A billionaire financier in the mining industry says the world is headed toward a “train wreck” as the demand for copper will greatly outstrip the supply if nothing changes.
This means the $250 million CK Gold Project, a gold and copper mine planned west of Cheyenne, is going to be producing for a strong market when it comes online, projected to be in the fourth quarter of 2024.
Accelerated Demand
Robert Friedland told Bloomberg TV recently that “accelerated demand” for copper is exceeding the mining industry’s ability to keep up with it. Deposits are getting more expensive and harder to find, he said, and financing for projects is becoming more scarce.
As a result, Friedland said, “we’re heading for a train wreck.”
He estimated it’s possible that copper prices might rise tenfold as a result.
Kevin Francis, vice president of exploration and technical services with U.S. Gold Corp, the company behind the CK Gold Project, told Cowboy State Daily that Friedland made his billions by finding and developing some of the largest mining deposits on the planet.
“So, I’m not here to question Robert’s [Friedland] positions. I think it’s quite possible,” said Francis, who previously worked for Friedland.
Copper Is Key
According to Navigant Research, onshore wind installations require 7,766 pounds of copper per megawatt of electricity production capacity. Offshore installations need nearly three times that.
Solar power systems require 5.5 tons of copper per megawatt of capacity, according to Copper Development Association Inc.
The gas-powered car requires about 18 to 49 pounds of copper, according to the association, but electric vehicles require as much as 183 pounds of copper. Hybrid cars require even more.
Francis said that the economic development of the “green economy” depends on the industry’s ability to find new deposits of copper.
“Copper is going to be key,” he said.
The CK Gold Project is projected to produce 248 million pounds of copper and 62,500 pounds of gold, Frances said.
At today’s prices, the copper is only about 20% of the estimated value of the mine’s production, he said.
Financing
U.S. Gold Corp still has to raise the funding to construct the mine. Francis said that there are “enthusiastic” investors looking at the project.
“We and they see it as a transformative event. It’s a milestone,” Francis said.
Before the company starts seriously engaging financial institutions, Francis said they wanted to be sure there is a clear path to receiving the needed permits for it.
There are a lot of various permits before the mine can begin construction, but there are two main ones — the mine operating permit and the industrial siting permit.
The project is being entirely conducted on state and private land, so both permits that it requires will come from the Wyoming Department of Environmental Quality.
The company went through the industrial siting process, which required hearings and public meetings, and the DEQ awarded the company its industrial siting permit June 20.
On the mine operation permit, U.S. Gold Corp is exchanging questions and comments on the technical aspects of the planned operation.
Francis said the company expects that process to be completed by the middle of next year.
If all goes as planned, construction will begin in late 2024.
Domestic Supply
Chile, Peru, the Democratic Republic of Congo and China have historically been the leaders in copper production, followed by the U.S.
Francis said a domestic supply of copper would create a lot of stability for copper supply chains. Political environments in source countries could cut off the U.S. at any moment.
“Developing assets in the United States is by far perhaps preferred from an economic security standpoint,” Francis said.
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