WEBVTT - Robert Friedland on the World's Monumental Shortage of Copper 0:00:03.880 --> 0:00:06.420 Hello, Odd Lodge listeners. I'm Joe Wiesenthal. 0:00:06.620 --> 0:00:07.560 And I'm Tracy Alloway. 0:00:07.700 --> 0:00:10.270 We're the hosts of the Odd Lodge podcast, and we've 0:00:10.300 --> 0:00:11.480 got something exciting for you. 0:00:11.770 --> 0:00:13.970 That's right. So one of the best parts of hosting 0:00:14.070 --> 0:00:16.830 our podcast is we get to actually meet and interact 0:00:16.950 --> 0:00:19.709 with our listeners. 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News. 0:01:04.920 --> 0:01:08.620 Hello and welcome to another episode of the Odd Lots podcast. 0:01:08.800 --> 0:01:09.900 I'm Joe Weisenthal. 0:01:10.160 --> 0:01:11.080 And I'm Tracy Alloway. 0:01:11.500 --> 0:01:14.230 Oil has been in the headlines a lot lately. 0:01:14.390 --> 0:01:14.670 Just a bit. 0:01:14.690 --> 0:01:20.890 For obvious reasons. But, you know, it has gotten headlines. 0:01:20.970 --> 0:01:24.410 But another commodity that's near basically at record highs that 0:01:24.430 --> 0:01:26.490 just keeps to be going straight up for years now 0:01:26.530 --> 0:01:26.890 is copper. 0:01:27.180 --> 0:01:30.789 Yeah, so copper, I think, reached a new high of, 0:01:31.000 --> 0:01:35.429 it was something like 14,875 a ton earlier this week. 0:01:36.069 --> 0:01:39.930 It is down about 3% as we're recording this episode, 0:01:39.970 --> 0:01:42.190 but I think it kind of speaks to, I guess, 0:01:42.270 --> 0:01:44.369 one of the tensions when it comes to copper, which 0:01:44.470 --> 0:01:47.350 is everyone has been saying, or a lot of people 0:01:47.410 --> 0:01:51.640 have been saying, that there is this long-term, strong demand 0:01:51.800 --> 0:01:55.740 impulse for copper because data centers use copper. We need 0:01:55.780 --> 0:01:59.270 it to electrify the grid. all of that stuff. And 0:01:59.370 --> 0:02:03.070 yet the price has often lagged behind. And moreover, you 0:02:03.090 --> 0:02:07.550 get this volatility that means people who actually produce copper 0:02:07.950 --> 0:02:10.760 are sometimes reluctant to increase production. And in fact, I 0:02:10.790 --> 0:02:13.400 was looking at a note from our colleagues over at 0:02:13.440 --> 0:02:17.040 BNF recently, and they were saying that this year we 0:02:17.080 --> 0:02:21.320 might have the first decline in copper production since 2017. 0:02:21.320 --> 0:02:26.320 I mean, this is part of why so-called like super cycles, 0:02:26.730 --> 0:02:27.350 can happen. 0:02:27.370 --> 0:02:28.570 And we've talked. 0:02:28.410 --> 0:02:30.680 About this in so many different roles, both with the 0:02:30.720 --> 0:02:33.460 pure like sort of like resource extraction industry, but even 0:02:33.480 --> 0:02:36.060 now there's sort of like manufactured goods, like if we're 0:02:36.080 --> 0:02:38.739 talking about memory, which is you can have these like 0:02:38.800 --> 0:02:42.120 periods of volatility. You don't really want to invest more 0:02:42.160 --> 0:02:45.540 during periods of volatility. Then you sort of have like 0:02:45.560 --> 0:02:49.690 a scarcity of capacity. Then it ramps up the price. 0:02:50.070 --> 0:02:51.570 And then it's like, oh, build more. But then it's like, 0:02:51.630 --> 0:02:52.489 everyone remembers that vault. 0:02:52.510 --> 0:02:53.109 Memories are long. 0:02:53.210 --> 0:02:53.410 Right. 0:02:53.450 --> 0:02:54.950 And we saw that in Shale as well. 0:02:55.030 --> 0:02:55.930 Memories are long. 0:02:56.389 --> 0:02:59.370 And then, you know, it's like, I guess it's human psychology. 