That’s why copper is a national security issue
What Happens to Copper? Facts and analysis
According to Robert Friedland – one of the most important mining entrepreneurs in the world, co-president of the Canadian company Ivanhoe Mines – copper hoarding has become a matter of national security.
Due to its qualities as a conductor of electricity and heat, copper is a crucial metal in the electrification process of the world economy. Commodity trading company Trafigura predicts that rising global demand will drive prices above $ 15,000 per ton.
For Friedland, the mining companies must then be the “real heroes” of the situation and guarantee the satisfaction of needs. Governments, on the other hand, will have to embrace this industry if they are to ensure successful transitions to clean energy and mobility.
"IT'S ALL COPPER"
In his speech at the CRU World Copper Conference last week, Friedland said the world has yet to grasp the extent of fossil fuel replacement, and that most people in urban areas are unaware of where the materials needed in everyone's life come from. the days. "It's all copper, copper, copper, copper, copper, copper."
Friedland's are long-term perspectives, but they are not shared by all of his colleagues in the mining sector. Although the value of copper has already risen a lot, Iván Arriagada – CEO of the Anglo-Chilean mining company Antofagasta – for example called for caution and recalled the high price volatility.
For Trafigura, on the other hand, we have entered a "super cycle". And analysts at the Goldman Sachs bank also think copper prices will soar as the market contracts.
COPPER AND NATIONAL SECURITY
Friedland acknowledges that the mining sector suffers from a multi-year situation of underinvestment. America, in particular, has not been explored enough because for twenty to thirty years "digging was not good". For Friedland, the origin of the next copper supplies will then be “the subject of a fervent debate”, which will also concern their taxation and regulation.
Copper is a crucial component in “clean” energy infrastructure, from wind turbines to power grids. The US power grid – which President Joe Biden wants to decarbonise by 2035 – "is a joke" compared to China's, Friedland said, and will require $ 10,000 billion in investments and "astronomical quantities" of metals.
“In the short term, we have had a sharp rise in the price of copper. But for the medium term, copper has truly become a national security issue. It is central to what we want to do with our economy ”.
THE PLAN OF BIDEN
Indeed, Biden's grand infrastructure plan worth over $ 2 trillion over eight years rests on access to copper.
According to the consulting firm CRU Group, the United States will need 110,000 tons of copper per year for every trillion it spends on infrastructure.
China is ahead on stocks. Last year, at the most critical moment of the coronavirus pandemic, Beijing took advantage of low prices to buy copper in large quantities (6.7 million tons). However, China imports about 85 percent of the copper it consumes from abroad.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/rame-sicurezza-nazionale/ on Sat, 24 Apr 2021 06:00:12 +0000.