Robert Friedland on the World's Monumental Shortage of Copper

Copper demand is booming, with the metal surging another 15% this year. Copper demand has always been tightly linked to economic activity, but now it's in overdrive, thanks to data centers, electric cars, and the global push to reindustrialize everywhere. Copper prices are also rising because it's caught in the crossfire of trade wars and resource nationalism; the US is expected to place tariffs on the refined metal. According to today's guest, Robert Friedland, the founder and executive co-chairman of Ivanhoe Mines, we're not even close to having enough copper for what's coming. We talk to Friedland about opening and running copper mines around the world, and what he's learned in his 40-year long career in mining (which includes a cameo from Steve Jobs). See Odd Lots live in Los Angeles! https://events.bloombergevents.com/event/ODDLOTSLA/summary Read more: Copper Steadies With Dip-Buying From Funds, Chinese Industry https://www.bloomberg.com/news/articles/2026-09-11/copper-heads-for-weekly-loss-as-doubts-on-us-tariffs-intensify?utm_medium=referral&utm_source=podcast&utm_campaign=odd_lots&utm_content=article Only http://Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlots Join the conversation: discord.gg/oddlots See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Joe Weisenthal?

  Hello, Odd Lots listeners. I'm Joe Weisenthal.

• 0:06Tracy Alloway?

  And I'm Tracy Alloway.

• 0:07Joe Weisenthal?

  We're the hosts of the Odd Lots podcast, and we've got something exciting for you.

• 0:11Tracy Alloway?

  That's right. So, one of the best parts of hosting our podcast is we get to actually meet and interact with our listeners. And we know we have some listeners over in Los Angeles.

• 0:21Joe Weisenthal?

  That's right. So, if you're in LA, we're going to be recording a live show, some live recordings, at the Vermont Theater in Hollywood on September 17.

• 0:30Tracy Alloway?

  We have some really exciting guests lined up, have some really great conversations planned. So, go ahead and get your tickets. You can find those over at Bloomberg.com/oddlots, or click the link below in the show notes, and come and say hi when you're there.

• 0:49Speaker 02

  Bloomberg Audio Studios. Podcasts, radio, news.

• 1:04Joe Weisenthal?

  Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.

• 1:10Tracy Alloway?

  And I'm Tracy Alloway.

• 1:11Joe Weisenthal?

  Oil has been in the headlines a lot lately.

• 1:14Tracy Alloway?

  Just a bit.

• 1:14Joe Weisenthal?

  For obvious reasons. But, you know, it has gotten headlines, but another commodity that's near basically at record highs, that just keeps to be going straight up for years now, is copper.

• 1:27Tracy Alloway?

  Yeah. So, copper, I think, reached a new high of, it was something like 14,875 a ton earlier this week. It is down about 3% as we're recording this episode, but I think it kind of speaks to, I guess, one of the tensions when it comes to copper, which is, everyone has been saying, or a lot of people have been saying, that there is this long-term, strong demand impulse for copper, because data centers use copper, we need it to electrify the grid, all of that stuff. And yet, the price has often lagged behind. And moreover, you get this volatility that means people who actually produce copper are sometimes reluctant to increase production. And in fact, I was looking at a note from

• 2:12Tracy Alloway?

  our colleagues over at Binif recently, and they were saying that this year, we might have the first decline in copper production since 2017.

• 2:22Joe Weisenthal?

  I mean, this is part of why so-called, like, supercycles can happen. And we've talked about this in so many different roles, both with the pure, like, sort of like, resource extraction industry, but even now, there's sort of like manufactured goods, like if we're talking about memory, which is you can have these, like, periods of volatility. You don't really want to invest more during periods of volatility. Then you sort of have, like, a scarcity of capacity. Then it ramps up the price, and then it's like, oh, build more, but then it's like, everyone remembers that.

• 2:52Tracy Alloway?

  Memories are long, right. And we saw that in shale as well.

• 2:54Joe Weisenthal?

  Memories are long. And then, you know, it's like, I guess it's human psychology. Everyone finally taps at the same time, and they're like, you know what? We're going to massively expand mining operations, which don't happen overnight by any stretch. And then suddenly, you get gluts, and your shareholders get mad at you, etc. Why don't you just ride this wave, etc. And so, these things can then just persist and feed on each other for a long time. But to your point, it's a crucial, you know, there's so much interest these days in resource nationalism, infrastructure, electricity, and so forth, and copper really is at the center of it.

• 3:30Tracy Alloway?

  Did you see, this is a slight tangent, but did you see the tweet from Peter Schiff?

• 3:34Joe Weisenthal?

  No. What did he say?

• 3:37Tracy Alloway?

  "With copper at 6.85 per pound, the melt value of a pre-1982 penny is 4.5 cents." And he calls it, he calls melting pennies, not only risk-free, but the upside potential is huge. Which is kind of funny, because I'm pretty sure that melting down US currency is in fact illegal in the US. And so, there might be a little bit of a risk there.

• 4:02Joe Weisenthal?

  I also, like, think about, like, how much legwork and effort you would have to do to even, like, find a bunch of pre-1982 pennies, and whether that would come to more than three pennies each, when you think about the effort. Anyway, but yes, copper.

• 4:18Tracy Alloway?

  I mean, that said, I mean, that tweet is funny for many reasons, but there is a lot of supply, copper supply, that comes from recycling, and that is in tension with the new production as well. So, we should talk about that.

• 4:29Joe Weisenthal?

  And that is an important element. Anyway, we got to do a copper episode, and this time, we're going to be speaking with someone, like, right in it. Someone who has, like, make these decisions about investment, how sustainable it is, what's optimal, and the cost to build out new capacity, how these calculations actually work. We literally have the perfect guest today. We're going to be speaking with Robert Friedland. He is the founder of Ivanhoe Mines, Ivanhoe Electric, a new startup called iPulse, which we're going to learn about. He has been in the industry for over 40 years, literally getting his hands dirty in pulling copper out of the ground. So, Robert, thank you so much for coming on Odd Lots. Thrilled to have you here.

• 5:14Speaker 03

  What a pleasure to be in the New York studios. And I just had the opportunity to meet Mike Bloomberg, which is amazing.

• 5:20Joe Weisenthal?

  This is great. You know, I've always said, well, I work at Bloomberg, it's like the old ESPN commercials, where you, like, walk around, and you get to, like, meet all these luminaries just milling about the office, including our boss. Why don't you give us a, for those who don't know, why don't you give us a little bit of overview of Ivanhoe Mines, and just, like, the portfolio of things you work on? What is, what does it all add up to and look like?

• 5:44Speaker 03

  Well, in life, you know, you tend to learn more and more about less and less. We've been in the mining business for over 40 years globally. And in recent years, Standard and Poor's has declared copper as the new oil. We used to fight wars over crude oil. I doubt we would have gone after Saddam Hussein was shock and off. There was absolutely no oil in Iraq. But today, the supply chain, which is a mystical concept to most people, is being balkanized in competing geopolitical groups. There's a war going on that's spreading, affecting the strato-hermuts and other critical materials. And copper is central to everything

• 6:29Speaker 03

  we do. This super high-technology studio, which is enabling us to talk to the whole world, is completely dependent on copper, and more importantly, on mining, because everything you touch, we either mined it, or we grew it agriculturally. And the farmers are totally dependent on mined product anyway, like fertilizer or their tractors. So, it is time to talk about copper's role as a paradigm for a suite of critical metals, without which we're really going to have severe problems.