0:02:59.830 --> 0:03:01.790 Everyone finally taps at the same time. 0:03:02.030 --> 0:03:03.079 And they're like, you know what? 0:03:03.320 --> 0:03:06.620 We're going to massively expand mining operations, which don't happen 0:03:06.660 --> 0:03:09.660 overnight by any stretch. And then suddenly you get gluts 0:03:09.720 --> 0:03:12.040 and your shareholders get mad at you, etc. Why don't 0:03:12.060 --> 0:03:15.840 you just ride this wave, etc.? And so these things 0:03:15.940 --> 0:03:18.970 can then just persist and feed on each other for 0:03:19.530 --> 0:03:22.070 a long time. But to your point, it's a crucial, 0:03:22.090 --> 0:03:26.950 you know, there's so much interest these days in resource nationalism, infrastructure, 0:03:27.010 --> 0:03:28.410 electricity and so forth. 0:03:28.669 --> 0:03:30.070 And copper really is at the center of it. 0:03:30.310 --> 0:03:32.649 Did you see this is a slight tangent, but did 0:03:32.669 --> 0:03:34.430 you see the tweet from Peter Schiff? 0:03:34.910 --> 0:03:36.990 No. What do you say? 0:03:37.660 --> 0:03:41.180 With copper at 6.85 per pound, the melt value of 0:03:41.240 --> 0:03:46.890 a pre-1982 penny is 4.5 cents. And he calls it, 0:03:47.470 --> 0:03:51.730 he calls melting pennies not only risk-free, but the upside 0:03:51.770 --> 0:03:55.150 potential is huge. Which is kind of funny because I'm 0:03:55.230 --> 0:03:58.570 pretty sure that melting down U.S. currency is in fact 0:03:58.610 --> 0:03:59.950 illegal in the U.S. I don't think you're supposed to. 0:04:00.010 --> 0:04:01.550 And so there might be a little bit of a 0:04:01.590 --> 0:04:02.060 risk there. 0:04:02.080 --> 0:04:06.270 I also like think about like, how much legwork and 0:04:06.370 --> 0:04:09.250 effort you would have to do to even like find 0:04:09.330 --> 0:04:13.300 a bunch of pre-1982 pennies and whether that would come 0:04:13.340 --> 0:04:15.700 to more than three pennies each when you think about 0:04:15.720 --> 0:04:16.060 the effort. 0:04:16.200 --> 0:04:18.420 Anyway, but yes, copper. 0:04:18.740 --> 0:04:20.580 I mean, that said, I mean, that tweet is funny 0:04:20.620 --> 0:04:23.400 for many reasons, but there is a lot of supply, 0:04:23.740 --> 0:04:26.310 copper supply that comes from recycling. And that is in 0:04:26.370 --> 0:04:28.630 tension with the new production as well. 0:04:28.650 --> 0:04:30.230 So we should talk about that. And that is an 0:04:30.390 --> 0:04:31.150 important element. 0:04:31.310 --> 0:04:31.650 Anyway. 0:04:32.470 --> 0:04:35.740 We got to do a copper episode. And this time 0:04:36.210 --> 0:04:38.950 we're going to be speaking with someone like right in it. 0:04:39.440 --> 0:04:42.720 Someone who has to make these decisions about investment and 0:04:42.779 --> 0:04:46.940 how sustainable it is, what's optimal and the cost to 0:04:47.440 --> 0:04:50.930 build out new capacity, how these calculations actually work. We 0:04:50.960 --> 0:04:53.289 literally have the perfect guest today. We're going to be 0:04:53.330 --> 0:04:57.370 speaking with Robert Friedland. He is the founder of Ivanhoe Mines, 0:04:57.830 --> 0:05:02.060 Ivanhoe Electric. a new startup called iPulse, which we're going 0:05:02.080 --> 0:05:04.750 to learn about. He has been in the industry for 0:05:04.930 --> 0:05:09.469 over 40 years, literally getting his hands dirty and pulling 0:05:09.490 --> 0:05:12.640 copper out of the ground. So, Robert, thank you so 0:05:12.680 --> 0:05:14.620 much for coming on OddLots. Thrilled to have you here. 0:05:14.980 --> 0:05:16.980 What a pleasure to be in the New York studios. 0:05:17.450 --> 0:05:19.670 I just had the opportunity to meet Mike Bloomberg, which 0:05:19.710 --> 0:05:20.490 is amazing. 0:05:20.610 --> 0:05:20.990 This is great. 