Copper kills bugs but enlivens Friedland's metals message
One of the reasons Robert Friedland, chairman of Ivanhoe Mines, is considered one of the best presenters in the mining sector is that he brings the subject alive by looking at what's going on in the world in terms of technology and tells you what it means for metals. So it was that the annual Mines & Money Hong Kong conference was enlivened with another tour de force from him yesterday as he looked at the metals required by trends such as urbanisation along with current and future technologies.
With 60 per cent of urban pollution coming from motor vehicles, this is one of the pressures driving the "electric" revolution for cars which will see cars powered either by electricity, or hybrid petrol-electric cars, or by hydrogen fuel cells. "As they get cleaner they are going to need more platinum and palladium," says Friedland.
China is producing 18 million cars a year, and the current 10-year plan envisages annual production of 60 million cars. If 10 per cent of these cars have hydrogen fuel cells, using one ounce of platinum per tonne of car, "that will exceed the world's current platinum production".
Fuel cells are not only being used in cars. Japan has announced that 10 per cent of houses are to be equipped with fuel cells the size of a small refrigerator providing the entire home's heat and electricity needs. There is a 59,000-kilowatt hydrogen fuel cell station in Seoul that can power 59,000 homes. And later this year you will be able to recharge your mobile phones with a hydrogen fuel cell recharger - Kraftwerk - that runs on lighter fuel. Then there's the huge amounts of copper that will be required by the high-speed trains being rolled out by China and Japan. Also, while older cars use about 40 pounds of copper, hi-tech models are even more copper-intensive - the latest Lexus has some 62 electric motors.
The UN, Friedland reminds us, has set a target that by 2030 everyone should have access to electricity. This means linking up the 20 per cent of the world's population that doesn't have electricity. By 2035 the world's electrical capacity is expected to increase by 70 per cent. Friedland tells us that a new antibiotic has not been created in 37 years, which is why we are prone to the ravages of superbugs. Apparently copper surfaces will kill bugs because copper disrupts the electrical nature of the cell membrane and prevents these bugs from multiplying. "Silver has the same effect, which is why the rich ate off silverware," Friedland informs us. So as a result, the US military and WHO recommend that all hospital surfaces that currently use stainless steel be replaced by copper. How is this huge demand for copper and the platinum group of metals to be met? This brings us to the next part of Friedman's presentation which discusses Ivanhoe's three huge projects in Africa which just happen to produce copper, zinc, and the platinum group of metals.
To the Asia Mining Club dinner on Monday night where Fortescue Metals' chief executive Nev Power discussed the iron market with Tim Goldsmith who is a partner with PwC Australia. "So what went wrong? Nobody saw this happening a year ago," asked Goldsmith, referring to the collapse in the iron ore price. Power replied that there had been overinvestment and overproduction by some players who were also low-cost producers, with the idea of knocking rivals out of the market, leaving them free to ramp up the price. But that hadn't happened. Marginal players that entered the market five years ago while the big players were struggling to meet demand were not forced out when supply increased. However, he said restructuring was beginning to happen.
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