 109kg, while the cars of the future will need as much as 163kg of the metal. EV sales are expected to rise from 2 million units in 2018 to 21 million units by 2030.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.