There’s no better barometer of economic health than Copper.
This is where it gets the nickname, Doctor Copper.
Just over a year ago our models and data were flashing major warning signs in the market, with Copper the main focus.
We took those warnings seriously and cautioned readers.
What happened next with the pandemic shutdown rocked the global copper trade, tested supply chains, and shut down major mines.
But that was then, and this is now.
Copper Critical
Copper is an element used in everything around you.
The most obvious uses are for plumbing in houses and factories. And since copper is also a wonderful conductor of electricity, it’s used in power lines, electric motors, wiring, cars, and appliances.
Copper’s excellent electrical conductivity – makes it a critical part of the Electric Vehicle (EV) revolution as well.
Electric vehicles require three times more copper than conventional internal combustion engine vehicles.
On average, a car with an internal combustion engine uses 55 pounds of copper.
A hybrid uses about 110 pounds, and an EV uses 165 pounds of copper.
In addition, each EV charging station also consumes about 44 pounds of copper. And millions of charging stations will need to be built to create an infrastructure that can actually support the EV revolution.
Some basic math shows that the coming electric car boom will create a super boom in copper demand.
Legendary mining financier Robert Friedland says the price of copper will be so high in the future that “you’ll need a telescope to see it”.
If he’s right, shareholders in the right copper stocks stand to make a fortune.
But is Robert right with his forecast?
Or… is mining giant Glencore right?
Or am I right?
If you’re not familiar with Robert Friedland, you should be.
He’s one of the world’s richest, most successful mining entrepreneurs. His first mega-mining score was Voisey Bay.
Friedland’s team discovered Voisey’s Bay, a world-class nickel deposit. The discovery made Diamond Fields’ shares go from $0.25 per share to over $160 per share, a more than 63,000% gain.
This single deal made Friedland a billionaire at a young age.
These days, Friedland is looking to make his next big score with “Ivanhoe Mines 2.0,” his mining company that owns three world-class projects with a heavy emphasis on copper.
Friedland is an incredible salesman and presenter. In recent years, he has wowed audiences with copper dust and claims that the price of copper will skyrocket over the next decade.
Copper’s Electric Vehicle Demand Push
A big driver of this copper bull market, says Friedland, will be EVs.
By now, you should be aware that I believe EVs are very bullish for long-term copper consumption.
Thanks to incredible advances in technology, massive investments by large carmakers, and huge government support, electric vehicles are now starting to go mainstream. Tesla’s are everywhere.
But just how much further will EV adoption go?
And exactly how much copper will those EVs consume?
Below is a chart we’ve put together for you compiling a lot of different data sets and forecasts.
It shows how much copper the EV market will need each year based on the assumptions made by Friedland, mining giants BHP and Glencore, and Katusa Research.
You’ll note that my forecast is very similar to Glencore’s and I’m glad to see this.
Glencore is one of the smartest natural resource companies in the world. Its managers are smart and tough, and they have a lot of skin in the game.
The coming demand surge will be mind-boggling According to Glencore CEO, Ivan Glasberg…
“We will have to produce an extra 1 million tonnes of copper per annum going forward from 2021 to 2050”.
Make no mistake, producing this much additional copper will be a challenge for the mining industry which only increased its production volume by 500,000 tonnes per year from 2010 to 2019.
I’m not here to sell you a copper company. Although I have a lot of experience in building a copper mine as I’m one of the original founders of Canada’s third-largest producing copper mine. I’m here to just share the data. The numbers. The facts.
I’m just showing you what the numbers tell me.
Granted, I always like to be conservative in my forecasts to give me and my readers a margin of safety. But here’s the point: Even if my conservative forecast is the one that’s correct, copper is going much higher over the long term.
I’m forecasting that in just 5 years, EVs will consume 1.9 billion pounds of copper per year.
This demand is greater than two-thirds of the annual production of Escondida, the world’s largest and most productive copper mine.
While the world was focused on the Bitcoin price explosion to new heights…
Commodities were quietly ripening…
Copper Stock Rocket
The price of copper jumped back above the $4 mark for the first time in almost 10 years.
Copper extended its surge to a decade-long high as Goldman Sachs warned of a historic shortage…
“The market now on the cusp of the tightest phase in what we expect to be the largest deficit in a decade.”
Here’s why investors should care…
While news headlines and social media have been closely covering every thousand dollar move in Bitcoin, resource investors were enjoying even larger returns in select copper mining stocks.
As the chart above shows, even though copper itself barely doubled from its pandemic low last March, the COPX Global Copper Miners ETF more than quadrupled, delivering returns in excess of 300%.
And that was just for a basket of senior copper mining companies…
Katusa Resource Opportunities subscribers had the opportunity to see 1,354% gains over their cost basis on a junior copper stock.
Many copper companies are seeing triple-digit and even 1,000% returns.
If the copper price continues climbing…
And the demand for copper keeps rising…
The share prices of some of these stocks could rise much further yet…
Just like when I made the call on Northern Dynasty back in 2016.
Back then, copper prices had just come off a decade-long low and were barely staying afloat above $2.00.
But just mere months after I recommended the company to readers of my research service, the stock soared over 700% as copper recovered past the $2.50 level.
Long-time readers know that I don’t chase stocks. I stalk them like an alligator and wait for prices to come to what I’m willing to pay.
If it means I end up standing on the sidelines, then so be it.
There are always new opportunities, and I’m cashed up and ready to take advantage.
But there are several ways to prepare for “alligator time”. You have to be prepared, and not get too complacent with rocket and moon memes.
Copper Crunch – A Lack of Big Discoveries
In addition to falling grades and rising costs, the copper industry simply isn’t finding as many large new deposits as it used to.
Humans have been digging into the earth in search of copper for thousands of years.
And we’ve found most of the really good stuff.
Over the last 10 years, $26.5 billion has been invested globally in the search for new copper deposits.
Despite all that money going into the sector, however, only a handful of new deposits have been discovered.
The chart below shows how large copper discoveries have declined over the past 25 years.
Now, Here’s a Cool Fact…
Katusa Research was the first to publish on a relatively unknown company that has made the world’s first major copper discovery in five years.
Even better, Katusa Research subscribers were given this stock for free as a dividend from another position that also over doubled for us.
Talk about winning!
Copper Hasn’t Reached a Peak – Not by a Long Shot…
With the scorching demand for EV’s and infrastructure spending to come, copper will continue to have a very bullish long-term outlook.
Of course, that’s not to say there won’t be some near-time shocks.
But we’re alligators – we wait patiently for the right time to strike.
And the copper sector, on the back of the next phase of the clean energy revolution, is shaping up to be very juicy prey…
If you want to see what specific sectors I’m looking at – and what stocks I’m buying – you can read all about it in one place…
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