0:05:21.050 --> 0:05:23.210 You know, I've always said while I work at Bloomberg, 0:05:23.290 --> 0:05:25.760 it's like the old ESPN commercials where you like walk 0:05:25.800 --> 0:05:28.360 around and you get to like meet all these luminaries 0:05:28.400 --> 0:05:31.360 just milling about the office, including our boss. 0:05:31.620 --> 0:05:33.839 Why don't you give us a, for those who don't know, 0:05:34.180 --> 0:05:34.479 why don't. 0:05:34.400 --> 0:05:37.920 You give us a little bit of overview of Ivanhoe 0:05:37.940 --> 0:05:41.730 Mines and just like the portfolio of things you work on? 0:05:41.810 --> 0:05:44.010 What does it all add up to and look like? 0:05:44.279 --> 0:05:46.050 Well, in life, you know, you tend to learn more 0:05:46.080 --> 0:05:49.170 and more about less and less. We've been in the 0:05:49.210 --> 0:05:55.750 mining business for over 40 years globally. And in recent years, 0:05:56.490 --> 0:05:59.270 Standard & Poor's has declared copper as the new oil. 0:05:59.920 --> 0:06:02.780 We used to fight wars over crude oil. I doubt 0:06:02.820 --> 0:06:06.380 we would have gone after Saddam Hussein with shock and 0:06:06.480 --> 0:06:10.810 awe if there was absolutely no oil in Iraq. But today, 0:06:10.830 --> 0:06:14.409 the supply chain, which is a mystical concept to most people, 0:06:15.710 --> 0:06:21.290 is being balkanized in competing geopolitical groups. There's a war 0:06:21.350 --> 0:06:24.830 going on that's spreading, affecting the Strait of Hormuz and 0:06:24.880 --> 0:06:29.700 other critical materials. And copper is central to everything we do. 0:06:29.779 --> 0:06:34.160 This super high technology studio, which is enabling us to 0:06:34.200 --> 0:06:37.120 talk to the whole world, is completely dependent on copper. 0:06:38.120 --> 0:06:42.740 And more importantly, on mining, because everything you touch, we 0:06:42.820 --> 0:06:45.990 either mined it or we grew it agriculturally. And the 0:06:46.050 --> 0:06:49.870 farmers are totally dependent on mined product anyway, like fertilizer 0:06:49.970 --> 0:06:53.650 or their tractors. So it is time to talk about 0:06:53.810 --> 0:06:57.650 copper's role as a paradigm for a suite of critical 0:06:57.690 --> 0:07:00.860 metals without which we're really going to have severe problems. 0:07:02.040 --> 0:07:04.180 Can you give us your sort of origin story? How 0:07:04.220 --> 0:07:06.480 did you get into mining? Why were you interested in 0:07:06.500 --> 0:07:07.020 the space? 0:07:07.040 --> 0:07:10.820 This is a strange and bizarre story, but Steve Jobs 0:07:10.880 --> 0:07:15.700 and I had a partnership that goes way, way, way back. 0:07:16.120 --> 0:07:20.820 Our partnership was stolen and has been sold on the 0:07:20.860 --> 0:07:23.740 secondary market to a movie producer. But Steve and I 0:07:23.780 --> 0:07:27.720 were 50-50 partners where I was the general partner and 0:07:27.740 --> 0:07:30.640 he was the limited partner. And we financed it by 0:07:30.680 --> 0:07:33.880 a loan from the Bank of America on his Apple shares. Wow. 0:07:34.680 --> 0:07:35.800 What year are we talking about here? 0:07:35.980 --> 0:07:38.320 Oh, it would have been in the 1980s. Okay. And 0:07:38.480 --> 0:07:41.880 we went out and started buying timberland because we thought 0:07:41.980 --> 0:07:44.540 we were going to be rich hippies. And trees grow 0:07:44.580 --> 0:07:48.730 about 6% a year. Just leave them alone. Douglas fir trees. 0:07:49.030 --> 0:07:51.330 We thought we'd just live in a teepee and get rich. 0:07:51.970 --> 0:07:54.650 That's the dream, being a rich hippie, I got to say. 0:07:54.910 --> 0:07:58.670 Yeah. And what happened was some of this timberland we 0:07:59.010 --> 0:08:01.970 bought in Oregon, there was an old gold mine that 0:08:02.010 --> 0:08:04.700 had been closed down in 1942. I don't know if 0:08:04.720 --> 0:08:10.300 you're aware, under Executive Order L-208, Franklin D. Roosevelt shut 0:08:10.440 --> 0:08:13.840 all the gold mines to force the miners to mine 0:08:13.900 --> 0:08:18.000 lead and mainly copper and zinc for the war effort. 