How will industrial demand change the next four years following Trump's ascent to the White House?We'll talk about this and the effects on industrial metals like copper with our next guest, Ian Harris, CEO of Libero Copper.
Welcome back to the show, Ian.Good to see you.You're on the show.A couple of months ago, copper had a terrible summer.It's since rebounded.Welcome back.
Yeah, things turn around in this business.I'm really happy to be sitting here and sharing thoughts today.Okay.
I'm going to flip over to my screen right now, take a look at this copper chart.So we were talking about this chart offline, you and I. Copper really did not like Trump winning the presidency, it seems.
November 6th, actually even the evening before when Trump was leading in the race. I think
remember, I don't think it was an anti-copper trade.I think it was a pro-US markets trade.Because if you looked at copper, a 4% move in copper is enormous.
That it also recovered this quickly tells you it was more people taking money out of, maybe they're leaving it somewhat safe haven and more commodities saw the election results. and wanted to get back into the action of the market.
And we see that people that really play copper obviously took advantage of it and why the bounce right back to to where it was.
So because I saw it across gold, silver, copper and other commodities, I think it was more a a bullish move for the market than necessarily.Yeah.
You're right.Gold did the exact same thing.Well, you know what happened on the 6th?The US dollar skyrocketed.It just shot up in a straight line.And so that made sense that gold fell on the dollar moving up.
I don't know if it's because copper follows gold and it's been following gold pretty much all year round.We talked about that last time. Well, not very closely, but it has been tracing gold.
But yeah, this past week in particular, they both moved down together.They both moved up together.Right here is when the dollar moved up.
Does it make sense that a Trump presidency would mean a stronger dollar relative to other currencies because of tariffs and other things, but yet less demand for metals?Does that make sense to you?
No, I really think that Donald Trump brings in a more nationalist perspective, right?And so for me overall in the sector, that could be very bullish, right?Because we have to understand the majority of copper and commodities are going to China.
They're being transformed into two products and then being sold.And then as we're looming on a potential deficit, right, the leverage that China has is greater.And I used to say it at the beginning, okay, I'll sell you some copper.
And they're like, man, I'll sell you some wire.Oh, how about an electric motor?And that next step would be, well, I'm not selling you, but the electric vehicle, right?So, and that puts significant industries at risk.
And I think that the more nationalist perspective of Donald Trump we'll start pushing back on that, which means we need new supply.And to incentivize new supplies, that could be very healthy for price.
I won't get into the gold and silver because it's a different perspective, because it's more, you know, a currency or an investment or they're going back to a gold standard, those kind of things.But from an industrial perspective,
Copper is the biggest player when it comes to what the world's economy is moving towards, and therefore supply chains become way more important, I think, under a Trump administration.
It's been reported that tariffs will be front and center for Trump's economic plans.He wants to impose up to 60 to 100% tariffs on Chinese and Mexican goods and imports.Already there's a 100% tariff on Chinese cars, by the way.
He plans to double down on that.Pharmaceutical products as well.He said, I want German car companies to become American car companies.I want them to build their plants here.
Now, does it really matter for global demand or industrial demand, which is what we're concerned about today, where the plants are located?I mean, does this have broader industrial demand implications, what he just said?
I believe it does.And I believe it does because 60% of world's copper, and it's a lot of different metals, you know, there's rare earths you could get into, etc. that because China has the refining capacity, they can go fine.
Good luck getting parts for you to build your vehicles in your plant over there, right?They really have the upper hand, which really incentivizes industry to start securing their supply chain.
And I think that is the number one biggest catalyst that's coming on board, right?And I can give some great examples, right?I really like AI because AI is a race.If we lose the electric car race, well, I will catch back up. up, right?Whatever.
Whatever takes a little bit more time, we'll catch back up, right?While politically saying, yes, energy transition, let's save the planet, et cetera, et cetera.But AI is a race.It's a race between companies and it's a race between countries, right?
We say, if AI is the biggest thing since sliced bread, then why is the chip maker worth over a trillion dollars and worth more than Apple now, right?Because it becomes the part of the supply chain that is critical.
