“We need more copper in the next 20 years than was mined in the last 110 years,” Ivanhoe Chairman Robert Friedland said today at the Diggers and Dealers conference in Kalgoorlie, Western Australia. “Those of us in the business don’t have any idea where this metal is going to come from.”
The Oyu Tolgoi mine, described by Rio Tinto as the world’s largest untapped copper and gold resource, is expected to produce an average 1.2 billion pounds of copper annually for the first decade. Copper futures in London and gold prices have gained 23 percent and 25 percent, respectively, in the past year.
“China will always remain the future for miners,” Friedland, 59, said. “In the next 20 years the world needs 600 million tons of copper metal, absent the phenomenon of electric cars. Cars are going to be electric.”
Copper is used in lithium batteries, which power electric cars, and construction, with China the biggest user. Construction accounts for a quarter of demand, according to the Copper Development Association, and builders are the biggest users in the U.S., the second-largest consumer of the metal.
Three-month copper on the London Metal Exchange lost as much as 1 percent to $7,353 a metric ton today. The price touched $7,510 on Aug. 2, the highest level since April 29. Gold for immediate delivery advanced to a record $1,266.50 in June and is set for a 10th straight annual gain, the longest winning streak since at least 1920.
Vancouver-based Ivanhoe said last month it plans to scrap an accord limiting its ability to bring new investors into the $4.6 billion Oyu Tolgoi project, intensifying a dispute with Rio Tinto, its largest shareholder.
Friedland declined interview requests today. Ivanhoe spent more than six years negotiating an agreement with the Mongolian government on the Oyu Tolgoi project.