• 7:01Tracy Alloway?

  Can you give us your sort of origin story? How did you get into mining? Why were you interested in the space?

• 7:07Speaker 03

  This is a strange and bizarre story, but Steve Jobs and I had a partnership that goes way, way, way back. Our partnership agreement was stolen, and has been sold on the secondary market to a movie producer. But Steve and I were 50/50 partners, where I was the general partner, and he was the limited partner. And we financed it by a loan from the Bank of America on his Apple shares.

• 7:33Joe Weisenthal?

  Wow. What year are we talking about here?

• 7:35Speaker 03

  Oh, it would have been in the 1980s. And we went out and started buying timberland, because we thought we were going to be rich hippies. And trees grow about 6% a year, just leave them alone. Douglas fir trees. He thought we'd just live in a teepee and get rich, as the decades went by.

• 7:52Tracy Alloway?

  That's the dream, being a rich hippie, I got to say.

• 7:54Speaker 03

  Yeah. And what happened was, some of this timberland we bought in Oregon, there was an old gold mine that had been closed down in 1942. I don't know if you're aware, under executive order L208, Franklin D. Roosevelt shut all the gold mines to force the miners to mine lead and mainly copper and zinc for the war effort. And in fact, during the war, for three years, we made our pennies out of zinc, rather than copper, because copper was so critical to World War II. In World War I, the price of copper went to the moon. William Randolph Hearst owned the Butte, Montana copper mine, and with that, he bought up all the media in the United States and built the Hearst Castle.

• 8:39Speaker 03

  So, he was sort of the Jeff Bezos of his day. And in World War II, copper was so scarce, we had to mine zinc to make our pennies. And today, as you just said, a copper penny's worth about four or five cents. And that's a good sort of indication of where we're headed.

• 8:58Tracy Alloway?

  So, there was a mine. What happened from there?

• 9:01Joe Weisenthal?

  Yeah, yeah, yeah. Keep going, keep going.

• 9:03Tracy Alloway?

  Yeah.

• 9:04Joe Weisenthal?

  Well, you know, if you want to just spend an hour telling Steve Jobs mining stories, I'm very happy to just talk about it.

• 9:09Tracy Alloway?

  I just want to hear mining stories.

• 9:10Joe Weisenthal?

  Yeah, yeah, yeah.

• 9:11Speaker 03

  Yeah. Well, we could spend days on Steve Jobs stories, but, you know, one thing leads to another. And I spent years in India studying yoga and meditation, and never dreamed, in my wildest dreams, that by my age, I would learn everything there is to know, but almost nothing, which is how to find mines and how to develop them in countries around the world. And we've done that probably more than anybody, and we've found more critical copper mines and other types of mines than any other group in the world. So, we've developed sort of a love-hate relationship with mining. We've tasted failure, and we've tasted success.

• 9:52Speaker 03

  And success tastes a lot better. And now, I've been spending more time with our government, both the Biden administration and the Trump administration, as the walls start squeezing in on us. If you think about Indiana Jones and the Temple of Doom, and the walls are coming in to squeeze you, and there's this giant ball coming down a ramp to crush you, and you have to dive underneath a trapdoor that's coming down, we are really looking at the weaponization of certain critical raw materials in the supply chain. And it's really a profound national security interest, and it comes at the same time that a lot

• 10:34Speaker 03

  of humanity is still worried about anthropomorphic global warming. I know it's not as fashionable during the Trump administration to worry about how hot it is out there, but actually, last year was the hottest year in 132 years since temperatures were recorded. And the metals we need to do something about that are the same metals that are needed for drone warfare, or the defense from drone warfare. And so, we're seeing a sort of perfect storm in a balkanized world economy, where demand for certain critical metals is going to infinity.

• 11:24Joe Weisenthal?

  You know, I used to be a hippie, too. I was, um-

• 11:26Tracy Alloway?

  Used to be?

• 11:28Joe Weisenthal?

  Well, you know, like, I was raised by vegetarian parents who used to meditate. And then when I was in college, I lived in a vegan co-op and stuff like that. But now I work in a big office building in New York City. And occasionally I even have to put on a suit and tie. And I like think about like, oh, what is my 20, what would my 22 year old self have thought? Whatever. Do you have those thoughts? Do you ever like, think about where you are today? And then the 20 year old, the 25 year old version of you and like, think, is this continuity? Would that person have been happy with me the way it was? Cause I think about these things.

• 12:05Speaker 03

  Well, um, I'll deny the use of the word hippie. We'll say it was a plain living and high thinking.

• 12:12Joe Weisenthal?

  Okay.

• 12:14Speaker 03

  We went through the psychedelic era before I was 20 years of age in the late 1960s. And it was sort of tune on, tune in, drop out, and then crawl back. And then we got into yoga and meditation, went to India and did all that stuff for years. And then fell into sort of the reality distortion field of trying to dream up a business and make a difference. And now I've passed the age of 76. I'm sort of worried about our country's national security. I'm worried about the United States versus China. I think a lot of people are selling the idea that the Chinese people are the mortal enemy of the Americans. That's not true. It's not true.

• 12:59Speaker 03

  But our systems are in conflict and the world is balkanized into opposing groups. And we're going away from crude oil being critical. We have plenty of crude oil in the United States, although we don't have much refining capacity. The crack spreads on diesel are at an all time high.

• 13:17Joe Weisenthal?

  Yeah.

• 13:17Speaker 03

  But these high diesel prices and the crisis around the Strait of Hormuz are going to lead to some really crazy implicit consequences. And we sit in the middle of that storm in the mining industry, and particularly in copper. And that's something I'm very happy to talk to your people about.

• 13:36Tracy Alloway?

  Yeah, so I'm, I'm tempted to ask more about your psychedelics era, but I won't. I'll stick to the topic, copper. So we seem to have some consensus that demand for copper is going up. There's this need to electrify. There's the data center story. There's all of that. There's also the national security interest angle, which you just described. And yet, production has lagged. We don't see a lot of new mines started. And I'm just wondering, with copper at 15,000 or almost $15,000 a ton, what does the industry need to see in order to be confident in boosting production?

• 14:14Speaker 03

  Let's start with the fact that if we go back to Mahindra Darrow, our species has mined 700 million metric tons of copper. It sounds like a lot. And you could recycle it and get it back. All you have to do is tear down everything in the United States and make it look like the days of the woolly mammoths. And we get back about 300 million tons. And in Europe, we get 200 million tons, in Asia and other 200 million tons. But unfortunately, we don't want to go back to freezing in the dark. And at the rate of current global economic growth with 8 billion people on this planet,

• 14:53Speaker 03

  to maintain 3% GDP growth, absent the electrification of the world economy, absent electric cars, and let's not even get started on data centers. We need to mine that same amount of copper that we mined in the last 10,000 years in the next 18 years. And those of us that are in the industry don't see that as being possible because, as you know, there's the old adage, what is 50,000 lawyers at the bottom of the sea? And the answer is a good start. Nobody has built anything near anybody in the United States as we have deindustrialized our country. We haven't built a copper smelter, our nuclear power plants in this country, nor high speed trains.