So you have Microsoft, Google, and others literally restarting old nuclear power plants in order now to power those chips, right?So the next step is, how do I get power between the power supply and to those chips?And obviously that's copper.
So as these supply chains get stressed, then newer and more creative solutions come up.And you have people that are willing to write very big checks in order to create these solutions because for them it is a life and death struggle, right?
If you get behind in the AI race, you're done, right?You cannot catch back up, right?
So I think while it's not a good big component overall of entire power demand or of copper demand, I think it is a potent one that will be starting to grow geometrically and probably have the most force because it cannot slow down.
Let's take a look at this distribution of copper consumption chart. 2023, industrial 12%, equipment 32, construction 26, infrastructure 17, transportation 13.Which of these segments of this pie chart are expected to grow the most, do you think?
So I don't really love this chart because most of it is still copper wire, right?Because it should really be not into the sector, right?So Equipment is going to grow because EVs use more copper wire.
They use three times more copper than a traditional combustion engine, right?Maybe construction might begin to slow down.That's probably mostly driven by the industrialization or the expansion of China.
I would see transportation and infrastructure also growing for the same reasons based on the old age of infrastructure. and the more dependence on electrical vehicles in infrastructure and then industrial.
So I see a lot of these different sectors rising, but it's not because of an individual strength in a sector, but an increased usage of copper within that sector because the world's economies are becoming more and more electricity based, right?
And the transport of energy is copper, right?And that's the, it's really the elephant in the room.And when you see all these different critical metals, right?
You add them all up and you talk about the demand required copper still 95% in terms of total tonnage of needed.It is the big guy in the room.
Take a look at the copper chart once more.You and I spoke, you were on the show, I think around August, yeah, the summer time when the price was at its then local low.
In retrospect, we didn't know if it was going to be a bottom, but you happened to come on during a summer bottom.The price has since recovered a little bit since.
And if I were to, I just realized this, if I were to overlay the copper chart with the US 10-year yield, pretty close correlation year round.In fact, I think the copper price leads the 10-year yield by a little bit, but not by much.
Now, what I'm seeing here is that the 10-year yield is rising on the back of stronger economic growth expectations as well as perhaps renewed inflation expectations.This could also explain the copper price improving somewhat.
What's your explanation for why copper has gone up a little bit?Is it projecting a return to economic stability, just like how earlier in the year it was projecting basically economic recession and calamity?
Yeah, I would also say we had a very interesting conversation over the tug and pull on copper based on short term and long term expectations.And it seems that the short term pull, the expectations of the world economic health or China's
economic health, have the biggest drivers upon it today, right?I don't think that that's going to last forever, right?
There's kind of a buildup when this basic supply and demand issues start starting to raise their head as we're getting closer and closer to hitting a wall.
But based on today, yes, I think you have the world saying China is stimulating and it's not going to fail.Is it going to fizzle out?If it fizzles out, they're just going to do more, right?
I don't think that China has any interest whatsoever of letting their economy fall behind. Uh, they control it extremely well.And I also feel that Donald Trump, right, if he prides himself on one thing, it's the strength of the US economy.
And so he will do whatever it takes to keep those motors humming.And I think both of those things together are extremely bullish.
Right for for copper at least during this this this window of deficit spending starts to become a concern But it can those concerns seem to be always be able to kick the can just a little bit a little bit a little bit More down the road.
So in the near future, I think it's extremely bullish for copper.
Well, that's on that note last time you told me that The asset was signaling a global slowdown before the asset, copper in this case, five X's.So you said it could potentially go up five times.Price could go ballistic.
Is the trigger closer now that Trump is in the White House?Yeah, I don't.
know what, I don't know when that will happen.I just know it will happen, right?So, but yes, I would assume that Trump will bring some of those issues closer to the frontline, right?
Because I think the underlying issue here is a supply and demand and a control of production chains, right?So China has no interest in copper price going up.They're the
most interested in the entire planet that it doesn't go up because they don't want to incentivize new production, right?
Because they know that they're getting into a position when it goes into deficit, they're in the pole position, and that helps them control the products that they're selling to the planet, right?
And of course, they would much rather sell an electric vehicle than they would raw copper, right?It's very simple.This has been their plan for a long time. they literally have in their plan.
