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Robert Friedland, one of the leading figures in the natural resources industry and the founder of Ivanhoe Mines, has made a notable assertion about the future of the copper market. Basing his perspectives on his comprehensive understanding of the industry and the accelerating need for new energy solutions, Friedland believes we are about to enter a phase wherein the demand for copper will outpace the supply by an enormous extent.
Copper, dubbed as a ‘miracle metal’, serves as an integral commodity in the development of advanced technological devices such as electric vehicles, wind turbines, and solar panels. The transition to green energy solutions and reducing carbon emissions has elevated the importance of copper exponentially in the global market.
Friedland, during his keynote presentation at the Mines and Money Online Connect Event last March, emphasized the skyrocketing demand for copper. He noted that the exploitation of copper for green energy, 5G technology, and electric infrastructure would eventually culminate in an ‘essentially infinite demand.’
However, this surge in demand would inevitably clash with the shrinking supplies of copper in the global market. The scarcity factor is complicated by depleting ore grades in copper mines and the looming difficulties in creating new copper mines. Concerns over environmental impact, legal complexities, and technological constraints result in a slower process, hence a delay in meeting the burgeoning demand.
A juxtaposition of the surging demand and diminishing supply result in a somewhat chaotic situation in the market. Friedland addressed this by stating that there would be no rational price for copper within five years from now. He further explained this by highlighting that the price of copper would essentially be determined by the buyer’s desperation. The prevailing principle of ‘The highest bidder takes all’ will replace standard economic principles of supply and demand.
This predicament faced by the copper industry reverberates with a broader crisis – the acceleration towards a green energy future. Copper plays a pivotal role in our move to cleaner, more efficient energy systems. Therefore, the necessity for stability in the copper market cannot be overstated. Policymakers, industry leaders, and influencers like Friedland have the onus to heed this as a significant economic and environmental concern.
An additional concern Robert Friedland points out is the significant underinvestment in mining exploration over the last decade which exacerbates the supply-demand tension. Analysts estimate that to meet the burgeoning demand for copper, significant exploration and developments in new mining technologies are required.
However, it will also require a nuanced balancing act between economic growth, environmental protection, and social acceptance. This is especially the case because indigenous communities are often disproportionately affected by mining activities. Hence, Friedland’s vision of the future of copper serves as a wakeup call for reinventing and adapting the industry’s practices to the changing times.
In a nutshell, it appears that the world is at the precipice of a copper crisis and radical actions are required. If not addressed timely and effectively, we may have to grapple with a more profound crisis – a delay in the transition to clean energy and escalating carbon footprints. Diverse stakeholders, from policymakers to the mining industry, need to rise to the occasion and tackle this challenge head-on. The compensation for this urgency could indeed result in a future where our energy is cleaner, our technologies are advanced, and our planet is healthier.