• 15:36Speaker 03

  I think we've been trying to build high speed trains between Los Angeles and San Francisco for 30 years. But the Chinese can build everything. They can build oil refineries, nuclear power plants, and high speed rail. But we outsourced all that. And in the last decade, when you went to Walmart, everything you saw said made in China. In fact, one of the best restaurants in Beijing, in the Grand Hyatt Hotel, took that as a label. It was called made in China. It was a great Chinese restaurant. But now we're waking up to the fact that we've deindustrialized our country. And we need copper metal, if you believe in greening the world economy.

• 16:16Speaker 03

  If you want electric cars, air conditioners, microwave ovens, we need copper metal. It's very copper intensive. We also need copper in sophisticated armaments and, in those kinds of missiles like Patriots that are interceptors against weaponry that are suddenly being used against civilians in conflict that we haven't seen since World War II. And this is a time that most of the great copper mines in Latin America are little old ladies laying in bed, waiting to die. And this is something I need to explain to you guys.

• 16:50Joe Weisenthal?

  Please.

• 16:51Speaker 03

  So what, what started all this was originally the biggest producer of copper in the world was the Democratic Republic of the Congo. It used to belong to King Leopold of Belgium. He owned the people, the elephants, the ivory. And they mined copper there for centuries. But around the turn of the century, America dug the Panama Canal with big steam shovels. A lot of people died of malaria digging that canal. But when the canal was finished, there were these giant steam shovels that were left over. And the Guggenheim family, who were in the rag trade here in New York, bought those shovels for pennies on the dollar and took them down to Chile to use them to start digging

• 17:33Speaker 03

  for copper metal because we were getting into the first industrial revolution, 1910, 1920, President Polk. And they went to a place called Chuky Kamada in Chile. And the grade of the copper was 3%. They took those old steam shovels and their company was called Asarco, which was affectionately known as the American Smelting and Robbing Company. And the Guggenheim family made so much money, they left the Solomon R. Guggenheim Museum of Modern Art here in New York on Fifth Avenue, designed by Frank Lloyd Wright. Now, there were two other great American mining companies that rose out of our industrial renaissance. There was Anaconda and Kennicott.

• 18:14Speaker 03

  But all of them were nationalized by a leftist president in Chile named Allende. Allende took them away, took them for the Chilean state. And America responded by killing him. The United States CIA murdered Allende. And he was replaced by a right wing general named Pinochet. And Pinochet said, I need these copper mines. He didn't give them back to the United States. In fact, he kept them. They're, they're called Cadelco today. And he said, 10% of the copper produced will come off the top to finance the Chilean army. And that was sort of the beginning of the wave of nationalization of resources.

• 18:57Speaker 03

  You know, Aramco was originally found by an American oil company. And then Saudi Arabia took the oil back. And today, most of the oil in the world belongs to sovereign oil companies. And America was left without a great copper champion. And when I was younger, during, say, the Clinton era, we started embracing China. We, I was very early into China. I first went into China in the early 1980s. George Shultz introduced me to China. I was in fact, the first American to go mining in China, in Western China, in Xinjiang. And, you know, I watched the incredible rise of the Chinese people.

• 19:40Speaker 03

  No one has uplifted their economy that far, that fast in human history. And we thought by bringing China into the WTO, we were going to turn the Chinese into Americans. We thought all the girls wanted Manolo Blahnik shoes and Birkin bags. All the guys wanted Porsches. And they did an incredible job of uplifting their society. But things haven't worked out exactly as we thought between our respective societies. Now, most of the mining fell to junior mining companies listed in Australia or Canada for decades. These companies were registered in Canada, like ships are registered in Liberia.

• 20:25Speaker 03

  Legislation was friendlier up there for the risks with mining. Thousands of these little juniors would go around looking for mining. And the big mining companies became more and more brain dead. They became like giant donut shaped law firms with mediocre operating companies in the middle. For example, Exxon doesn't really drill for oil today. It's a big law firm. But they hire people like Schlumberger or Baker Hughes to do their work. And they just sort of move on. And if you look at the food chain, when I was young, I grew up in the 1950s. The United States government made a little pyramid, food pyramid for us, and it said, you're supposed to drink four glasses of cow's milk every day, and a certain amount

• 21:09Speaker 03

  of milk and cheese and eggs and ham. And at the top of that food pyramid was steak, meat. And when I was in school, you know, we were given that food pyramid. And when I was a kid, you know, I'm remembering this vividly, at the age of eight, they made us get under the desk to practice for nuclear war in the event of a nuclear bomb. And I was the kid that told my teacher, this is crazy. We're all gonna get vaporized if there's a nuclear war. It's always a rebel, always sort of getting in trouble. Now, nobody that I know of in California eats out of that food pyramid anymore. People go to Arowan, and you know, they're, they're, you know, maybe wheatgrass juice and sunlight and some

• 21:51Speaker 03

  Pilates, but there's nobody, nobody eating that stuff anymore. But I want you to know the Pentagon also had a food pyramid. And they got that all wrong. And what modern warfare requires is none of the stuff in that food pyramid. And so now, I get to get in Odd Lots and try to explain the magic of mining to you guys.

• 22:11Joe Weisenthal?

  Amazing, amazing. You know, just again, not to keep belaboring the point as hippies, but as someone who grew up with, in the presence of a lot of wheatgrass, once again, it feels like history comes back and I was well prepared for this moment. All right, let's talk about that pyramid then. You know, let's just say the politics suddenly changed such that, like, you didn't need a lot of lawyers, such that people didn't complain if they lived in the presence of a mine or so. I don't know, miraculous things that could never happen. Why don't you just talk about, I guess, the math and the engineering in terms of like, the deficit that you foresee between demand, supply, and what it would take, I

• 22:52Joe Weisenthal?

  guess, from an engineering standpoint, or a money standpoint, to build out the supply that we need for whatever are the key rungs of that pyramid?

• 23:02Speaker 03

  That's a brilliant question, and opens up an amazing can of worms for your audience. So the largest copper mine in the world is La Escondida. It's in Chile. And we need to look at that clinically, to try to understand the existential dilemma we face. When it was first found, a generation ago, the grade was close to 2% copper. They've been digging deeper, deeper, deeper. And today, it's 0.8 of 1%. It belongs to Rio Tinto and BHP, the largest mining companies in the world, in the Western world. But within two years, the grade is going to drop to 0.4 of 1%. So the grade is going down.

• 23:45Speaker 03

  And as that grade declines, the rock deeper in the pit is getting harder and harder to crush and grind. And you need to take rock and reduce it to talcum powder to get the metal out. The way we get the metal out of rock is we make talcum powder out of it. And about 4% to 5% of all the energy produced on planet Earth is utilized in the crushing and grinding of rock, which is a huge number when we're worried about the generation of global warming gas. Now, that mine sits at 12,000 feet elevation in the Andes, and it hasn't rained in the Atacama Desert in 30,000 years. And you need two cubic meters

• 24:29Speaker 03

  of water to crush one cubic meter of rock. So as the grade of that rock is declining in copper, you need, you need to crush and grind more and more rock to get less and less metal. And since you're generating the electricity in Chile by burning primarily coal, they have some solar, but the sun only shines six hours a day. You need 24-hour day power in the mining industry. The global warming gas generated by crushing and grinding that copper is going up and up and up. And to further confuse you, they built a $4 billion desalinization plant at sea level. They take sea, ocean water, get the salt out of it.