0:08:18.750 --> 0:08:21.570 And in fact, during the war, for three years, we 0:08:21.610 --> 0:08:24.489 made our pennies out of zinc rather than copper because 0:08:24.530 --> 0:08:28.590 copper was so critical to World War II. In World 0:08:28.630 --> 0:08:30.630 War I, the price of copper went to the moon, 0:08:31.560 --> 0:08:35.110 William Randolph Hearst owned the Butte, Montana copper mine. And 0:08:35.150 --> 0:08:37.070 with that, he bought up all the media in the 0:08:37.090 --> 0:08:39.930 United States and built the Hearst Castle. So he was 0:08:39.950 --> 0:08:42.630 sort of the Jeff Bezos of his day. And in 0:08:42.670 --> 0:08:45.770 World War II, copper was so scarce, we had to 0:08:45.809 --> 0:08:49.109 mine zinc to make our pennies. And today, as you 0:08:49.170 --> 0:08:52.960 just said, a copper penny is worth about four or 0:08:53.010 --> 0:08:57.079 five cents. And that's a good sort of indication of 0:08:57.120 --> 0:08:57.740 where we're headed. 0:08:58.140 --> 0:09:01.690 So there was a mine. What happened from there? 0:09:01.950 --> 0:09:04.929 Keep going, keep going. 0:09:05.030 --> 0:09:07.170 If you want to just spend an hour telling Steve 0:09:07.190 --> 0:09:09.330 Jobs mining stories, I'm very happy. 0:09:09.030 --> 0:09:09.489 To just talk about it. 0:09:09.490 --> 0:09:10.829 I just want to hear mining stories. 0:09:10.850 --> 0:09:13.830 Yeah, yeah, yeah. Well, we could spend days on Steve 0:09:13.870 --> 0:09:20.160 Jobs stories, but one thing leads to another, and I 0:09:20.220 --> 0:09:23.680 spent years in India studying yoga and meditation and never 0:09:23.780 --> 0:09:27.199 dreamed in my wildest dreams that by my age I 0:09:27.200 --> 0:09:29.500 would learn everything there is to know about almost nothing, 0:09:29.540 --> 0:09:32.280 which is how to find mines and how to develop 0:09:32.320 --> 0:09:36.380 them in countries around the world. And we've done that 0:09:36.480 --> 0:09:41.900 probably more than anybody. And we've found more critical copper 0:09:41.940 --> 0:09:44.640 mines and other types of mines than any other group 0:09:44.679 --> 0:09:47.470 in the world. So we've developed sort of a love-hate 0:09:47.510 --> 0:09:52.850 relationship with mining. We've tasted failure and we've tasted success. 0:09:52.950 --> 0:09:56.390 And success tastes a lot better. And now I've been 0:09:56.429 --> 0:09:59.970 spending more time with our government, both the Biden ministry 0:10:00.360 --> 0:10:04.579 and the Trump administration, as the walls start squeezing in 0:10:04.660 --> 0:10:07.820 on us. If you think about Indiana Jones and the 0:10:07.880 --> 0:10:10.330 Temple of Doom and the walls are coming in to 0:10:10.380 --> 0:10:13.490 squeeze you and there's this giant ball coming down a 0:10:13.550 --> 0:10:16.590 ramp to crush you and you have to dive underneath 0:10:17.030 --> 0:10:20.900 a trap door that's coming down. We are really looking 0:10:21.179 --> 0:10:25.390 at the weaponization of certain critical raw materials in the 0:10:25.429 --> 0:10:31.770 supply chain. And it's really a profound national security interest. 0:10:32.270 --> 0:10:34.010 And it comes at the same time that a lot 0:10:34.030 --> 0:10:38.449 of humanity is still worried about anthropomorphic global warming. I 0:10:38.490 --> 0:10:41.230 know it's not as fashionable during the Trump administration to 0:10:41.690 --> 0:10:44.640 worry about how hot it is out there. But actually, 0:10:44.679 --> 0:10:48.000 last year was the hottest year in 132 years since 0:10:48.059 --> 0:10:50.760 temperatures were recorded And the metals we need to do 0:10:50.800 --> 0:10:54.069 something about that are the same metals that are needed 0:10:54.110 --> 0:10:58.030 for drone warfare or the defense from drone warfare. And 0:10:58.130 --> 0:11:01.620 so we're seeing a sort of perfect storm in a 0:11:01.640 --> 0:11:06.730 balkanized world economy where demand for certain critical metals is 0:11:06.990 --> 0:11:07.910 going to infinity. 