Ivanhoe Mines Co-Chairman & Co-Founder Robert Friedland on Copper Prices, Greening Supply Chain

Ivanhoe Mines Co-chairman and Co-founder Robert Friedland says the copper market will face disruptions to both demand and supply if prices of the metal get too high. Tune in below to hear Friedland’s thoughts on whether or not copper could be the next shortage in the supply chain.

Friedland: We’re waking up to a shortage of everything. We’ve had this global experience of this virus, so we’ve all been home for a year, a year and a half, thinking about a better world. And when we come out of it, we’re seeing constraints in the supply chain and shipping in semiconductors and lumber and corn and of course, in the metals. But when you actually make the shift from hydrocarbon to an electrified world economy, the impact on copper and cobalt and other critical electrical metals is enormous.

Host: Robert, price is another reason for us to be having this conversation. A ton of copper is trading at about $10,000 right now, and most miners want the price as high as possible. And some analysts foresee $15,000 even $20,000. But as I understand it, you see risks in such high prices. What are they?

Friedland: First of all, the copper price hasn’t moved. It’s the United States dollar is fairly against copper. So if you think that a Bitcoin or ether is money, why isn’t copper money? It’s just priced in dollars. And so when governments go in an orgy of monetary creation. And I’m drinking the Kool-Aid that we’re seeing, you know, we’re seeing the white eyes of inflation coming. It’s really that everything is priced in these pieces of paper that are no longer printed. It’s an electronic ledger entry for the United States government. So since central banks have made money nearly free everywhere, you started seeing a rise in anything we need. And as a species, we desperately need these electrical metals. If we’re ever going to get off the hydrocarbon addiction.

Host: All the same, people are spending to buy the things made with those metals. If copper stays at 10 or rises to 15 or rises to 20, what happens? Are those things not good?

Friedland: In the mining industry. You could double the price of copper. This afternoon.

It won’t materially change the amount of copper we can produce in the next decade. It would help a little bit at the margin. Most governments would just come forward and say, that’s for me.

You’re here in my backyard, you’re mining my copper and you’re taking it home. So the question of sustainability, now has to be sold. The whole supply chain has to be audited.

So when I was a kid and I grew up, you know, there was that paper on the back of the Corvette. It told you what it cost. And all the options.

Then there’s a piece of paper coming out that says, how much global warming gas is produced per kilometer driven. The third piece of paper is going to say, how much global warming gas was generated to make that car. And this is what the automakers are concerned about, is that the whole supply chain is going to be audited to the bottom.

And that’s going to change everything, including the financial markets, I might add.

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