• 25:12Speaker 03

  That's using a million dollars a day of electricity, because you have to pump that water from sea level up to 12,000 feet, and the water consumption is going up, the energy to generate and pump that clean water uphill is going up, and the metallurgical recovery is going down. And, and so it's, they're modeling 10, 12 billion of investment just to make that mine go down in production. And that is what's happened to our industry. Our, our global production of copper this year is down, even though prices are up. And that's amazing, because I just told you, we need to mine as much copper in the next

• 25:51Speaker 03

  18 years as we did in the last 10,000 years, just to maintain global 3% GDP growth without the electrification of the world economy. Now, when you look at data centers, it really gets, if you want to use our earlier term, psychedelic. Because the hyperscalers have incredible market capitalizations, and they had a beautiful viral technology. And in fact, in the last 30 years, all the capital on Wall Street went into sexy technology like the internet and broadband and Netflix and wireless. And all the kids went into that, and the Bloomberg Studios were built. But when all the money goes in that direction,

• 26:35Speaker 03

  we didn't put money into basic raw materials, which are the, which are the foundation on which everything sits. In fact, we stopped mining things in the United States. And we, we sort of pushed this all to China. We said, well, let's let the Chinese build everything at Walmart. You go to Walmart, everything said made in China. So all the pollution was over there in China. And we thought, this is a good deal. We can be a consumer society. We'll drink our lattes here and complain about global warming and just let the Chinese do all the work. And this model is no longer viable. And now we're waking up and finding that there really is a critical raw material supply chain. In the Biden

• 27:18Speaker 03

  administration, when I used to work with Amos Hochstein, who was in charge of the energy transition, and was all about global warming. And you remember that world, as we came out of COVID, we, we saw that it was getting hotter and hotter. And we started thinking, for solar power, you need copper. For wind, you need copper. The way we generate electrical energy, the way we transmit it, this studio is ludicrously copper intensive and energy intensive. And there is nothing, and I mean nothing, about the internet that is inherently green. Let me give you an example. When you do a Google search, and all of us are guilty of having done a Google search, you push that key, you're using the

• 28:00Speaker 03

  amount of electrical energy that it takes to run a 100-watt light bulb for about 12 seconds, which doesn't sound like a lot, but there are hundreds of billions of Google searches. And that electricity is not free. You think it's free when you do that Google search, but it's paid for by advertising. Now, when you do an AI search, and I use ChatGPT-4, and, you know, we're using Claude, and do an AI search, you're using 30 times more electrical energy. You're using the power it takes to run a 100-watt bulb for two minutes or three minutes. And every single kid in the world, a five-year-old with an iPad, is going to be using AI searches. And so the electrical demand for AI literally

• 28:45Speaker 03

  goes to infinity. Now, here's our problem. Here is our dilemma. AI is at its roots a military technology, and I want to explain why. Do you want to hear this?

• 28:57Joe Weisenthal?

  Please.

• 28:58Speaker 03

  So we have a genius, a polymath named Elon Musk. You know, his brain is beyond most people's comprehension. It reminds me a lot of Steven Jobs. But he's developed a series of low Earth orbiting satellites, where the latency, when we send a signal up to outer space, is 27 millionths of a second, going up and coming down. Now, if I'm sending a drone to kill you, Joe, it knows what you look like, even though you've grown your beard a little longer, it can identify you.

• 29:34Tracy Alloway?

  To hide from drones.

• 29:35Speaker 03

  You know, a little micro drone, they could be a mother drone, it releases baby drones, and this drone is looking for you. And going back to the hippie era, all it has to do is attach itself to your third eye. Boom, and you're gone. Now, this is a military technology. Drone technology is so efficacious that the, the Leopard tanks and the Abrams tanks we were giving to Ukraine are parked and no longer used, because a $12 drone can find them from the heat signature, from the tailpipe, and just kill them. So drone warfare depends on AI, because there's an AI identification of the target, up it

• 30:16Speaker 03

  goes to, to the satellite, it comes back down, wipes out the target. And if my satellite system has a millionth of a second less latency than yours, you die, I don't. So AI first goes to military application. And later on, it goes to a beautiful sexy doll to make love with. They're selling those beautiful robots right now in China. And those humanoid robots also will utilize astronomical amounts of these same critical raw materials. And maybe those robots will be a Terminator, or maybe they'll make a great lover, you know, very sympathetic, chatting to you. But all of these technologies

• 30:57Speaker 03

  are insanely consumptive of electrical energy. Your AI girlfriend is actually created by servers. And, and a server in a server farm uses 20 critical metals that are the new oil. And you don't even know that you need, you need niobium and tantalum and palladium and rhodium and rhenium. Or, for example, if, if you're Jensen Huang, and you've got Navidia, you need gallium nitride. Or if you want to improve memory and chips, you need scandium nitride. And so instead of the food pyramid that the Army, Navy, and

• 31:38Speaker 03

  Air Force relied on, in those days, there was stuff like coal and oil. And yeah, they had a little bit of copper in the old food pyramid. Today, it's what we call critical raw materials.

• 31:51Tracy Alloway?

  AI girlfriends and boyfriends, please.

• 31:54Speaker 03

  Yes.

• 31:54Tracy Alloway?

  Let's be equal opportunity for parasocial relationships.

• 31:57Speaker 03

  We agree. If you want an Arnold Schwarzenegger style male robot, they're coming and they're opening soon at a theater near you. And the actuators, the electrical motors, these things are going to go and plug themselves into the grid to recharge are incredibly dependent on AI and this whole unbelievable machine we're building that requires the metals that I'm talking to you about right now.

• 32:26Joe Weisenthal?

  I didn't expect this conversation to be the moment where I sort of reveal one of my takes, but while we're here.

• 32:32Tracy Alloway?

  Oh, God. It's not on sex robots, is it?

• 32:34Joe Weisenthal?

  It's not on sex robots per se, but kind of in the sense that I think that like the boomer generation had to sort of get comfortable with the fact that their children might be gay. The millennial, the Gen X generation had to get comfortable that their children might have trans partners. And the millennial generation is going to be the one that has to get comfortable when someone brings back their AI robot or girlfriend and they're going to get mad at their parents when they don't respect it. Anyway, keep going.

• 33:04Tracy Alloway?

  Thank you for that image, Joe. Back to copper. Does technology solve any of the mining constraints that we've had? Because there must have been technological developments in the industry over the course of your career. And of course, we all know about the shale revolution and what happened there. Do you see tech advancing in such a way that maybe production does increase?

• 33:28Speaker 03

  Well, now that we've unleashed AI, and I hope as a card carrying humanoid, that we can control it.

• 33:36Joe Weisenthal?