Well, we can't beat the United States and Japan on an internal combustion engine, so let's start now trying to be the country of electricity, right?And they've done it, right?
They understood by controlling refining capacity, they're doing all these things.So I think Trump is really going to push those.
And so that's when you go and start looking at the root causes, you're going to want to see, you're going to see a higher demand for controlling the supply chains, right?
and that incentivizes new production, it puts things more forward, it gets it on top of the plate.
The last time that copper ran, really ran, and really got back up above $4 is when the cover of the magazine says, copper's the new oil, and we don't have enough of it, and we need to incentivize it.
And so the long-term pull pulled on copper a little bit more, and we pushed past $4 for the first time in many, many, many years. And I think that dynamic comes back with Trump where you see a need to incentivize new production.
Incentivize new production, but particularly at home around North America, right?Because I'm assuming that, and correct me if I'm wrong, but I'm assuming that with trade wars,
with China ongoing, especially under the new administration, we would have to have a new supply chain that is dependable and reliable and not privy to foreign policy mishaps, which means copper mines closer to North America or America's sphere of influence.
So what is Trump's administration going to do with the mining industry is my question.
Yeah, I think you could see inklings of what it looks like with the Anti-Inflation Act, which was more stimulate production at home.
But it really picks out some critical minerals, including copper, incentivizes it to have more content nationally and with allies of the United States.So I see domestic and I also see allies of the United States.And when we look around,
you know, nearby.We're talking Canada, we're talking Mexico, and we're talking Colombia.Colombia has the same status as an ally, for example, as Japan or Australia.So
those areas where there's a strong long-term relationship, I see a lot of incentive being there and domestically, but I really also think it incentivize refining capacity, right?
That's the big one that where China truly dominates the rest of the world.
Tell us about South America and mining around Latin America and South America.To my understanding, South America hosts a very rich series of, or series of very rich copper deposits, probably more so than any other part of the world.
Surely that's going to be of strategic importance to the U.S.So tell us about that area.
Yeah, so I was just doing this recently before a completely different reason, but if we go back to the year 2000, right?Okay, let's start first, you are correct.
The Andes Copper Belt that goes from Chile, and you could say it goes all the way to Panama, right from that line are 12 of the 20 largest copper mines in the world, right?
It is that line, it's across the Andes Mountains, sometimes it tips into Argentina, you have Chile, Peru, Ecuador, Colombia, et cetera, right? Um, in the year 2000, Chile produced 35% of the world's copper.Okay.
And that was 4.5 million tons of copper per year.And Peru was number five.By 2023, just last year, Chile dropped down to 23 and then only grown for 4,500 to 4.5 million to 5 million tons of copper.
So very little growth because it's getting mature, right?It's not as easy to find news deposits, et cetera, et cetera.But Chile had grown to 12% of the world's copper supply, right?It went from 500 0.5 million to 2.5 million tons.
So as that district moves more and more north, that's why I'm more bullish.You see new production coming out of Ecuador.I helped build that mine.I started the construction of that mine.
But it goes right into Colombia, and that's why I'm very bullish on Colombia.So it's Most people are like, well, why do they produce so much copper?Why don't other countries?It's because that's what mother nature gives us.
That is where the most prolific belt in the world exists today.And that's where I would expect new production.It's not like we're going to say we're shifting from Chile to another country.
The numbers are we need to double the production of copper by 2050. That's a massive amount that has to come from new sources.So the good news is those sources are very close to home in the United States.
And so I expect to see a strengthening of those relationships and a strengthening of those supply chains.
You know what we've been seeing in the lithium industry is a lot of partnerships and JVs happening between car companies and lithium deposits.GMC recently, for example, bought up, I think, shares of Lithium America.
That whole dynamic is shifting for the lithium industry.We're seeing more vertical integration.Is copper next for similar vertical integration with either construction or the car industry?
First of all, I think it's already happening, right?We are seeing offtake or direct investment into serious projects.There's some good examples in Argentina.And I've been saying this for a long time.
When you have all the major mining companies just buying each other, that doesn't stimulate new production.So I think people are getting caught.These end users are getting caught.
