Friedland on the West’s challenges
Observations By Tshepo Magagane
Unfortunately, China has cornered most of the global market. And Friedland, who has been connected to China since the ‘90s, says it’s about 30 years ahead of us. And for processing of some minerals, there may be no catching up, given the small and specialized quantities involved.
Friedland is building a copper mine in the Democratic Republic of Congo, with an ore body the size of Manhattan, that’s cost more than $7 billion to develop. He thinks the West needs to build two or three like that every year — for the next 20 years.
To do that, we may need new approaches to:
1. Long-term capital. It takes 20 years to find a mine and another 10 years to build. Not the stuff of hedge funds. That’s why the U.S. is pushing for a sovereign wealth fund and we may see similar pressures on pension funds and government finance organizations to step into the void.
2. Community engagement. More mines and processing facilities may be pushed forward in the national interest — but they can’t be railroaded through communities, especially Indigenous ones.
3. Diplomacy. Western countries will need to do more with their aid — and other tools — to help compete with China’s aggressive approach in Africa and Latin America.
4. End use. All these new minerals could be swallowed up by consumer goods, and the data centres that connect them, while more pressing strategic allocations may be needed, for military, security and space technologies.
5. Costs. China continues to use labour and environmental standards to keep costs down. We’ll need more innovation to bring our costs down.
6. Permitting. The last smelter to open in the U.S. was 1920. The result: the U.S. has two smelters, China has 60.
7. Procurement. Governments and their agencies, including the Pentagon, may be needed to sign off-take agreements to help secure pricing against Chinese oversupply.