  You're a human, right?

• 33:39Speaker 03

  That's an open question. I want to tell you, I'm not a robot. I'm a grandfather. You're asking some very, very important questions. We cannot, as an industry, find and responsibly mine the copper that we need for an energy transition with yesterday's technology. It's just impossible. We can't mine more copper in the next 18 years with yesterday's technology without generating the same global warming gas that we were worried about in the first place. Because the energy requirement, I'm just talking about diesel, the diesel price is skyrocketing. Let's, let's talk about that.

• 34:21Joe Weisenthal?

  Yeah.

• 34:22Speaker 03

  The Strait of Oromuz remains closed largely today. Global hydrocarbon coming to the market is down at least 10% and the tertiary implications are terrifying. Sulfuric acid, about 25% of the copper that we recover in the world requires sulfuric acid to leach it. And it comes out of the Middle East from natural gas in places like Qatar. So without that sulfuric acid, we've seen prices in the last eight months go from $150 a ton to well over $1,000 a ton for sulfuric acid. It's also used to make fertilizer or food or to make semiconductors. It's sulfuric acid is the king of chemicals.

• 35:05Speaker 03

  But it's a funny byproduct of the closure of the strait that the price of sulfuric acid is skyrocketing. And in the Congo, we heap leach copper, about 25% of the production needs that very same sulfuric acid. Now, I'm fortunate in that our company built the largest copper smelter on the African continent. It's the most modern copper smelter built in the world and we produce sulfuric acid as a byproduct of our copper mines. And we sell that sulfuric acid to our brother copper miners in the Congo at higher and higher prices. But there is a worldwide shortage of sulfuric acid. Russia and China have now banned the export of sulfuric acid.

• 35:47Speaker 03

  And if we don't have more of it, food prices are going to rise globally. And we are seeing incipient inflation arising through the supply chain as our beautiful, integrated, just in time world economy breaks down into a just in case economy. And now, what do I mean by just in case? So every country in the world is looking to their own supply chain. Japan is building up its military. North and South Korea are building up their respective militaries. They don't like each other. Taiwan is trying to turn into a big porcupine. And in fact, if Taiwan goes to Chinese control, TSMC, their semiconductor company, and AML,

• 36:32Speaker 03

  who make the lithograph machines to make semiconductors are rigged to be exploded in the event of falling into Chinese hands. China has a massive military buildup. India and Pakistan fought a war a little over a year ago. Could have gone nuclear. They're both increasing their military budgets. Europe is waking up and going to a 3% GDP military budget, worried about Russian drones and unconventional warfare. And you know, the Trump administration is proposing a $1.5 trillion budget next year, up 50% for defense. And all of these modern systems are copper intensive.

• 37:13Speaker 03

  And what happens as these countries start to look at copper as a proxy on money? Let's just explain that in the last year or two, we've seen the dollar price of copper go from $4 to $6 or $7. But if you live in Japan, it was only 50, 60, 70 yen of the dollar. As it went to 160 yen of the dollar, it just took so much more yen to buy copper. It looks twice as expensive in Japan. And in fact, Scott Besndt, our Treasury Secretary, is trying to prevent the yen from melting down. It's so good for the carry trade, for all your hedge fund listeners.

• 37:54Speaker 03

  But if the yen collapses, Mrs. Wantanabi might not buy our treasuries. And then rates go even higher. And that wouldn't be good for the midterm elections and the 2028 elections. So we've come to a point where push has come to shove and we just haven't had enough capital or technology in the mining industry. So we're getting back to your question. Can we use Yankee ingenuity and innovate our way out of the fact that the walls are crushing in on us? That, you know, Indiana Jones and the Temple of Doom.

• 38:29Tracy Alloway?

  You definitely have a way with metaphors. Can I just say that?

• 38:33Speaker 03

  Well, no, we're, you know, those of us in the mining industry scratch our heads and wonder, don't these people on Wall Street understand how hard it is to build a mine? The Resolution Copper Project in Arizona has been trying to get a permit for 35 years. So the banana principle is build absolutely nothing anywhere near anybody. And, you know, you know, we just, you know, the old adage was, what's 50,000 lawyers at the bottom of the sea? And the answer was a good start. How does Japan work with only 2,000 lawyers? We have millions. So, so we need to reperceive copper as a good. And in the Biden administration, we finally got copper added to one of the lists as a critical raw material.

• 39:17Speaker 03

  But the Democratic Party under the Biden administration couldn't bring themselves to putting a good housekeeping seal of approval on a mine. They were sort of warming up to the idea that we need mining. Otherwise, you have to burn coal or oil. And they were moving in the right direction. I worked with Amos. He was in charge of the energy transition and they were recognizing that solar is good, wind is good, but, you know, the wind doesn't blow all the time, the sun doesn't shine all the time, you need grid scale batteries. My obsession is with geothermal power. And my obsession is with a cleaner and greener way to liberate these metals. And the good news is that there is disruptive technology available that we are working on.

• 40:02Speaker 03

  We've had the support of a lot of major tech investors and a number of governments, Japanese, French and the United States government. We do think it is with great difficulty possible to innovate our way out of this mess. But it's going to be very tough and it's going to be a very closely fought thing.

• 40:38Joe Weisenthal?

  You know, I recognize that you're, you know, when we talk about your actual operational footprint, you're talking about Africa. We've also talked about South America. In this world now where everybody is trying to, we call it Balkanization or resource nationalism or so forth. Earlier this week, I know that's not where you like have, where you're digging stuff out of the ground, but where you have kind of a base in Canada, there was the news of the government investing 405 million on a new highway project, build out the transportation infrastructure in parts of the country, a country that is endowed with quite a bit of important materials. Do you think like there is a big opportunity there if there, you know, the current government

• 41:23Joe Weisenthal?

  actually seems quite serious about resource investment in a way that perhaps prior liberal governments in Canada hadn't been. Are you optimistic or do you see a prospect for there is a lot there if we invest in the infrastructure to drive out and get it?

• 41:40Speaker 03

  So I need you to understand that we are in the low foothills, not the Rocky Mountains. We're in the low foothills of the Himalayas and the metal demand we face if we want to green the world economy, because the Bloomberg organization has a, you know, a lot of, a lot of good work done on, on global ecological issues. And yet we face the incipient and viral war that has broken out in Ukraine, in the Middle East, Iran, Hormuz, and we have Balkanized ourselves into two giant opposing groups.

• 42:22Speaker 03

  We have Russia, China, North Korea, and Iran closely cooperating. Iran now has hypersonic missiles, which by the way, we don't have yet, that are steerable, that are incredibly amazing that Iran can target missiles so precisely with technology that must have come from Russia or China. And we have a countervailing pressure. And if you look at our president, he told Mr. Zelensky in Ukraine, I will help you if you give me critical raw materials. It's become very mercantile. You never saw an American president say, I will help you only if we have critical raw materials. If you'll give me five minutes, I want to talk to you about World War II and the current

• 43:07Speaker 03

  situation.

• 43:08Joe Weisenthal?

  Tracy and I are both middle-aged dads who love World War II.

• 43:12Tracy Alloway?

