Copper grades have fallen from 2% to 0.4%, while AI's power demand goes to infinity
Global copper grades keep sliding and new mines take 35 years to permit, while an AI search uses 30 times the power of a normal one — supply is shrinking, demand is exploding, and copper is becoming the new oil.
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The next 18 years must dig up all the copper of the past 10,000
Friedland offers an arithmetic that makes you squirm: humanity has mined 700 million metric tons of copper in all of history, and to recover all of it you would have to dismantle the US and Europe back to the mammoth age to get back roughly 700 million tons. But at the current pace of the global economy, just sustaining 3% GDP growth — not even counting EVs and data centers — means the next 18 years must dig up the same amount of copper as the past 10,000 years. And people in the industry broadly think that's impossible, because the US has deindustrialized, and hasn't built a single copper smelter or nuclear plant since.
— Robert FriedlandThe world's largest copper mine's grade is falling off a cliff
Friedland dissects Escondida: when this, the world's largest copper mine, was discovered a generation ago, its grade was close to 2%; today it has fallen to 0.8%, and within two years it will drop to 0.4%. Falling grade means crushing and grinding more rock to extract less metal, and crushing and grinding accounts for 4% to 5% of global energy consumption. The mine sits at 12,000 feet in the Andes, in the Atacama Desert where it hasn't rained in 30,000 years, and it takes two cubic meters of water to crush one cubic meter of rock. They built a $4 billion desalination plant and spend $1 million a day on electricity pumping water from sea level up to 12,000 feet. The upshot: just keeping this one mine producing requires another $10 to $12 billion of investment.
— Robert FriedlandAn AI search uses 30 times the power of a normal search
Friedland gives a concrete energy comparison: one Google search consumes the electricity to light a 100-watt bulb for 12 seconds, while one AI search — he uses ChatGPT4 and Cloud — uses 30 times that, equivalent to lighting a 100-watt bulb for two or three minutes. Every five-year-old in the world with an iPad is using AI search, and power demand ‘literally goes to infinity’. He also points out: nothing about the internet is inherently green, and this studio itself is copper-intensive and energy-intensive.
— Robert FriedlandSulfuric acid prices rose more than sixfold in eight months
About 25% of the world's copper needs sulfuric acid for leaching and extraction, and sulfuric acid comes mainly from Middle Eastern natural gas. After the Strait of Hormuz closed, sulfuric acid prices went from $150 a ton to over $1,000 a ton in eight months. Russia and China have already banned sulfuric acid exports. Friedland's company benefits, because it built Africa's largest copper smelter where sulfuric acid is a byproduct — they sell the acid to fellow copper miners in Congo, at ever higher prices. But he warns: without more sulfuric acid, global food prices will rise too, because sulfuric acid is also used to make fertilizer.
— Robert FriedlandBuying one large motor means waiting eight years
Friedland tells a supply chain story absurd in its specificity: building the Oyu Tolgoi copper-gold mine in Mongolia's Gobi, they needed large motors about 40 feet in diameter, and just the ring gear took four and a half years to arrive. Today the same equipment takes eight to ten years, ‘if ever’. And hyperscalers trying to buy natural gas turbines face lead times of six to eight years. An even more extreme example: a Congo copper mine flooded by an earthquake needed pumps to drain it, pumps moving 1,300 liters per second with a head three times the height of the Eiffel Tower. They called the US and Germany, and neither could build them, because they couldn't get samarium-cobalt magnets. Only China could build them within 30 days. At the time, the flooding was costing $15 million a day in lost revenue.
— Robert FriedlandUS miners earn $100 an hour; Congo engineers earn $800 a month
Friedland directly compares cost structures: Congo copper grades run 3% to 6%, the median age is 18.7, and a Congo software engineer who knows AI earns $800 to $1,000 a month. Mining copper in the US, by contrast, means the United Steelworkers demand over $100 an hour for underground work, plus environmental legislation and legal constraints, making costs far higher. He also criticizes the net present value model invented by the financial system: it was designed for oil and gas, but mines can't be shoehorned into it — an oil field decays fast if you don't invest, whereas a mine with 100 years of reserves won't deplete like an oil field. The NPV model suppresses mining company valuations, and today mining companies' total market cap is under 1% of the S&P 500, the lowest ever.