0:11:24.270 --> 0:11:25.770 You know, I used to be a hippie, too. 0:11:25.790 --> 0:11:27.449 I was used to be. 0:11:28.460 --> 0:11:33.000 Well, you know, like I was raised by vegetarian parents 0:11:33.020 --> 0:11:36.020 who used to meditate. And then when I was in college, 0:11:36.100 --> 0:11:38.460 I lived in a vegan co-op and stuff like that. 0:11:38.780 --> 0:11:41.380 But now I work in a big office building in 0:11:41.640 --> 0:11:43.979 New York City. And occasionally I even have to put 0:11:44.200 --> 0:11:46.740 on a suit and tie. And I like think about like, oh, 0:11:46.760 --> 0:11:49.060 what is my 20? What would my 22 year old 0:11:49.080 --> 0:11:51.980 self have thought? Do you have those thoughts? Do you 0:11:52.040 --> 0:11:57.500 ever think about where you are today and then the 0:11:57.520 --> 0:12:01.420 25-year-old version of you and think, is this continuity? Would 0:12:01.460 --> 0:12:04.010 that person have been happy with me the way it was? 0:12:04.030 --> 0:12:05.050 Because I think about these things. 0:12:05.270 --> 0:12:09.770 Well, I'll deny the use of the word hippie. We'll 0:12:09.809 --> 0:12:12.090 say it was plain living and high thinking. 0:12:12.470 --> 0:12:13.370 Okay. 0:12:14.250 --> 0:12:17.190 We went through the psychedelic era before I was 20 0:12:17.190 --> 0:12:21.190 years of age in the late 1960s. And it was 0:12:21.210 --> 0:12:24.490 sort of tune on, tune in, drop out, and then 0:12:24.570 --> 0:12:27.750 crawl back. And then we got into yoga and meditation, 0:12:27.790 --> 0:12:29.949 went to India and did all that stuff for years. 0:12:30.650 --> 0:12:35.040 And then fell into sort of the reality distortion field 0:12:35.120 --> 0:12:38.700 of trying to dream up a business and make a difference. 0:12:38.780 --> 0:12:43.640 And now I've passed the age of 76. I'm sort 0:12:43.679 --> 0:12:47.400 of worried about our country's national security. I'm worried about 0:12:47.760 --> 0:12:50.980 the United States versus China. I think a lot of 0:12:51.020 --> 0:12:54.140 people are selling the idea that the Chinese people are 0:12:54.179 --> 0:12:58.190 the mortal enemy of the Americans. That's not true. It's 0:12:58.230 --> 0:13:02.490 not true. But our systems are in conflict, and the 0:13:02.530 --> 0:13:06.709 world is balkanized into opposing groups. And we're going away 0:13:06.750 --> 0:13:09.190 from crude oil being critical. We have plenty of crude 0:13:09.230 --> 0:13:12.250 oil in the United States, although we don't have much 0:13:12.790 --> 0:13:16.130 refining capacity. The crack spreads on diesel are at an 0:13:16.190 --> 0:13:19.850 all-time high. Yeah. But these high diesel prices and the 0:13:19.910 --> 0:13:22.840 crisis around the Strait of Hormuz are going to lead 0:13:22.860 --> 0:13:28.059 to some really crazy implicit consequences. And we sit in 0:13:28.080 --> 0:13:31.699 the middle of that storm in the mining industry, particularly 0:13:31.740 --> 0:13:34.460 in copper. And that's something I'm very happy to talk 0:13:34.500 --> 0:13:34.760 to you. 0:13:35.080 --> 0:13:35.600 Yeah. 0:13:36.059 --> 0:13:39.600 So I'm I'm tempted to ask more about your psychedelics era, 0:13:39.620 --> 0:13:42.340 but I won't stick to the topic copper. 0:13:42.360 --> 0:13:42.420 So. 0:13:43.720 --> 0:13:47.020 We seem to have some consensus that demand for copper 0:13:47.100 --> 0:13:49.860 is going up. There's this need to electrify. There's the 0:13:49.900 --> 0:13:52.160 data center story. There's all of that. There's also the 0:13:52.220 --> 0:13:57.020 national security interest angle, which you just described. And yet 0:13:57.440 --> 0:14:00.760 production has lagged. We don't see a lot of new 0:14:00.780 --> 0:14:07.500 mines started. And I'm just wondering, with copper at $ 15, 000 0:14:05.460 --> 0:14:09.450 or almost $ 15, 000 a ton, what does the industry need 0:14:09.490 --> 0:14:13.050 to see in order to be confident in boosting production? 