  Most of your listeners are too young, so I

• 43:16Speaker 03

  really need to explain this to you by analogy. The Japanese thought it was a good idea, for some reason, to bomb Pearl Harbor. They had, they had an idea in their mind and they did it. And Franklin D. Roosevelt, who was a Democrat, was president of the United States, and he was an isolationist. He did not want to get involved in World War II, but in England, you had Chamberlain and you had, you had Churchill. And Churchill was obsessed with the Nazis and he came to Franklin D. Roosevelt begging for help. And ultimately in 1940, 41, Churchill grudgingly said, I got, got a message from Roosevelt, I will lend you and I will lease you what you need for the war effort.

• 43:59Speaker 03

  I won't give you anything for free, but I'll lend you coal, I'll lend you oil, I'll lend you copper, I'll lend you tin, I'll send it over on my merchant shipping with American boys, and later on you pay me back with interest. Because he was an isolationist, he didn't want to get in the war. The Germans invented these incredible little U-boats, little needle submarines, and they started sinking our merchant shipping, interrupting the supply chain between the United States and Great Britain during the war. Fortunately, a group of mathematicians in England broke the Enigma code. And had that not happened, everybody in England today would be speaking German.

• 44:42Speaker 03

  It was a very closely fought thing. The Germans were working on heavy water reactors and nuclear weapons. Ultimately, we dropped an atomic bomb on Hiroshima. It was a uranium bomb. And then our second bomb we dropped was a plutonium bomb. It was a science experiment. Truman authorized a second bomb to be dropped and America came out on top of the world. Now, today, the supply chain is being interrupted and none of those commodities that we needed in World War II are relevant. Without gallium, there is no Nvidia, no Nvidia chips. Without scandium, rhenium, dysprosium, niobium, tantalum, these are metals you don't even know about.

• 45:26Speaker 03

  We can't build this studio. We can't develop AI as fast as the Chinese. And our hyperscalers are getting in debt. They're borrowing money to pour concrete and steel. Their heads are in the clouds, but their feet are of clay. They're sitting on the earth and there's a shortage of electrical capacity in our country to run these data centers. In fact, there's a backlash against data centers in the US because voters are seeing the price of electricity go up. And so this is a very strange, weird thing unfolding here, that China has more than twice the electrical energy it needs to run its society and we don't. You know, there was a power failure here in New York.

• 46:10Speaker 03

  I think it was the 1970s or 1980s. Our power here in New York comes from hydropower in Quebec. It comes down from hydroelectric dams that you could never build today. A bunch of hippies would lay in front of the bulldozers to prevent those lakes from being developed. But, you know, when the power went out here in New York, a lot of babies got made. Nine months later, there's a big bump of babies because that was, there was nothing else to do. It was dark out and people stayed at home, you know, they were worried about looting. But today, if you want everything Elon's doing, if you want Croc, if you want AI, you want humanoid robots, you want electric cars, you want microwave ovens and washing

• 46:51Speaker 03

  machines, you want to clean the environment and you want to defend yourself against drones coming to get you, you need ultra sophisticated critical metals. And unfortunately, all of them are developed by China. They're not found here in the United States and the Chinese are very rationalized and very, you know, in an intelligent way are saying, we're not going to sell them to you unless we agree. In fact, if you're a US manufacturer, you now have to give your plans to the China Military Commission and say, why I want one of these metals. And then they study it, they look at your blueprints and they can refuse the supply of those metals for any reason or no reason.

• 47:34Speaker 03

  Now, we're ahead as a society on chips and they're ahead on critical raw materials. And maybe there's some big trade to be made here when Scott Bessent negotiates, and in fact, President Xi Jinping is, is due in the United States, September 24th. And this could go two ways. We could play the game with each other like on a level playing field with a game of rules like rugby, where I break your collarbone and you break mine, but we don't kill each other. Or this could spin out of control because Chinese AI is coming, it's as good as ours. It's 99% as good as ours and they're going open source.

• 48:16Speaker 03

  They're going to give it to American enterprise for free, while the hyperscalers are betting the farm on astronomically large capital investments, but they can't find the electricity in the United States and the critical raw materials to develop these things. And that's why I told Bloomberg recently, as a miner, I'm being approached by unconventional interests out of Silicon Valley. And we're talking to the big hyperscalers, just saying, my God, we got a problem now.

• 48:43Tracy Alloway?

  What exactly do they want to do here? Are they talking about like investing equity or owning some sort of facility?

• 48:50Speaker 03

  Well, you know, nobody that's in technology wants to get their hands dirty mining because, you know, a Tillingstam can collapse, there could be an environmental issue in mining. And we like to think that technology exists in a parallel universe where we never get our hands dirty, but it's the technology that's drawing all this electricity that is generating global warming gas. In other words, it would be neat if Microsoft could run all of their power off of nuclear power plants. In fact, they went after Three Mile Island to reopen it to provide the electricity for these data centers. But actually, currently, they're going to natural gas. And you know, that's not really that green.

• 49:32Speaker 03

  And there's a seven year wait to get a gas turbine to power a natural gas power plant. Ergo, Bloom Energy, their stock has gone up because they have solid oxide fuel cells as an alternative to to generate electrical energy for a data center. A data center needs uninterruptible power. It can't work on solar because the sun doesn't shine all the time. Can't work on wind, the wind doesn't blow all the time. And so to build a solid oxide fuel cell, you need scandium metal. Can't build it without it. Or to build a natural gas turbine, you need rhenium metal in the core of the turbine. And so we're really bumping up against critical materials to enable this kind of thing

• 50:16Speaker 03

  that we're doing today to exist at scale. And the problem for us is that the response to this question has to be at the scale of the American economy. If we're a little country like Honduras, we wouldn't need very much. But we're big. And in order to keep growing and going to AI, suddenly, the miners become the key. And we can't go on mining the way we used to mine, or we're going to destroy this planet. We're gonna, instead of mining oil and gas and coal, we're going to rip up every mountainside on the planet, trying to find enough copper to have an energy transition. And so we are dependent on becoming technologically savvy and a technological revolution.

• 51:01Speaker 03

  It's not going to be easy, but I'm working on it and a lot of people I know are.

• 51:06Joe Weisenthal?

  Just real quickly, you know, you mentioned the long wait for natural gas turbines right now. For you placing orders for equipment, just the standard run of the mill equipment, things that dig stuff out of the ground, are there like constraints these days, the likes you wouldn't have faced 10 years ago to buy the same thing?

• 51:26Speaker 03

  It's beyond, it's so bad that it's beyond your Wallace imagination. When I, when we built the, you know, we went up to Mongolia in the Gobi Desert, and we discovered the Oyatogoye Copper and Gold Mine, which today is ranking about number four in the world in copper and has the world's second or third largest gold resource. And we're in the Gobi Desert, and we invested about $7 billion, starting to discover this thing, to start to build it. But we didn't have the water. We didn't have enough water around the mine. So we had to go out looking for water. And if we couldn't find the water, we would have had a $7 billion modern art sculpture out there in the middle of the Gobi Desert. Today, about 20 billion of capital has gone into that mine.

