BY TRISH SAYWELL
Describing many of the world’s current copper projects as “old ladies waiting in bed to die,” Robert Friedland, chief executive of Ivanhoe Mines (ivn-t, ivn-n), told analysts and investors at the Denver Gold Forum last month that if they were “going to buy one metal, buy copper.”
The mining entrepreneur cited copper’s role in the production of electric automobiles as a key factor in rising demand for the metal. “It’s very clear we’re heading to an electrical world in transportation,” he continued. “We’re not going to have electrical airplanes, but anything that moves on the ground is going to move on copper. . . You need copper for an electric car.”
According to Friedland, a typical hybrid automobile contains about 300 lbs. more metal than comparable non-hybrids, including an extra 50 lbs. of copper. The new age of all-electric cars, plug-in rechargeable hybrids and gasoline-electric hybrids has automakers lining up supplies of copper and weight-saving aluminum, he explained to delegates at the show in Colorado.
China is already consuming 30% of the world’s copper supply, up from about 10% a decade ago, he said, and “it’s frightening what will happen in the next decade.” In a Sept. 30 research report, Citi Investment Research wrote that copper is “well positioned due to supply-side constraints” that span “shortfalls at current mines, delays at mega-projects, and contract cancellations by host governments.”
For next year, Citi forecasts the price of copper will be about US$3.65 per lb. But that figure is below its previous forecast of US$4.75 per lb, due to the current economic climate.
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