And I think the same way that you saw it in lithium, you saw partnerships, people wanted to make sure that they were securing their lithium supply. Um, although I believe lithium was just a production problem, not a deposit problem, right?
And you see this same thing going on in the energy.We have an energy problem.And when companies go, when can I get more power?And the energy company goes, Oh, we'll give you a plan in two years.Now I need power in six months.
They're buying their own power plants, right? And I think that's a telltale sign that the next big obstacle, a real obstacle, is copper, right?
And that is not a problem that can be easily solved, so I expect massive amounts of investment to start securing those.Bigger than we've seen in lithium or even the power space, the numbers get very, very, very big.
I think the numbers are like we need $20 billion worth of investment in the copper space just to catch up. And I think the United States is incentivized to create that at home.
Well, here's the thing.It's going to take a while for copper deposits to come online.Building a mine takes time, many years.And yet this new surge in demand from not just electric vehicles, but also AI, like we talked about, that's today.That's now.
So, what's going to happen over the next couple of years is this deficit will realize, and the industry needs to catch up, or else what?What's going to happen if we don't?
Well, we alluded to it.I said, I don't know when the wheels are going to fall off, but the wheels are going to fall off.
Right, because we have some analysis on demand and supply curves and there's like all this chart analysis and then there's another analysis that's talking about what we need to discover more and but nobody really wanted and I even used to be in a like a think tank on copper.
And I remember, I remember beating the drum saying, you do know that it takes 20 years, like, ah, we got a supply chain for the next three years, we're okay.
The windows that people see are different, and we see people looking on the exploration side, on the supply side, we have people looking at the demand. And, but nobody's saying this gap, and I agree with you, it's a big problem, right?
And what I think it means, and here's another one, it was, so a director of mine is Ernie Mass, and I was involved in the startup of Mirador, and he did the same thing, and Cobra Panama, they're two of the 20 largest copper mines built in the last 20 years.
And then all of a sudden, it dawned on us, well, how many, Copper mines of this size have been built in the last 20 years and we, you know, could name off three and we assume there might be a fourth one, right?
There isn't the experience doing it either, right?So we have in mining, in mining, right, we have value in discovery, we have value in production, and there's also value in taking projects and getting them towards construction, right?
We call it the Coulisson curve.But there's a lot of projects that are stuck in that lull in the bottom of post-resource.The excitement has gone from the discovery and they can't keep on getting traction and moving forward.
So I think those types of projects are going to be extremely valuable moving forward.It's why I like our project so much in Mocoa and Columbia because of size and scale.But I do think it's why I said,
when the wheels fall off, it's going to be a problem that cannot be solved quickly.Because I mentioned lithium prices eventually dropped because it wasn't a deposit, but there's plenty of lithium deposits.
It wasn't, they weren't getting into production.Right.Um, and that problem is not as easy to solve on the copper side.
On that note, let's talk about your experiences with the Mirador mine in Ecuador.
So tell us about the main key lessons you learned working in Ecuador, what you learned about Latin America and mining in that region, what you learned about copper mines in that region, and how you're applying those lessons to Libero today.
So I'm going to start.I'm a mining engineer. Um, I've worked in the industry 35 years of 20, almost 25 years of experience in South America and 15 of those living, right?
But Mirador was the first real, well, I was in Venezuela before that for six years, but, um, that was a, that was an operating mine.This was a copper mine in, in, in Ecuador.It was post resource.And I went in as a mining engineer, right?
A standard engineering nerd, like it's the best way I can, very square.And I'm sorry to all the other engineers listening to this program, but you know how we can, but B, we see everything as a problem and we provide solutions.
And I left, you know, we went through a new president, a new constitution, a new mining law, a suspension of all mining in the country.I called it an emotional rollercoaster.And I learned the things that actually got the job done.
And it was more your strength locally, the relationships you have locally, your reputation nationally.And those two items drive political will. right?
Because if we overly simplified it, politicians do things that think that they can get votes, and they normally have a short-term vision about it, right?So those underlying staples are the things that you really need to be working on.
Like, we can figure out the technical issues, but you have to, and I hate ESG, I'm going to say it right from the beginning, because, not because of the concept of ESG, but it's a top-down approach, right?
