Ivanhoe’s Friedland hits out at ‘fiction’ that mining copper in Chile is safer than Congo
Robert Friedland, executive chairman, Ivanhoe Mines
Friedland, whose company Ivanhoe Mines is developing major new copper and zinc mines in the Democratic Republic of Congo (DRC), said at the Mining Indaba last week: “It’s absolutely silly to think that Chile is a safe place to mine and should have a three or four per cent discount rate and, somehow, the DRC should have a 12% discount rate.
“There’s this fiction that somehow Africa is dangerous and it’s safe for industry to go to Chile or Peru. I challenge that. I would rather be in Africa – in the DRC – which was the world’s largest producer of copper until Chile got invented in the 1970’s.”
Friedland said not enough copper was being discovered to meet future demand and commented: “… at a minimum we will have a six million ton a year deficit in the next decade and the copper price will perform exactly the same as the palladium price as the world electrifies”.
“The great copper mines in Chile are like little old ladies laying in bed waiting to die. The biggest copper mine in the world (Escondida) – which belongs to Rio Tinto and BHP – had an average resource grade of 1.72% only 12 years ago and today the remaining resource grade is 0.52%.
“How do you overcome that? You make it bigger. You put in bigger mills; you increase the capacity; you grind more and more rock; you use more and more energy per unit of copper produced and you make bigger and bigger tailings dams. “That’s not green. Is this truly sustainable? Maybe it’s a better idea to go find copper in the Congo?,” Friedland asked rhetorically.
The latest resource figures for Ivanhoe’s proposed Kamoa mine in the DRC showed 256 million tons of ore at a grade of 4.15% copper and a 3% cut-off grade.
“The cut-off grade is about six times the grade of the average resource at Escondida – the biggest copper mine in the world – and the cut-off grade is what we ignore and don’t even bother to process.
“The combined Kamoa-Kakula project has an indicated resource of 423 million tons at 4.68% copper at that cut-off. If we use a one percent cut-off grade – which is realistic – we have porphyry-copper like tonnages – 1.4 billion tons and the grade is still 2.7%.
“So, come to the DRC. This is an IQ test. Where is the best place to find copper in the world? What are you waiting for? Why be like a deer caught in the headlights?”
“Everybody thought Chile was a very safe place until it descended into chaos. So I believe the discount rate assigned by analysts for Chile and the Congo should be at least identical. I think there may be some implicit racism in the high discount rate applied to Congolese assets. We operated in the Congo for 25 years and never had a business interruption.
“I am here to defend the vision of the Congolese people. Our mission is to restore the Democratic Republic of the Congo’s position as the number one producer of copper metal in the world,” said Friedland.