Copper price will more than double due to high demand and green technology – Rob McEwen

(Kitco News) — The price of copper, currently trading near $3.50 a pound, may rise to “$6 or $8” on the back of increased demand, said Rob McEwen, CEO of McEwen Mining.

“The world wants to convert electrical energy into energy,” McEwen said. “When you read all the forecasts of automakers increasing their electric vehicle production lines…there isn’t enough copper at the moment to meet that demand.”

BloombergNEF energy research recently found that due to trends toward decarbonization, copper demand will rise more than 50% by 2040.

However, the ability of copper mining to keep up with demand is uncertain.

“It takes longer to build copper mines today,” McEwen explained. “More permits are required, longer term limits, and the capital is going up…You’re talking about a decade.”

McEwen spoke with David Lane, presenter and producer for Kitco News, at the Precious Metals Summit in Beaver Creek, Colorado.

Copper Economics

Although copper is down 20 percent since the start of the year, its price has gone up 20 percent over the past five years. In the late 1990s, copper was trading at less than $1 a pound, more than half its current value.

“You had a rapid urbanization happening in Asia,” McQueen said, explaining the price hike. “China has been the largest consumer of all metals for the past five or six years.”

He also referred to the adoption of “renewable energy technologies” such as windmills that use “1,500 pounds of copper”. McQueen added that it is difficult to find alternatives to copper.

“Maybe someone will invent nanotechnology that has the same properties [as copper]Suggest “that’s a bit far.”



Fed policy

The Federal Reserve’s Open Market Committee meets on Wednesday to decide on a rate hike. McEwen predicted that they would raise interest rates by 75 basis points.

He added that inflation “cannot be tamed with low interest rates as it is”.

“[In the] In the late 1970s, it required interest rates of 15-18 percent to tame inflation.”

The Fed raised its key rate by 225 basis points over the year, but McEwen said there were “a lot of factors” at play.

“The amount of monetary stimulus that has occurred in the past few years and the amount of debt accumulated at all levels guarantee us higher inflation rates,” he said. “It was exacerbated by the Russian conflict in Ukraine, the coronavirus outbreak and the disruption of supply chains.”

To see McEwen’s thoughts on Bitcoin, watch the video above.

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