It's like we are going to do policies and procedures, but it really is about doing the job on the ground, working and developing those relationships.It's why I live in Colombia, because I think it's so important.
It's why I'm fluent in Spanish, because that really takes leadership to focus on those issues. And so that's what I really learned in Mirador, and it was through a lot of mistakes.
So when the opportunity of Makoa, which is in the same Jurassic part, it's called the Jurassic Porphyry Belt, which is part of that Andean Copper Belt that I discussed.
opportunity came up, I said, here's a chance to redo without making the same mistakes, right?Starting with a clean slate and starting a company or project with all those lessons learned, right?
To how to get projects of this size and scale advancing in a country like Colombia.So, Makoa, many people said, you can't do it.It's a great deposit.It's wonderful.It's a very big deposit, but you know, it's not doable.
And then I remembered just chatting with Ernie Mass that it's because very few people have done it.And so we were very confident in ourselves.
And that's why we're so excited today that after basically a two-year process, we're now advancing and drilling and advancing that project.
It's post-resource and it's getting into that development stage and hopefully fits nicely into when the wheels fall off type scenario.
Yeah, there's an ongoing 14,000 meter exploration program, and there's a new drill result that just came in.So tell us about this expansion project, or this phase rather, and the growth that you're expecting from this new result.
OK, so we haven't put out drill results yet.We have started the first hole of this program.That 14,000 meters is about 50% more drilling ever on the project.And really, the number one goal is to demonstrate size and scale.
I don't want to get in it too technically, Projects can only be so big really when they start, but you want to see a big potential for expansion, so to have your cake and eat it too.
So we want to be able to demonstrate that it has that additional scale.It's already a big project, but we want to
uh broadened it out a little bit and that's the objective of this uh this uh drill season and adding 50% more drilling test some additional targets that are on the property to really say it's already a big project it's almost got 600 million tons of resource with over 4.8
6 billion pounds of copper.It's a big project, right?But we need it to be very bigger because the numbers of copper we need people want as big as possible.
And so that is the objectives and we expect news before the end of the year on initial results on the project. and then in a consistent news flow.
And for those that don't know the mining industry, those numbers that come off of drilling really are what drive, it's a big catalyst for creation of value.
So we're right at that beginning of the bottom of that Lassonde curve and getting our way back up in value creation and lots of big expectations.
And I think it's important to add, we also have the sponsorship now and belong to the Fiori Group, which is was Frank Giustra, one of the most renowned mind financiers in the world, and famous for his timing.And this is his first copper vehicle.
And I don't think it's for silly reasons, right?I know he knows what he's doing, and he is also now a big copper believer.
Well, wait a minute.So we spoke in August, and this is the price chart since basically August.The last three months, the price of your stock, Libero Copper and Gold Core, is up 74%.Copper is up 11%.So we know copper is up from the summer lows.
We talked about that.But what happened to this outperformance here?Obviously, gold and copper stocks, mining stocks in general, have a higher beta to the underlying metal.But this is a significant outperformance.
Any specific company news that we should be aware of that happened since the summertime?
And for those going, oh, no, I already missed it.I can tell you that the position that Libero is today and the objectives and the value creation that we're going to be creating over time, there are still lots of room.
Many people don't remember what it was like in 2007 and seeing companies grow thousands of percent in a single year.Right.And this is really bad on the back of Remember I said it took two years to get to this point.
We announced that we were mobilizing.We announced that we started drilling.We just announced yesterday that what the objectives of this 14,000 meter drilling program And I really think it's just getting more and more attention.
And then we can go back, go back just a little bit to give an idea of what can happen.
You know, the bottom here that's back, go back to January, if you want, and say in January, that was the point that Frank Giustra entered into, he put a placement in, in January and March of that year.
And you can see that the price went all the way up to 80 cents because everybody assumed Makoa was restarting and that's why Frank was getting involved.
and I think a little bit of speculation there, but it also gives you an indicator of where this project can go when the market believes and knows that this asset is moving forward.So I think we can get back up to those levels.
Much of this decline here may have been due to copper, the proper price going down, if we were just to overlay it.Also.Yeah.