• 52:09Speaker 03

  Rio Tinto bought the company, and it's in production. And it runs on imported electricity from China, on a $100 million extension cord. And the Chinese can just unplug it. But they sell all of that copper into the Chinese economy. So it's in China's interest to allow that mine to operate. So, you know, this is an example of going somewhere to find something that's very energy intensive. Now, repeat your question.

• 52:38Joe Weisenthal?

  No, I didn't mean you want to buy, buy a big shovel, a big like, like, what's the backlog for that?

• 52:45Speaker 03

  I want to tell you about that mine. So when we were building that mine, I built the phase one mine, we had the world's largest electrical motors. They're like giant washing machines. And there's rocks and steel balls, and you tumble the rocks, and slowly, the rocks bash against each other with these steel balls. And with a huge amount of electrical energy, you grind it down to talcum powder to liberate the copper. And the, the, the ring gear around those giant motors, these motors are 40 feet in diameter approximately, it was a four and a half year wait to get the ring gear. In other words, you order the motor, four and a half years later, Siemens or ABB could build it. Today, it'd be an eight or 10 year wait, if ever, you know? And, and the hyperscalers are trying to get a gas turbine today.

• 53:29Speaker 03

  They're really, because we have a lot of natural gas in the United States. And you're generating global warming gas for your AI, but it's about a six or seven or eight year wait. And today, when you read the fine print in those supply contracts, they say, well, there's a force majeure clause. If we can't get one of the metals, we just won't deliver it. Now, I'll give you an example. We had a temporary problem at one of our copper mines in the Congo. We had a flood due to a seismic event, and we needed to pump the water out of the mine. And, and you know, the mine's about the depth of the, the height of the Eiffel Tower, or a little, maybe two Eiffel Towers deep.

• 54:10Speaker 03

  And the pumps we needed pump 1,000 liter, 1,300 liters per second, three times the height of the Eiffel Tower. So these are very sophisticated pumps. And we called the Americans, they said, sorry, we can't build them. We called the Germans, no deal. We called all over the planet. We said, why not? And they said, we can't get the samarium cobalt magnets for the electric motors. Because these pumps are like a rocket ship. They're almost three meters in diameter. They're, they're eight or 10, they're 80, 90 feet long. We lowered them down these shafts. Only the Chinese could build those pumps. Fortunately, the Chinese were buying our copper. And so they built the pumps in 30 days, and we got the mine pumped out.

• 54:55Speaker 03

  When, when we were flooded, we're losing about $15 million a day in revenue. So it wasn't a money question, it was just, who's going to sell us a pump?

• 55:03Tracy Alloway?

  Yeah.

• 55:04Speaker 03

  So, you know, there's a great song by Bob Dylan, you know, you're, you're both too young to remember it. It was the first real rap song. It was called Subterranean Homesick Blues. And you should play it because it's, it's early rap. But there's two great lines in that song from Robert Zimmerman, AKA Bob Dylan. One was, you, you don't need a weatherman to know the way the wind is blowing. And the final line in the song, it ends with, the pump won't work because the vandals took the handle. And what's happening now is that it's recognized that by withdrawing certain critical raw

• 55:46Speaker 03

  materials, you can, you can bring our economy to a halt. If you look at a Boeing 747 on the runway, it's got four million parts. But if one part is missing, it doesn't take off. And so as our systems get more complex, we're in a position to blackmail each other. And right now, we could tell China, I'll give you an example. I was talking to our Treasury Secretary, he's an amazing person, Scott Bessett. And I was asking about our discussion with the Chinese. And he said, I sat down with the Chinese, and they said, you bastards haven't delivered the Boeing, the, the General Electric engines for our Boeing airplanes you promised us.

• 56:29Speaker 03

  And he said, well, you haven't given us the critical metals, we need to build those engines. And so we're starting to point a gun at each other's temple. And there's this giant chess game going on. And we used to get this over crude oil. And now it's moving towards a suite of critical metals that you don't talk about enough on ad lats.

• 56:50Tracy Alloway?

  Well, we're fixing that now.

• 56:53Joe Weisenthal?

  We're taking that.

• 56:54Tracy Alloway?

  So, related to this, one of the reasons that copper is falling this morning, and we're recording this on September 10th, but there's a report out saying that the White House hasn't made a decision yet on refined copper tariffs. Do tariffs help boost production in the US if the constraint is, you know, geological and legal and bureaucracy?

• 57:16Speaker 03

  So Ernie called me from Reuters yesterday, and I told him I didn't want to comment on it because I've been wearing out my shoe leather going into the Biden administration and Trump administration. But I could argue both sides of the proposition for you without telling you where I stand personally.

• 57:33Joe Weisenthal?

  Smart.

• 57:34Speaker 03

  You know, you know, in the old days, tariffs was the principal way that governments collected revenue in the, in the British Empire, when the sun never set on the British Empire, and we had ships. The, the, the British Crown authorized piracy. You know, you're a privateer, you go out and kill somebody, and as long as 12 and a half percent went to the Crown, or they had tariffs. And we didn't invent income taxes until the 1930s or so. And the problem is that if I go to the Congo, the grade of the copper there is three, four, five, six percent. It's unbelievably rich. And there's 100 million people in the Congo.

• 58:18Speaker 03

  The median age, do you know what the median age of a person is in the Congo? 18.7. So it's a very young population, Generation Z. And they don't remember the days of the Civil War, they want to work. And I can get a brilliant software engineer that's Congolese, who knows AI, or who can run automated equipment for $800 or a thousand bucks a month. If I want to mine copper in the United States, the United Steelworkers of America want over $100 an hour to go underground. And we have environmental legislation and legal constraints that make it much more expensive to mine in the United States. But, but this is a paradigm, if you want to build a nuclear power plant in the United

• 59:01Speaker 03

  States, or you want to put it in a data center in the United States, it takes big, big money. So, so mining tended to go around the world where the resources are higher grade or lower cost. But what happened was.

• 59:16Speaker 03

  The financial system invented the net present value model. It was originally made for oil and gas. The mining companies started NPV models. All the mining companies were valued on NPV, and it's a stupid idea because mines cannot be modeled to NPV. Oil fields can, but not mines. Oil fields decline very fast. If you don't put money into them, they just, the, the energy in the reservoir depletes. But a mine with a hundred years of reserves doesn't deplete like an oil field. So the NPV model suppressed the valuation of mining companies. In fact, today, mining companies in the aggregate only, only have the value of less than 1% of the S and P 500, which is an all time low for mining.

• 59:59Speaker 03

  Now, the Chinese saw this and they said, my God, we got 1.3 billion people to feed forever. These stupid Americans are willing to sell all this. And they just came in over the top and they intelligently just bought the entire supply chain. They bought everything that wasn't bolted down. And so, you know, the problem is that the China, the Chinese did something very intelligent for the Chinese people. And today, we don't own these assets anymore because all of our money went into Netflix. Or my, you know, and, you know, this really has to be, somebody has to tell the truth about all this because basically we got caught with our pants down. Now, can I tell you about my interviews with American billionaires?