0:14:14.500 --> 0:14:16.640 Let's start with the fact that if we go back 0:14:16.679 --> 0:14:22.200 to Mohenjo-daro, our species has mined 700 million metric tons 0:14:22.260 --> 0:14:26.060 of copper. It sounds like a lot. And you could 0:14:26.100 --> 0:14:27.880 recycle it and get it back. All you have to 0:14:27.920 --> 0:14:30.500 do is tear down everything in the United States and 0:14:30.520 --> 0:14:32.590 make it look like the days of the woolly mammoths, 0:14:33.180 --> 0:14:36.730 and we'd get back about 300 million tons. And in Europe, 0:14:36.750 --> 0:14:39.090 we'd get 200 million tons, and in Asia and other, 0:14:39.090 --> 0:14:43.230 200 million tons. But unfortunately, we don't want to go 0:14:43.290 --> 0:14:48.490 back to freezing in the dark. And at the rate 0:14:48.770 --> 0:14:52.150 of current global economic growth with 8 billion people on 0:14:52.170 --> 0:14:58.160 this planet, to maintain 3% GDP growth, absent the electrification 0:14:58.620 --> 0:15:02.180 of the world economy, absent electric cars, and let's not 0:15:02.200 --> 0:15:05.540 even get started on data centers, we need to mine 0:15:05.700 --> 0:15:07.739 that same amount of copper that we mined in the 0:15:07.780 --> 0:15:12.979 last 10,000 years in the next 18 years. And those 0:15:13.020 --> 0:15:14.880 of us that are in the industry don't see that 0:15:14.920 --> 0:15:19.680 as being possible because, as you know, there's the old adage, 0:15:19.720 --> 0:15:22.140 what is 50,000 lawyers at the bottom of the sea? 0:15:22.780 --> 0:15:26.200 And the answer is a good start. Nobody has built 0:15:26.280 --> 0:15:29.520 anything near anybody in the United States as we have 0:15:29.580 --> 0:15:33.180 deindustrialized our country. We haven't built a copper smelter or 0:15:33.250 --> 0:15:36.930 nuclear power plants in this country, nor high-speed trains. I 0:15:36.970 --> 0:15:40.430 think we've been trying to build high-speed trains between Los 0:15:40.530 --> 0:15:43.940 Angeles and and San Francisco for 30 years. But the 0:15:43.980 --> 0:15:47.960 Chinese can build everything. They can build oil refineries, nuclear 0:15:47.980 --> 0:15:52.740 power plants, and high-speed rail. But we outsourced all that. 0:15:53.160 --> 0:15:56.270 In the last decade, when you went to Walmart, everything 0:15:56.330 --> 0:15:59.750 you saw said, made in China. In fact, one of 0:15:59.790 --> 0:16:02.450 the best restaurants in Beijing, in the Grand Hyatt Hotel, 0:16:03.030 --> 0:16:05.530 took that as a label. It was called Made in China. 0:16:05.590 --> 0:16:09.470 It was a great Chinese restaurant. But now we're waking 0:16:09.510 --> 0:16:13.220 up to the fact that we've deindustrialized our country and 0:16:13.270 --> 0:16:16.120 we need copper metal if you believe in greening the 0:16:16.140 --> 0:16:20.600 world economy. If you want electric cars, air conditioners, microwave ovens, 0:16:21.060 --> 0:16:24.500 we need copper metal. It's very copper intensive. We also 0:16:24.560 --> 0:16:28.660 need copper in sophisticated armaments and in those kinds of 0:16:28.700 --> 0:16:33.800 missiles like Patriots that are interceptors against weaponry that is 0:16:33.840 --> 0:16:37.130 suddenly being used against civilians in conflict. that we haven't 0:16:37.170 --> 0:16:39.880 seen since World War II. And this is at a 0:16:39.960 --> 0:16:42.980 time that most of the great copper mines in Latin 0:16:43.020 --> 0:16:47.680 America are little old ladies laying in bed waiting to die. 0:16:47.700 --> 0:16:50.620 And this is something I need to explain to you guys. 0:16:51.680 --> 0:16:55.080 So what started all this was originally the biggest producer 0:16:55.120 --> 0:16:57.979 of copper in the world was the Democratic Republic of 0:16:58.000 --> 0:17:01.440 the Congo. It used to belong to King Leopold of Belgium. 