So what happened here was speculation on the hopes that McCulloch was getting restarted, and then I guess that didn't materialize.That's what it is.Is that why there was a selling off?
Yeah, because they assumed Frank Juicer was investing in the company because the next day McCall was going to start up.But I think he said that you guys have a good game plan, have a great team, great asset.I believe in what you're doing.
getting it to the point that we are at today, which is actually restart and moving it.
So it's a pity we missed a little bit of that excitement around the speculation, but the value is still there today of us actually really advancing the project and it's moving forward and why we've seen a decent climb recently.
Do you have any news to share on the timeline of restarting the project?I mean, this is recent 14,000 kilometer expansion. put you in the right direction.
That drilling has already started now.We have started it.It is now we are pulling core off of the deposit today.We already have the initial cores going now to it's been lab.We're going to be getting results back.There's a very quick turnaround.
Anyone who knows Canada and other areas say sometimes it takes three or four months.Columbia, it's not that way.It takes two to three weeks to get our results back.So we expect to be getting into a very solid news flow in the very near term.
And I think that will bring a lot of the attention back too.This is a project that can get the attention through your results, right?I call it the Cool Kids Club. And then it just, all the attention go, wow, this is great.
And everybody remembers and comes back.And that excitement is now building again in the company, which we're very excited about.
What's the game plan after you get the draw results?Are you preparing to produce?
I'm going to say it in a different way.I'm a project builder, and Ernie Mast is a project builder.Frank Jooster is a company builder, and he's a visionary.It's not just the access to capital and the sponsorship, but the vision that he has.
The vision is bigger.Because of those graphs you just showed, There are projects out there that have never been cheaper in history.Well, I'm exaggerating, but probably on a on an inflation adjusted basis, right?
Even from 2021, which was not a great year, prices are down 70% on the majority of projects that have a resource.
So we have an experience, we have a great asset, it's now moving forward, we're creating value, and the assets have never been cheaper in the ground, but I think the outlook for copper is fantastic.
So I expect us not only to be moving forward on Makoa but we are actively looking for and adding more pounds, adding up additional inventory because we have an expertise to move them forward and we have the sponsorship.
So that is the bigger vision of the company and I expect that to be, we'll play that out over time too.So lots of news to get things.There's lots of, lots of the project of lots of legs to continue to create value through drilling.
Then obviously we'll be moving towards more of a production, a project development scenario where we're looking at the engineering and there's all sorts of studies that come out and show potential returns, et cetera.
But there is also the bigger vision of MNA.
Let me ask you this question.So let's end on this note. So you're in charge of your company, you're obviously focused on, you as a CEO control the development of this project, you can't control what happens around the world.
However, what happens around the world could impact the copper price and therefore funding and interest in copper and copper projects and so on and so forth.If you were to read one piece of news, just one,
that would be really, really good news for industrial metals?It could be anything.It could be Trump, could be AI, could be China.What would that be?
So first of all, let's start with something that is, there is a huge disconnect between metal prices and equity valuations, right?So that's the big one.That is probably, as a CEO, my number one role is reducing the cost of capital, right?
So there's a big disconnect across commodities in the mining sector and the metal sector. Right.So the biggest news that I think that would come out would be the topics that we talked about.
When you see a Google or a Microsoft or somebody like that investing in copper, or you would say General Motors or Tesla or whoever, tying into that, then you're gonna see the movement in equities.And it could happen without that news, right?
The world could wake up one morning and go, wow, this is the most undervalued industry right now.Everything's looking shaky out here, but there's a real, and then things shift and get back into equity.
But that's the number one thing that I'm hoping for, is you see the shift of back into getting the equities more lifted, right?But I like basing my plans on ways that I know that I can create value.
And I know that drilling at Makoa, because of the quality of the deposit, what history you saw, even just looking back at this year, where valuations can go, adjust on the excitement around this project.
So I know that we're following and executing on a plan that even if it doesn't run tomorrow, we have to create value today.
Good.Well, I appreciate your update.So good luck with the next phase of the expansion.We'll talk again soon.Take care, Ian, for now.Thanks a ton, David.Thank you for watching.Don't forget to like and subscribe.
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