Mining Indaba: Robert Friedland sees Africa, Arabian Shield, as future of responsible mining

Global mining personality and financier Robert Friedland has singled out Africa and the Arabian Shield as the venues where the world’s future-facing minerals and metals will be responsibly produced.

“This is where humanity is going to make it or break it,” he told the Investing in Africa Mining Indaba, in Cape Town, on May 11.

The founder and executive co-chair of Ivanhoe Mines (TSX: IVN) pointed out that the large copper mines in Latin America are aging and declining in grade, requiring increasing amounts of fossil fuel-derived energy to process ever-increasing tonnages to keep up with historical production.

“They’re very low grade, and they produce a lot of global warming gas. They have a lot of work to do to make them green. It’s Africa where you have a young population where you have the possibility for introducing sustainable development,” he said during one of his usual ‘shock and awe’ bravado presentations.

Friedland said that to date, humanity has mined about 700 million tonnes of copper. The problem is that we’ll need to mine that same amount in the next 22 years to keep up with the deepening green energy transition.

“If we’re going to change and stop burning coal and stop burning oil, we can’t put Africa into poverty. We must maintain economic growth,” he said.

Friedland said that in the last 250 years, Europe has generated 531 billion tonnes of carbon dioxide emissions, and the United States alone has produced 416 billion tonnes of carbon emissions. “That’s how London got built. That’s how Germany got built. That’s how New York got built; Los Angeles,” he said.

British MP Greg Clark test driving a Nissan Leaf in Westminster. (Reference image by the Ministry of Housing, Communities and Local Govt., Flickr).

The relatively late bloomer China is catching up, creating 235 billion tonnes of emissions.

But in comparison, Africa has produced only about 47 billion tonnes. “Africa has produced almost no global warming, yet it has a total population larger than China’s. So, how do we get to a world without all that air pollution and with clean air while still being fair to the Africans? It’s a huge question,” he said.

The crux of the issue, in his view, is the urgent global need to reduce air pollution. According to the World Health Organization, air quality is the single most significant risk to health. Urbanization exacerbates this trend.

For this reason, the energy revolution is accelerating at an unprecedented cadence.

For example, Saudi Arabia wants to reduce their mineral imports and derive 50% of its energy from renewable energy. “When you look at renewable energy and want to reduce dependence on hydrocarbon, you need the mining industry. There’s just no escaping it,” he said.

The ‘electric-everything’ era

Friedland points out that the problem is that renewable technologies are “incredibly” energy and metals-intensive. We’re going to have a freakout as we try to change the world economy unless we develop a lot more mines,” Friedland said.

Solar and wind energy require between seven and 37 times more copper per unit of electrical energy produced than simply burning oil or having a nuclear power plant.

Workers at Ivanhoe Mines’ Kamoa-Kakula copper project, 25 km west of Kolwezi in the Democratic Republic of the Congo. Credit: Ivanhoe Mines.

“The new giant windmills as tall as the Eiffel Tower – these are the next generation ones – they’re 12 megawatts each. That’s a lot of power per windmill. In the U.S., we will need 5.5 million tonnes of copper just in the next few years to put up these big General Electric windmills. Where is this copper going to come from?” he said.

According to Goldman Sachs, the world had entered “a molecule crisis.” Chief executive Jeff Curry believes the world is running out of all minerals. “We’re out of everything. I don’t care if it’s oil, gas, coal, copper, aluminum – you name it – we’re out of it. We saw US$500 coal prices recently – that’s crazy,” he said.

Friedland continued to sketch a dire scenario where mining cannot keep up with the demands of the energy revolution.

By 2030, 20 million EV charging points will need 250% more copper. By 2040, passenger EVs will require 3.7 million tonnes more copper per year. In contrast, internal combustion engine-driven vehicles need only about 1 million tonnes of incremental copper.

“We need eight new Kamoa-Kakula mines to supply the expected nine-million-tonne copper supply gap by 2030,” he said.

(Friedland’s Ivanhoe Mines has several mines and projects in Africa, including Kamoa-Kakula in the DRC, which began producing copper concentrates in May 2021. Through phased expansions, Kamoa-Kakula is positioned to become one of the world’s largest copper producers, and will be powered by clean, renewable hydro-generated electricity.)

At the world’s largest copper mine, Escondida, grades are falling. Its energy needs increased 16-fold to produce the same amount of copper. Meanwhile, social upheaval in South America against climate change and mining is ironically impeding its potential role in the emerging green economy.

Wood Mackenzie, in 2021 said the world needs to invest US$240 billion in the next five years to meet growing demand. “That’s a pretty big number. We put about US$2.5 billion into the Democratic Republic of Congo (DRC). We’re probably halfway through our current expansion of about US$5 to US$6 billion of capital investment required. And this is the best development project on a planetary scale,” he said.

According to Friedland’s data, a single 1,000-lb. electric vehicle battery requires 500,000 lb. of raw material. “To transition just the world’s passenger cars to electric, we have to mine more materials in the next 30 years that we mined throughout human history,” he said.

“Tesla expects a global battery minerals shortage. Maybe, therefore, Elon Musk was selling a few shares. He’s blaming it on a Twitter poll; remember that. But perhaps he realizes there won’t be enough metals around to satisfy these ambitious growths charts,” Friedland said.

And now Mercedes has come out with a 1,000 km-range vehicle on a single charge, he noted. “Shouldn’t everybody in Africa have a car like that? Why not? But how do we get there from here? We must change the way we generate electrical energy. We have to change the way we transmit electrical energy, changing the way the whole supply chain is driven. We need orders of magnitude more responsible mining to achieve this,” Friedland said.

‘Hydrogen century’

With that, Friedland heralded the advent of the “hydrogen century” for South Africa.

He noted South Africa is home to the most significant platinum-palladium assets globally. No one has figured out how to use the most common element in the universe, hydrogen, without platinum.

“The hydrogen economy is opening soon at a theatre near you,” he said.

Friedland pointed to examples of the hydrogen economy already taking off.

Airbus is testing a hydrogen-powered engine on an Airbus 380 Jumbo. “The only thing coming out of those engines is water, water vapour. But you can’t do it without platinum metal. And the British want to convert every train to hydrogen fuel cells, eliminating all diesel engines on the trains,” he said.

According to Friedland, the hydrogen fuel cell technology entirely depends on South African platinum. “We’re not going to buy it from the Russian Tsar. He’s killing people with his cash flow. Until he stops that kind of behaviour, we will not buy his platinum. Certainly not in Europe, not in the United States and certainly not in civilized countries who think about the moral imperative of the supply chain,” he said.