BILLIONAIRE mining entrepreneur Robert Friedland has warned that deteriorating international relations are disrupting global supply chains with serious implications for the copper industry.
The founder of Ivanhoe Mines told the Financial Times that worsening US-China relations were making it increasingly difficult and costly for miners to secure essential equipment, leading to project delays. “We’re seeing a breakdown in the international order,” Friedland said at the beginning of LME week in London, the annual metals industry gathering. “These tensions are Balkanising the world economy, and we see it in the copper industry.”
Friedland said lead times for equipment orders were extending whilst constructing new mines was becoming progressively more expensive. “We have very significant global tensions developing … unlike anything I’ve seen,” he added.
The warnings come as copper prices surge following multiple supply disruptions. US miner Freeport-McMoRan said in September it could not fulfil customer contracts after a fatal mudslide at Indonesia’s Grasberg mine. Meanwhile, operations at Codelco’s El Teniente facility were partially suspended following a deadly tunnel collapse in July.
Copper prices approached record highs above $11,000 per ton last week before retreating on Friday amid renewed US-China trade friction.
Friedland said the world was in “the foothills of a major shortage of copper” expected before 2030. Máximo Pacheco, chairman of Chile’s state-owned Codelco, said the world already faced a supply “deficit”, with the industry most concerned about “operational continuity”.
On Monday, Codelco announced a minority investment in I-Pulse, a technology firm co-founded by Friedland, said the Financial Times. “We need new technology in order to improve our competitiveness and our cost structure,” Pacheco said.
The developments follow new US import tariffs and Chinese export restrictions on rare earth metals.