0:17:01.860 --> 0:17:05.110 He owned the people, the elephants, the ivory. And they 0:17:05.130 --> 0:17:09.290 mined copper there for centuries. But around the turn of 0:17:09.330 --> 0:17:13.860 the century, America dug the Panama Canal with big steam shovels. 0:17:13.880 --> 0:17:17.140 A lot of people died of malaria digging that canal. 0:17:17.520 --> 0:17:19.960 But when the canal was finished, there were these giant 0:17:20.359 --> 0:17:24.900 steam shovels that were left over. And the Guggenheim family, 0:17:24.940 --> 0:17:26.730 who were in the rag trade here in New York, 0:17:26.810 --> 0:17:29.770 bought those shovels for pennies on the dollar and took 0:17:29.790 --> 0:17:32.710 them down to Chile and to use them to start 0:17:32.750 --> 0:17:35.149 digging for copper metal, because we were getting into the 0:17:35.210 --> 0:17:41.080 first industrial revolution, 1910, 1920, President Polk, and they went 0:17:41.119 --> 0:17:43.879 to a place called Chuqui, Camada, in Chile, and the 0:17:43.900 --> 0:17:47.260 grade of the copper was 3%. They took those old 0:17:47.320 --> 0:17:51.260 steam shovels, and their company was called Asarco, which was 0:17:51.340 --> 0:17:55.210 affectionately known as the American Smelting and Robbing Company. And 0:17:55.250 --> 0:17:57.790 the Guggenheim family made so much money, they left the 0:17:58.210 --> 0:18:01.810 Solomon R. Guggenheim Company Museum of Modern Art here in 0:18:01.830 --> 0:18:06.820 New York on Fifth Avenue, designed by Frank Lloyd Wright. Now, 0:18:07.080 --> 0:18:09.680 there were two other great American mining companies that rose 0:18:09.760 --> 0:18:13.540 out of our industrial renaissance. There was Anaconda and Kennecott, 0:18:14.040 --> 0:18:18.940 but all of them were nationalized by a leftist president 0:18:19.000 --> 0:18:23.489 in Chile named Allende. Allende took them away, took them 0:18:23.510 --> 0:18:27.650 for the Chilean state, and America responded by killing him. 0:18:27.869 --> 0:18:32.409 The United States CIA, murdered Allende, and he was replaced 0:18:32.470 --> 0:18:38.609 by a right-wing general named Pinochet. And Pinochet said, I 0:18:38.670 --> 0:18:40.750 need these copper mines. He didn't give them back to 0:18:40.770 --> 0:18:43.710 the United States. In fact, he kept them. They're called 0:18:43.750 --> 0:18:47.730 Codelco today. And he said, 10% of the copper produced 0:18:47.770 --> 0:18:50.929 will come off the top to finance the Chilean army. 0:18:51.430 --> 0:18:54.130 And that was sort of the beginning of the wave 0:18:54.250 --> 0:18:59.129 of nationalization of resources in And Aramco was originally found 0:18:59.170 --> 0:19:03.390 by an American oil company, and then Saudi Arabia took 0:19:03.430 --> 0:19:06.100 the oil back. And today, most of the oil in 0:19:06.140 --> 0:19:11.159 the world belongs to sovereign oil companies. And America was 0:19:11.260 --> 0:19:16.660 left without a great copper champion. And when I was younger, during, say, 0:19:16.700 --> 0:19:22.970 the Clinton era, we started embracing China. I was very 0:19:23.050 --> 0:19:24.990 early into China. I first went into China in the 0:19:25.030 --> 0:19:29.190 early 1980s. George Shultz introduced me to China. I was, 0:19:29.250 --> 0:19:32.590 in fact, the first American to go mining in China, 0:19:33.070 --> 0:19:38.390 in Western China, in Xinjiang. And I watched the incredible 0:19:38.490 --> 0:19:42.130 rise of the Chinese people. No one has uplifted their 0:19:42.190 --> 0:19:46.190 economy that far that fast in human history. And we 0:19:46.270 --> 0:19:50.320 thought by bringing China into the WTO, we were going 0:19:50.380 --> 0:19:53.179 to turn the Chinese into Americans. We thought all the 0:19:53.240 --> 0:19:57.300 girls wanted Manolo Blahnik shoes and Birkin bags. All the 0:19:57.340 --> 0:20:01.379 guys wanted Porsches. And they did an incredible job of 0:20:01.560 --> 0:20:07.399 uplifting their society. But things haven't worked out exactly right. 