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Robert Friedland, founder and co-president of Ivanhoe Mines reported at the Investing in African Mining Indaba 2022 on May 11 that to maintain 3.5 percent GDP growth, without considering electrification of the global economy, more than 700 million tons of copper will need to be mined over the next 22 years, which is the same volume of copper ever mined.

The mining industry has a huge challenge, and electrification is key to achieving global decarbonization goals. A single 1,000-pound EV battery uses about 500,000 pounds of raw materials, meaning that the transition of the world’s passenger vehicles to EVs alone will require the mining of more metals over the next 30 years than have ever been mined throughout history.

By 2030, 20 million EV charging points are expected globally, with copper consumption 250 percent higher. In 2040, electric passenger vehicles will require more than 3.7 million copper per year while ICE (internal combustion vehicle) vehicles will need about 1 million tons.

ICE vehicles contain 20 kilograms of copper, rising to 40 kilograms for a hybrid vehicle, 109 kilograms in a plug-in EV, and much more is expected to be contained in next-generation electric trucks.

“We cannot get to this point without electrifying the world economy. It’s the era of electrifying everything, but the problem is that renewable technology is absurdly metal intensive,” Friedland said.

He pointed out that solar and wind technology has seven to 37 times the copper intensity of electricity. In addition, all power grids globally are unreliable and huge investments are needed to modernize them: in the United States alone, about $208 billion in investments are needed by 2029 and about $338 billion by 2039, according to Friedland.

The real question is: power grids are old and cannot handle all the world’s electrification. How much copper will we need to build new smart grids in Europe, the United States, and Africa?

According to the founder of Ivanhoe Mines, a global shortage of copper, nickel and other battery metals is expected due to insufficient investment in the mining industry. Per BMO Capital Markets, a deficit of 9 million tons of copper is expected by 2030.

Older copper mines have also experienced declining grades, meaning more water, electricity and global warming use per unit of copper produced. Friedland said the energy required to produce copper has increased 16 times per unit, while consumption has doubled.

Where will all the metals for the energy transition, including copper, come from? The world will need to invest $240 billion over the next five years to meet the growing demand for metals.

Africa is part of the answer, as it contains many reserves, and the Arabian Shield is also where responsible and future metals and minerals will be mined. Ivanhoe is expanding its Kamoa-Kakula copper mining complex in the Democratic Republic of Congo, which will increase copper production capacity to about 600,000 tons per year by the fourth quarter of 2024, making it the third largest copper mining complex in the world and the largest in Africa.

First production from the phase 3 expansion is expected to begin by the end of 2024. Friedland said 10-20 more large copper mines will be needed to maintain 3.7 percent economic growth, and even more for electrification. The world needs to change the way we produce, distribute and transmit metals and how the entire supply chain is driven.

Africa could also contribute to the hydrogen economy-South Africa holds some of the world’s largest palladium and platinum resources, Friedland said, and most of the world should look to South Africa, since sourcing from Russia is no longer an option. Hydrogen cars need five times as much platinum as gasoline cars

Ivanhoe is developing the 64 percent-owned Platreef PGM mine in South Africa, which is advancing to first production and is expected to produce 590,000 ounces/year of palladium, platinum, rhodium, gold, and over 40 million pounds/year of nickel and copper in phase 2 expansion.