Robert Friedland, founder and executive co-chair of Ivanhoe Mines (TSX: IVN), says the West shouldn’t go to war over Taiwan because it needs investment from China to mine metals for the global green energy transition.
Canada’s order last year for China to divest from Canadian companies’ critical minerals projects deprives junior miners when investment bank Goldman Sachs says US$2.8 trillion is needed to meet carbon-zero targets this decade, the legendary financier told hundreds at the PDAC conference on Sunday in Toronto.
“We’re going to have to find capital from Americans or Saudis or sovereign wealth funds, but we need a lot more money coming to junior mining, orders of magnitude more,” Friedland said. “So, I’m all in favour of not going to war over Taiwan.”
The integration of the world economy peaked in about 2008 when China was buying about half the world’s copper and making almost everything the world consumed, Friedland said. Since then, the global economy has lost trillions of dollars through balkanization and trade wars after former president Donald Trump imposed tariffs on Chinese goods that President Joe Biden hasn’t rescinded.
“So, we see a gradual, slow drift towards war between America and China,” he said. “This is a very bad idea. We should compete like the Harvard-Yale football game and break each other’s collarbones according to a set of rules.”
Ore-smashing tech
In a speech ranging from the solar system’s 230-million-year orbit around the Milky Way to Ivanhoe’s startup next year of the world’s largest precious metals project, Flatreef in South Africa, Friedland also mocked the U.S. Inflation Reduction Act and promoted the potential of the Democratic Republic of the Congo where Ivanhoe and China’s Zijin Mining own the Kamoa-Kakula copper mine.
He also touted new technologies he says will cut 99% of the energy used to pulverize ore and slash the time to make a lithium battery from brine to three days from 19 months.
Friedland said mining is under increasing pressure to produce green energy metals and ran through a series of statistics: 2.3 billion people have migrated to cities over the last 35 years, people breathe the most carbon dioxide in the air in 2 million years at 420 parts per million, and the Russia-Ukraine war has fired 50,000 tonnes of copper into oblivion using just one type of artillery shell among many.
He also said electric vehicles hit a 10% market share in 2022, eight years ahead of a forecast by the International Energy Agency, and renewable energy capacity reached 320 gigawatts last year, about equal to 320 nuclear plants.
“So, the United States government initiated the U.S. inflation creation act setting aside US$370 billion,” Friedland said. “You know, when there’s a problem, go to the government, they’ll solve it for you. Of course, there’s going to be a freakout fighting over this money.”
However, Friedland said he’s open to getting some of that funding to join the US$900 million invested in Toulouse, France-based I-Pulse that includes money from the Bill Gates- and Jeff Bezos-backed Breakthrough Energy Ventures. Friedland is chairman of I-Pulse, which uses high-energy bursts to shatter rocks and mineral ores with a fraction of the energy cost and greenhouse gas emissions in conventional mining.
The company signed a deal in December with BHP (NYSE: BHP; LSE: BHP; ASX: BHP) to further develop the technology that I-Pulse subsidiary Ivanhoe Electric (TSX: IE) may soon market, Friedland said.
‘Mission from God’
“We’re sort of like on a mission from God like in The Blues Brothers to completely change the way we’ve operated in mining for about maybe 1,000 years,” Friedland said. “We’re pulling rock apart with electromagnetic pulses.”
Similar pulses can be used to explore for deposits underground like the so-called X-ray glasses advertised to boys in the back of comic books to see through clothes, he said.
“We have a magic pair of glasses that allows us to directly see deep mineralization in the earth with very high resolution,” he said. “It’s all based on signal-to-noise ratio in the geophysics and machine learning for the software.”
Friedland’s breakthrough in lithium batteries comes via Ivanhoe startup Pure Lithium in Boston and the help of Donald Sadoway, an emeritus professor at the Massachusetts Institute of Technology.
“This is a battery with lithium metal which is very disruptive and frees you from the requirement to use nickel and cobalt,” Friedland said. “It’s a very high-quality battery.”
The financier criticized measuring mining projects with calculations of net present value, saying they are more applicable to oil and gas projects instead of mining, where US$690 billion in new copper mines are needed over 30 years, according to consultant Wood Mackenzie.
China doesn’t use net present value but is a chief investor in companies such as Ivanhoe Mines, copper producer First Quantum Minerals (TSX: FM) and giant Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO), he said.
“It’s really hard to raise money for mining because the bankers assign a discount rate of eight, ten or 12%,” he said. “The Chinese, they just said ‘we’ve got 1.3 billion people to feed, we’re going to need this copper’.”
Good points! All about clean air for humans. This is basic for our life.