— Robert FriedlandTariffs could keep US copper mining alive, but would stoke inflation
Asked about copper tariffs, Friedland says explicitly that he won't take a position, but he can argue both sides: if copper is $6 and you add a 30% tariff, that's $1.8, taking copper to $7.8, and he could afford to pay American miners, making US mining viable. But the other side is domestic inflation, possibly higher interest rates, and with midterms coming, it's a political question. He boils it down to: do you actually want to reindustrialize America? If you can't even build nuclear plants and ships, you lose sovereignty. Last year the US built about 8 ships; China built 1,000.
— Robert FriedlandGovernments are quietly stockpiling copper, and nobody can tally supply and demand
Friedland raises an overlooked phenomenon: governments are buying copper as a proxy for money, and not reporting it. He says nobody can calculate the supply-demand balance for any metal, because ‘why would you’. Meanwhile China is buying gold and selling US Treasuries, and a great debasement trade is beginning. Hedge funds borrow yen and depend on the yen weakening so they never have to pay it back. He thinks we're at an inflection point, where everything is becoming naked and globally scrutinizable.
— Robert FriedlandIn their own words · checked verbatim
at the rate of current global economic growth with 8 billion people on this planet, to maintain 3% GDP growth, absent the electrification of the world economy, absent electric cars, and let's not even get started on data centers, we need to mine that same amount of copper that we mined in the last 10,000 years in the next 18 years.
Robert Friedland14:30
about 4% to 5% of all the energy produced on planet Earth is utilized in the crushing and grinding of rock, which is a huge number when we're worried about the generation of global warming gas.
Robert Friedland23:52
when you do an AI search, and I use ChatGPT4, and we're using Cloud, and you do an AI search, you're using 30 times more electrical energy.
Robert Friedland27:54
We cannot, as an industry, find and responsibly mine the copper that we need for an energy transition with yesterday's technology.
Robert Friedland34:01
it was a four and a half year wait to get the ring gear. In other words, you order the motor, four and a half years later, Siemens or ABB could build it. Today it'd be an eight or 10 year wait, if ever.
Robert Friedland52:27
today, mining companies in the aggregate only have the value of less than 1% of the S & P 500, which is an all-time low for mining.
Robert Friedland59:36
What's happening is that governments are buying copper metal as a proxy on money. And they're not reporting it. And nobody can calculate the supply-demand balance on any of these metals because why would you?
Robert Friedland1:04:42
Figures
| Copper price | reached about $14,875/ton earlier this week | 1:04 |
| Cumulative copper mined in human history | 700 million metric tons | 14:30 |
| Escondida copper mine grade change | from close to 2% down to 0.8%, and to 0.4% within two years | 22:51 |
| Crushing and grinding share of global energy | 4% to 5% | 23:52 |
| AI search power consumption comparison | 30 times that of a normal Google search | 27:54 |
| Sulfuric acid price change | from $150/ton to over $1,000/ton in eight months | 34:01 |
| Total investment in the Oyu Tolgoi copper-gold mine | about $20 billion | 51:25 |
| Daily loss from the flooded Congo copper mine | about $15 million/day | 52:27 |
| United Steelworkers' hourly wage demand for underground work | over $100/hour | 58:35 |
| Annual shipbuilding comparison, US vs China | about 8 ships in the US, about 1,000 in China | 1:02:39 |
Glossary
- NPV model
- A method of valuing an asset by discounting its future cash flows; Friedland argues that applying it to mines systematically suppresses mining company valuations.
- heap leach
- An extraction process that piles up ore and sprays it with a chemical solution (such as sulfuric acid) to dissolve the copper out for recovery.
- tailings dam
- An embankment holding the waste residue after ore processing; a failure can cause severe environmental and safety disasters.
- solid oxide fuel cell
- A high-efficiency power generation device that Bloom Energy uses to provide uninterruptible power to data centers, and which requires the metal scandium.
How to listen
Investors and founders watching commodities, the energy transition and AI infrastructure; engineers who want to understand copper's structural supply-demand gap and supply chain bottlenecks.
The first ~5 minutes of Steve Jobs anecdotes and hippie reminiscences, unrelated to the copper supply-demand analysis.