0:20:08.180 --> 0:20:14.119 as we thought, between our respective societies. Now, most of 0:20:14.160 --> 0:20:18.459 the mining fell to junior mining companies listed in Australia 0:20:18.550 --> 0:20:22.530 or Canada for decades. These companies were registered in Canada, 0:20:22.550 --> 0:20:27.149 like ships are registered in Liberia. Legislation was friendlier up 0:20:27.170 --> 0:20:30.760 there for the risks with mining. Thousands of these little 0:20:30.820 --> 0:20:33.780 juniors would go around looking for mining, and the big 0:20:33.859 --> 0:20:36.640 mining companies became more and more brain-dead. They became like 0:20:37.450 --> 0:20:42.859 giant donut-shaped law firms with mediocre operating companies in the middle. 0:20:43.600 --> 0:20:46.640 For example, Exxon doesn't really drill for oil today. It's 0:20:46.680 --> 0:20:49.780 a big law firm, but they hire people like Schlumberger 0:20:50.700 --> 0:20:53.100 or Baker Hughes to do their work, and they just 0:20:53.140 --> 0:20:57.510 sort of move on. And if you look at the 0:20:57.570 --> 0:21:00.290 food chain, when I was young, I grew up in 0:21:00.310 --> 0:21:03.950 the 1950s, the United States government made a little pyramid, 0:21:03.970 --> 0:21:06.140 a food pyramid for us, and it said, You're supposed 0:21:06.180 --> 0:21:08.840 to drink four glasses of cow's milk every day and 0:21:09.420 --> 0:21:11.830 a certain amount of milk and cheese and eggs and ham. 0:21:12.350 --> 0:21:15.710 And at the top of that food pyramid was steak, meat. 0:21:16.190 --> 0:21:18.189 And when I was in school, you know, we were 0:21:18.210 --> 0:21:20.689 given that food pyramid. And when I was a kid, 0:21:21.590 --> 0:21:24.330 you know, I'm remembering this vividly. At the age of eight, 0:21:24.790 --> 0:21:27.489 they made us get under the desk to practice for 0:21:27.530 --> 0:21:29.859 nuclear war and the event of a nuclear bomb. And 0:21:29.910 --> 0:21:32.780 I was the kid that told my teacher, this is crazy. 0:21:32.800 --> 0:21:35.710 We're all going to get vaporized. If there's a nuclear war, 0:21:35.850 --> 0:21:38.870 it's always a rebel, always sort of getting in trouble. Now, 0:21:40.030 --> 0:21:42.580 nobody that I know of in California eats out of 0:21:42.619 --> 0:21:48.300 that food pyramid anymore. People go to Erewhon, and there 0:21:48.320 --> 0:21:52.140 are maybe wheatgrass juice and sunlight and some Pilates, but 0:21:52.220 --> 0:21:55.139 there's nobody eating that stuff anymore. But I want you 0:21:55.160 --> 0:21:58.649 to know the Pentagon also had a food pyramid, and 0:21:58.690 --> 0:22:03.030 they got that all wrong. And what modern warfare requires 0:22:03.109 --> 0:22:05.070 is none of the stuff in that food pyramid. And 0:22:05.109 --> 0:22:08.310 so now I get to get on odd lots and 0:22:08.369 --> 0:22:11.010 try to explain the magic of mining to you guys. 0:22:11.430 --> 0:22:13.090 Amazing. Amazing. 0:22:13.350 --> 0:22:15.930 You know, just again, not to keep belaboring the point 0:22:16.060 --> 0:22:18.440 as hippies, but as someone who grew up in the 0:22:18.500 --> 0:22:21.600 presence of a lot of wheatgrass, once again, it feels 0:22:21.640 --> 0:22:24.199 like history comes back. And I was well prepared for 0:22:24.240 --> 0:22:24.660 this moment. 0:22:24.940 --> 0:22:25.139 All right. 0:22:25.200 --> 0:22:28.520