• 1:00:44Speaker 03

  So, you know, every time Bloomberg writes about me, they say billionaire Robert Friedland. I kind of get tired of that phrase. I've now interviewed 50 male and female billionaires. And I've asked them, do you kind of sit down and put your pants on one leg at a time? Or do you hold your pants up in front of you and jump in with both legs simultaneously? And I haven't found one billionaire who claims that he or she jumps into their pants, both legs at a time. And so this whole thing is overrated. It's just paper money. What I'm worried about is my grand, my grandkids, you know? I'm worried about the sustainability.

• 1:01:28Speaker 03

  How do we provide food and water and clean air to 8 billion inhabitants without warring groups? We used to fight over crude oil. Most of the wars of the last century was over crude oil. And now we might start fighting related to AI and the critical raw materials to support that AI. And that's why I think this should be a series. This should be like Breaking Bad, not a one off movie where we peel this onion and go deeper into the core of this issue. And, you know, I know, I know a lot of your guests have been starting to talk about this. But this is a subject that is not going to go away for the next 10 or 20 years. This is like a permanent subject.

• 1:02:11Speaker 03

  For example, I remember the 1987 crash. Rates were 12% and the stock market crashed and Volcker cut rates and the bond market went up for 35 years. Right now, this is not an ephemeral, short term thing. That article that came out on Reuters today that spooked the copper market a little bit is talking about tariffs. You ask me what I think about tariffs? Well, if you want to mine in the United States, if you want to be self sufficient, tariffs are a great idea. Because if copper is six bucks, you put on a 30% tariff, 30% of six bucks is a dollar 80. You'd have $7.80 copper.

• 1:02:51Speaker 03

  I could afford to hire a mine worker at the United States Workers of America and mine in the United States. It would make it more viable to do that here. However, the other side of the equation is it'll create domestic inflation. Rates will otherwise go up. We have the midterm elections coming. So there's a political issue. Do you want to re-industrialize America? Or do you not want to re-industrialize America? If you can't build a nuclear power plant, if you can't build a ship, you lose your sovereignty. Last year, America built about eight ships and China built a thousand. And so this is a very big question.

• 1:03:35Speaker 03

  And do you really want to replace the entire system of crude oil? And replace it with huge data centers run by clean energy or don't you? And, and, you know, I want to tell you, this country is well endowed by the creator in all manner of good things. We have water. We have amber waves of grain. 10% of the copper ever mined in the world came from the great state of Arizona. The California license plate used to say the golden state because we discovered gold in California. And the Arizona license plate said the copper state. And people were proud of it, you know? And, you know, listen to Bruce Springsteen. I mean, we used to do stuff in this country, you know?

• 1:04:19Speaker 03

  We used to have blast furnaces and steel mills. And we lost all that because we thought we could outsource all this to China. And everything at Walmarts had made in China, whether it's a microwave oven or a washing machine. And this is part of the big debate is if you want to re-industrialize America, let's do it in a better way. Let's try to figure out a more sustainable way to do it. But if we don't do it, we have lost our sovereignty. And I think that you're discovering this in Europe. And this is being discovered globally. And that's why we're beginning the age of hoarding. What's happening is that governments are buying copper metal as a proxy on money. And they're not reporting it.

• 1:05:03Speaker 03

  And nobody can calculate the supply, demand, demand balance on any of these metals because why would you? Like, we're seeing the statistics that China's buying gold all of a sudden. And they're not buying our treasuries. They're selling our treasuries. And some people think Bitcoin is an alternative asset for the United States dollar. There's a great disbase, you know, debasement trade starting. Hedge funds borrow the N and rely on the N to weaken, not to have to pay the money back. But we're at an inflection point now where this is all being exposed and everything is becoming naked and available to global scrutiny.

• 1:05:46Speaker 03

  And we're seeing that demand has come against push. And we're getting into a more sophisticated understanding that, do you want AI? To what good? Do you want to make all of our kids get brainwashed on TikTok or Facebook? Do you really want to get our kids? We're, we're turning into two rival tribes here in the United States with, with the way social media is working. And it's all driven by AI. And AI can make it even more dangerous. You know, I've got a grandson, you know, when I took my grandson's iPad away, just freak out, right? So, yeah, I'm a baby boomer. Yeah, I admit it, you know, I admit it.

• 1:06:31Joe Weisenthal?

  Well, Robert, really looking forward to having you back tomorrow for part two and then the next day for part three of this discussion. But no, really appreciate you coming on Odd Lots. That was fantastic. We should talk again.

• 1:06:43Speaker 03

  Yeah, you know, to be continued.

• 1:06:57Joe Weisenthal?

  I wasn't expecting to talk about sex robots.

• 1:06:59Tracy Alloway?

  I was gonna say.

• 1:07:01Joe Weisenthal?

  But when we're thinking about future, future sources of demand for copper.

• 1:07:05Tracy Alloway?

  For energy.

• 1:07:06Joe Weisenthal?

  I suppose, I suppose that's one.

• 1:07:08Tracy Alloway?

  Yeah, gotta plug in.

• 1:07:10Joe Weisenthal?

  You gotta build it and you gotta plug it in and you have to keep it plugged in. Yeah.

• 1:07:13Tracy Alloway?

  Well, as far as baby boomer conversations go, that was a fun one.

• 1:07:18Joe Weisenthal?

  Yeah, for sure.

• 1:07:19Tracy Alloway?

  I, I didn't hear a lot of solutions to the problem, which I guess is why we're talking about this at all.

• 1:07:26Joe Weisenthal?

  There are obvious solutions, but I think before you can even talk about solutions, you have to identify the problems. And I think one of the problems that we face is that at every step of the chain, there are constraints, right? So let's say you make the decision to, we really want to make a big investment in a new copper mine somewhere. Well, there's a years long wait to get the equipment, to get the earth moving equipment or the engines that you need to do that. And the builders, someone says, okay, we want to build a lot more engines because there are people who want to build a lot more mines. Well, I guess then we need more gallium or whatever critical resource it is.

• 1:08:08Joe Weisenthal?

  And so I think one of the things that's very helpful is to say like, oh, just build more mines, just build more memory. But in each leg of the chain, one level up, up, you know, higher up river, et cetera, they have their own backlog.

• 1:08:20Tracy Alloway?

  And it's still not clear that the market will actually reward you for increasing production because you still have the volatility and super cycle supply problem. Yeah, seems hard.

• 1:08:30Joe Weisenthal?

  I think he said plenty. It's like almost, I don't have anything to add to it, you know?

• 1:08:34Tracy Alloway?

  Yeah. All right. Shall we leave it there?

• 1:08:35Joe Weisenthal?

  Let's leave it there.

• 1:08:36Tracy Alloway?

  This has been another episode of the All Thoughts Podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.

• 1:08:41Joe Weisenthal?

  And I'm Joe Weisenthal. You can follow me at the Stalwart. Follow our producers, Kermit Rodriguez at Kermit Armand, Dashell Bennett at Dashbot, Kale Brooks at Kale Brooks, and Kevin Lozano at Kevin Lloyd Lozano. And for more Odd Lots content, go to Bloomberg.com/oddlots. We have a daily newsletter and all of our episodes. And you can chat about all these topics 24 seven in our Discord, discord.gg/oddlots.

• 1:09:05Tracy Alloway?

  And if you enjoy Odd Lots, if you like it when we talk about mining, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.