Video: Nuclear will help but fossil fuels aren’t leaving, mining investor Gilchrist says

The world will never be able to produce enough metals for a green energy transition without fossil fuels and more nuclear plants, says Brent Gilchrist, CEO of investment firm Deans Knight Capital Management and president of JDS Resources.

Global copper production was about 21 million tonnes last year, but the energy transition requires 4 billion tonnes for the first generation of fossil fuel phase-out, Gilchrist said at the Energy Transition Metals Summit in Washington, D.C. Lithium output was 100,000 tonnes in 2023 but a billion tonnes is required for the first generation of infrastructure that will phase out fossil fuel, he added.

The world has spent US$6 trillion mostly on solar, wind and energy storage over the last four years to make them 6% of the power grid, he said, citing the International Energy Agency.

“The solution is we have to move to more nuclear. We have to learn how to use our fossil fuels more efficiently,” Gilchrist said in a solo presentation April 29 at the event organized by The Northern Miner. “The infatuation with solar and wind is slowing real progress down.

“I’m not saying that solar and wind aren’t part of the solution, but no chance the energy molecules we produce from wind and solar can run this planet. And it can’t feed and house eight billion people.”

 

The summit, run in coordination with Precious Metals Summit Conferences, attracted some 500 delegates and 64 companies over April 29-30. Other speakers included Rob McEwen of McEwen Mining (TSX: MUX; NYSE: MUX), Cameco (TSX: CCO; NYSE: CCJ) CEO Tim Gitzel and Hecla Mining (NYSE: HL) CEO Phil Baker. 

Entire economy

The mining industry would be the planet’s entire economy if it had to produce 4.7 billion tonnes of copper every year, said Gilchrist. JDS previously developed and subsequently sold the Silvertip mine on the Yukon-British Columbia border and holds the Harmony gold project in B.C.

He said the four modern pillars of our civilization are steel, plastics, cement and ammonia for fertilizer, according to the book How the World Really Works. It’s by Vaclav Smil, a distinguished professor emeritus in the faculty of environment at the University of Manitoba in Winnipeg.

“We really don’t have a legitimate way to produce any of those materials without fossil fuels at this time,” Gilchrist said. “I’m not saying in the future that it’s impossible, but we’re not really scratching the surface.”

Commodities outlook

He said he doesn’t forecast commodity performance but is bullish on most of them. Hydroelectric power is great where it can be produced, but there should be discussions about building more nuclear plants, he said. 

China is building them, but they’re also building scores of coal-fired plants.

“We have to get the politicians to listen and regulations just have to be changed. It has to be easier to permit these things. It has to be easier to build them. The level of safety and the engineering is insane,” he said. “We know all three nuclear accidents that have happened in the last 60 years. We know them all. That’s damn safe if we can name them.”

Fossil fuels will be sticky to replace considering that the 100 million barrels consumed every day would take the energy of 500 billion workers to replace, he said.

“I’m not discounting the fact that how big mining is going to have to become to put any dent in fossil fuel consumption. But that’s what we’re talking about, right? We’re talking about minerals as the new oil.”