Stockholm (NordSIP) – At Skagen Fonder’s 2022 New Years conference, Robert Friedland, Founder and Executive Co-Chairman of Ivanhoe Mines, presented the case for copper in a greener world as exemplified by the efforts of Ivanhoe in the Democratic Republic of the Congo.
Copper is the New Oil
According to Friedland, “Copper is the new Oil.” According to him, if we are going to reduce global warming and stop burning coal and oil, we’ll need to increase the electrification of our economies.
“When I grew up, a Ford Mustang had maybe as much as 15kg of copper. If you buy a Tesla today, it will have 100kg to 200kg of copper. But it is not just the copper in the car,” Friedland argues, noting that the metal is also an important component for solar energy electricity transmission.
“Copper is the element in the periodic table that conducts electricity the best,” Friedland argues. “Everything in the new economy is completely dependent on copper and the richest copper endowment is in Democratic Republic of the Congo (DRC).”
Ivanhoe has also implemented a number of measures to increase the sustainability of mining in the DRC. “We are reinventing mining. Mining is nothing but a means to an end. We are mining because we want to change the entire structure of the supply chain on this planet. If I came from Mars and my (Martian) masters told me to find copper for electrification, I would have to go to the DRC,” Friedland argues.
According to him, although the DRC is second only in copper deposits to Chile, that country’s larger deposits are very energy-intensive and “produce enormous amounts global warming gas as a by-product of the copper production. We’ve had to reinvent mining from the top down, and all the ESG characteristics of mining,” Friedland says.
“We are heading to being a zero global warming gas producer of the metal that everybody needs. We are opening up what we are doing to the world to scrutinise as we reinvent mining.” To train and feed its labour force, Ivanhoe hopes to have a positive effect on the local communities. “Since the mine will have a life of 50 to 100 years, we have a chance to really have a profoundly beneficial impact on everyone within a 25km to 50km radius,” Friedland hopes. According to him, Ivanhoe should be able to satisfy as much as 5% of global demand for copper. “We should end up being the second-largest copper mine in the world, but the only one that does not rely on coal in its electrical grid,” thanks to the investments it has made to upgrade the Congolese hydroelectric infrastructure in partnership with Stucky, a Swiss company.
“Women are Better Managers”
He adds that Ivanhoe has given prominence to local women in important roles, “because women are better managers than men. This is not an ideological statement. This is a verified fact. When we go mining in Africa, a lot of the local men are alcoholics. They are not very responsible. The women have children [and] they are better on machinery. We’ve been able to quantify that when women operate machinery they are much more respectful of the equipment. They show up to work on time and they go home to take care of their kids,” Friedland explains.
“Our ambition is to have 50% of the whole enterprise conceptualised and managed by women. We find that mining is just a very small subset of a bigger ESG challenge, the entire reinvention of mining is dependent on women,” he adds.
Local Ownership and Integration
“Uniquely, we’ve given 20% of the total project to the ministry portfolio in the central government. We work very closely with the woman who is the governor in the province that we operate and the woman who is the minister of mines in the DRC,” Friedland says.
Ivanhoe is hiring local young men and women on the basis of their abilities and eagerness to learn and training them. “This is not the mining of your father with a pick and shovel,” Friedland warns. “We bring experts in to train local Congolese. We are about 97% Congolese now. Only 3% are expats. Expats are expensive and they are there to train the locals,” he explains. Ivanhoe expects the quasi totality of its employees to be Congolese in 5 years.
“We get the best of the best [of the local Congolese labour force]. Everyone is highly educated and trained,” to operate the sophisticated mining tools operated by Ivanhoe. “ According to Friedland, Ivanhoe may be “operating very near the bottom of the global cost curve” thanks to the location of its operations, but “the local workforce is equal to the best in the world.”
Friedland explains that Ivanhoe’s integration is not limited to its impact on the labour market. “We are generating a lot of agricultural development to feed the labour force. We are building 140 Tilapia ponds for fish farming. There is also a women’s cooperative growing eggs from Australian chickens.” All the food that is grown locally is sold to the Ivanhoe mines at global market prices.
The reality of what is possible in the Congo is quite different from negative information provided by the media, according to Friedland. Throughout the presentation, he praised the present government’s anti-corruption efforts.
“I’ve seen positive changes in Africa. We have almost no COVID and almost no deaths from COVID. Our people are vaccinated with Moderna and Pfizer vaccines. We operate to the worlds’ best health standards.” In the summer of 2020, Ivanhoe Mines denied allegations by human rights groups that workers had been illegally confined to Congolese mining sites to avoid the spread of COVID-19.
The Scandinavian Connection
Although Ivanhoe’s operations are located in Africa, many of the tools used for mining come from Scandinavia. “Today, everything is mechanised. No one is lifting anything heavier than a pencil. It’s all multi-million dollar automated machinery, most of which is made in Scandinavia – Svedala or Epiroc. A lot of it is Swedish or Norwegian equipment. In fact, a couple of hundred million dollars was financed by Scandinavian governments after an extensive audit of our ESG characteristics.”
“This is not about making our share price go up. This is about making history. If we can find a way to mine copper sustainably, we will have an energy transformation. If we can’t find a way to mine copper sustainably, we are doomed to fail. We need all the help we can get, especially from the Scandinavian countries that are world leaders in decarbonisation.
Friedland is looking forward to the end of the pandemic and the return of a new normal. “The more Swedish, Norwegian and Danish and Finnish people we get, the more we get their governments to support us, the better chance we have to make this transition,” Friedland concluded.