“The amount of copper required between 2022 and 2050 is more than all the copper consumed in the world between 1900 and 2021.” S&P Global
“Someone must say the unsayable. None of these men have the guts” Margaret Thatcher
This week we are digging into the material challenges around the so-called green revolution, and saying the unsayable.
“My mama told me when I was young, we are all born superstars.” Lady GagaGood morning I’m Austerity Jones and I am back with C Thomas Printer. Today we are going to talk about the green revolution aren’t we C Thomas?
C Thomas: Good morning, Austerity and yes we are. There is so much “talk” out there about going green, and how going green will save the planet, and how it is actually cheaper to go green. Now, you can get me to listen to the first, smile at the second, but at the third, I’m sorry money talks and bullshit walks. My friend and I have been having this mining and geology debate on the sustainability of this green change up. My friend is all in on the green revolution, worships at the altar of Musk and technology, and sent me a link to an article proving that the concerns I had told him in the past were myths, and he was a mythbuster and actually referenced them. I humored him and opened up and read the article and looked at the research surrounding the article and I just smiled to myself and I said, “Self, just let it go. But I am way more petty than that.”
I’d like to protect the names of the people that wrote the article for a couple reasons, I don’t want the C Thomas Printer Cooperative army to harass and stalk them and make their lives miserable for the research that they attempted to do, and second, giving them any attention at all is exactly what they want. You see, that is all we have in society today is attention gathering. The worst thing you can do is ignore something, that is the best medicine so I will do that today but I will try and get my point across.
Background on this author of this article was easy to find, a couple google searches and I found that this person had gotten a couple degrees from liberal back east colleges and then became a research assistant a couple times, worked in sorority leadership, was an intern for a green company, then was a researcher for a company that tried to do what impossible meats did, but for fashion. No I’m not making that up. She then became a freelance journalist and is now a climate and energy reporter. Despite her degrees, one of which was in journalism, I was instantly sceptical that this woman knew anything about geology or mining, because there was nothing to suggest that she did. I dug deeper and I said let me see what “new report” she was citing as the basis for her argument. Because that’s all she was really doing was discussing this new report that had proven rare earth minerals and limited commodity resources weren’t a factor in green agenda adoption.
So I looked at this new report. I read the research and I am not a geologist either, but as an investor that does research I saw some numbers in the charts and graphs that I wanted to investigate because they seemed surprising, but I gave it a read. Then I decided to check on the CVs of the researchers. The first one had degrees in environmental and ocean science and worked as a research assistant while getting a phd in the mentioned ocean sciences where his thesis was on plankton. He then worked as a climate and energy analyst at a think tank in the bay area before becoming the co-director of that program. His bio says that he is a scientist with policy interests and advocacy experience. This brings us to the word of the day- advocate.
Advocate- a person who publicly supports or recommends a particular cause or policy.
Now our next researcher cited has a bio that leaves us no doubt that he is also an advocate. In their bio they point out that the media calls them a “tireless chronicler, charter, and commentator on all things climate.” This person was a scientist with experience in reducing residential and small business energy usage before creating and comparing climate models with “a particular focus on transitioning China away from coal.” The rest of the team would follow the same patterns of being green disciples that had a connection to this climate think tank in the bay area. So they are advocating an agenda, nothing is wrong with that, I’m sure being students today the indoctrination of the green agenda is all encompassing. We can look at two different sides of an argument here at CTPC, but looking at two opposing viewpoints’ data and deciding how they can be so tremendously different is where the thinking comes in as well as my bias. But as we discuss geology and actual figures from companies that work in these fields I personally chose to give their research a little more weight versus marine biologists and advocates paid for and funded by climate change funding, but present the numbers and let our audience decide for themselves.
For comparison, I used and S&P global research document that I will provide the link to in the notes. I used their research because they are one of the world’s leading research firms that sells research to investment banks, insurance companies, and market participants with a long history of accurate and fact based data presented without bias for analysis including green initiatives, China industrial usage and much more. It was surprising how closely the new report followed the S&P global model as they both worked toward the 1.5 degree global cooling goal, which I believe is the Paris accord target, so it made for easy comparisons. Let’s start with the big one- copper, which is non replaceable at cost due to its electricity transmission properties.. Current non-ev cars use between 25-50 lbs of copper to keep it simple, a new Tesla comes in at 180 lbs per car, more electricity requires more copper in the battery etc. No one disputes this but they do dispute important facts about copper mining.
Let’s start with a quote from the S&P Global research:
“The amount of copper required between 2022 and 2050 is more than all the copper consumed in the world between 1900 and 2021.” Now, that frames the size and scope of the material challenges involving just one of mined elements that we will discuss. Codelco, the world’s biggest copper producer warned that this would require opening a mine the size of BHP’s Chilean mine Escondida (the largest mine in the world) every year for 8 years or as S&P Global suggests opening a mine that does 30% of that and still a major mine every year for almost 30. These two research scenarios are in alignment with one posed to profit from the increased demand and with no reason to inflate numbers, and the other with a 100 year reputation of providing solid research. The problem is it takes about 15 years to get permits to even open a mine and even linger here in the US, and that takes us past 2035 with current production at 25 mmt(million metric tons).
S&P Global suggests we will need 82% more annual copper production to meet demand by 2035 versus 14% by 2050 for our climate advocates. S&P Global uses a bottom up approach with growth of 7.1 mmt in automotive, 2.8 mmt in T&D (power transmission and distribution), and 3.1 mmt in solar generation technology being the three key drivers. They investigate ev powertrain differences, battery technologies, geopolitical issues, permitting, tidal, solar, wind, and even future increased recycling efforts to mitigate increased mining demands. It is an estimate that is just an estimate but far different than 14%, but let’s forget percentages and talk about actual tons of content.
The climate advocates research suggests we will need 82 mmt cumulative demand from 2020-2050 whereas the S&P Global research projects an additional 23 mmt every single year starting before 2035. Maximo Pacheco, the Codelco chairman, told the Asia Copper Week conference that the annual deficit will be 8 million tonnes in 10 years as they said global demand will be over 31 mmt in 2032. Now 31- 8 is 23 mmt and we know that we currently have 25 mmt production Mr Chairman so how can that be? Mines are a declining resource in total, the grades (the amount of copper that we get out of every ton of mined rock gets less and less), and most mines that are world class producers are decades old. President Biden chided the big energy companies during his state of the union address that they aren’t investing in enough production, well the mines haven’t either due to red tape, permitting issues, and threats of government nationalization like First Quantum is facing in Panama after spending a decade developing its Cobre Panama mine. Let’s not forget that Peru is a major copper producer and how often have we spoken about their protests and political unrest.
Next week we will discuss the likelihood of actually being able to produce enough copper and also dive into some rare earth mineral situations that seem to be overlooked in this transition.
Sincerely yours,
C Thomas Printer
“Someone must say the unsayable. None of these men have the guts” Margaret Thatcher This week’s financial tip
Buy bulk, people! If it is something that you are going to use and is not perishable, you will save money on a unit cost basis by buying bulk. Compare a normal size pack of toilet paper to a super jumbo pack- it’s a lot cheaper by the roll and that is how we roll here at the CTPC. Over to you, Austerity.
On this date in history
205 years ago to be exact, the world’s largest copper producer Chile declared their independence from Spain.
Also born on this date
The naturalist Charles Darwin.
Resources
Future of Copper (Page 38-44)