In May, copper posted a record high $5.11 per pound. 

With the price of copper at $4.23 today, the price falls “woefully short” of supporting R&D among miners, says Robert Friedland — founder of Ivanhoe Mines. 

“Recent copper mine builds in Chile and Peru, jurisdictions once credited for having among the biggest and cheapest copper mines, have seen costs soar to about $45,000 per tonne… due to inflation, steadily falling grades and dropping output,” says Mining.com.

Copper concentrate fills a railcar in Peru

Turning from South America to Asia: “Copper prices may rise past the $10,000-per-tonne ($4.54 per pound) mark again in the near term due to a Chinese smelter supply shortage and grid investments in China.”

Which leads to Friedland’s blunt assessment: “The world is suffering from a shortage of copper metal.” 

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Your Rundown for Wednesday, July 24, 2024...

Digging Deeper…

At the recent Rule Symposium on Natural Resource Investing, Friedland claimed copper is “the most important element on the periodic table for humanity.” 

He highlights, for instance, its crucial role in emerging technologies like renewable energy (solar, wind, etc.), EVs, AI data centers and modern warfare. 

(In fact, Friedland believes military demand for copper “is going to go to infinity in the next few years.”)

Beyond high-tech applications, Friedland points out the massive copper needs for basic quality-of-life improvements worldwide — especially the developing global South. 

Electric fans, air conditioners, refrigerators, ICE vehicles… 

“Certainly in the developing world, from Paraguay to Pakistan, when people get some new money they buy a microwave oven, refrigerator, air conditioner which all rely on copper,” Paradigm’s energy-and-mining authority Byron King agrees. 

“There is no rational price for something you absolutely must have,” Friedland adds. 

On the supply side, Friedland expresses concern about the U.S. lagging behind other countries, particularly China, in raw materials production. 

“We see a crisis coming in physical markets and a requirement for much higher prices to enable most of the copper projects that are in development to have a prayer coming in,” Friedland adds. 

Nonetheless, he’s optimistic about new exploration technologies and American ingenuity to address supply challenges:

• Ivanhoe Electric's Typhoon technology, for example, can spot electrically conductive metals like copper, gold, silver and nickel beneath the Earth’s surface. “In May, Ivanhoe Energy announced an alliance with BHP to use Typhoon to explore areas of interest in Arizona, New Mexico and Utah,” says an article at Investing News Network. 

To wit, Friedland strongly believes in copper as an investment, saying: “I don't think any intelligent portfolio can be constructed without copper exposure.” 

This as so-called “generalist” investors “are on the cusp of becoming interested” in metals and mining stocks, the article notes. 

Finally, there’s this stand-out figure… 

“Humanity would have to mine more copper in the next 20 years than we have in human history to meet surging global demand,” says Mining.com. 

Market Rundown for Wednesday, July 24, 2024

S&P futures are down 0.80% to 5,550. 

Oil is up 1.25% to $77.93 for a barrel of WTI. 

Gold is up 0.50% to $2,418.80 per ounce. 

And Bitcoin is up 1% to $66,400. 

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