Good afternoon. My name is Neil Hume, I am the Natural Resources Editor of the Financial Times. Over the next 45 minutes, we're going to be debating perhaps the biggest question in the world of commodities at the moment. Are we in the first leg of a new commodity super cycle driven by the greening of the global economy, or is this just a business upswing post-COVID that could run out of steam if and when China withdraws its stimulus? Just to be clear, I'm defining a super cycle as a prolonged period where commodity prices are above their long-run average. Now, to debate this question, we have an incredible lineup of speakers who, from their vantage point at some of the top of the world's biggest mining companies, will be able to offer us an insider's view.
They are Ivan Glasenberg, CEO of Glencore, Steele Li, Vice Chairman of China Molybdenum, and Kathleen Quirk, President and CFO of Freeport-McMoRan, which is the world's biggest publicly listed copper company. Ivan, can I start with you? Commodity prices, they've stormed higher in the past year. Copper's above $10,000. Iron ore is above $200 a ton today. Does this mark the beginning of a new super cycle?
Yeah, I think so, Neil. I think we're in the commodity sector. I think we're in for a good time. Steele can talk more about China. China remains strong, continues to remain strong demand for commodities. We've seen it since 2002 when everyone doubted it in 2002. Between 2002, we had a few hiccups along the way, not much. Everyone doubted China. Everyone said China is not going to keep growing. It continues to grow. It still has the demand for these commodities. We all know China consumes approximately 50% of the world's commodities today, but less in oil, but in copper, in zinc, in iron ore, et cetera, it's consuming 50% of the commodities. We've seen China pull the world out of the commodity dump when in 2009, after the financial crisis, they came in the market again with big infrastructure spending.
They did the same in 2015 when we had a bit of a downswing. It came again. They've been strong during that period, since then anyway. The good thing about it this time, we've gone through the COVID. China quickly recovered, as we saw. Infrastructure spending then continued, and it helped the commodity prices get to where they are today. What we have now, we have the big infrastructure spend in the West, which we expect happening. We know President Biden is pushing it on both the green side and generally to upgrade the infrastructure in America. We got that coming. On the demand side, it's clear, it's there, and it's looking very strong. Where us as a mining industry and where people lose faith in us, and they think it's not the super cycle because we're going to overproduce again.
The markets are good, as you say, copper at $10,000, zinc close to $3,000, iron ore at $200, even coal today going above $100, thermal coal. It's strong all over. Is the mining industry once again going to go and increase production as rapidly as they possibly can and oversupply the market, and we'll have this nice cycle for one or two years, and then we'll kill it, and it will go down again? The good thing why I believe we're in for a super cycle is this time around, we don't have many shovel-ready projects. There's a few new copper projects coming into the market. We know about them. Quellaveco, QB2, Kamoa in the DRC. Those are the ones we know. We got Panama up and ramping. Kathleen will talk later. She's got Grasberg increasing tonnages over late in the year.
That's about all that is there. There aren't shovel-ready projects. The new projects that people, if they want to develop, is in the more difficult regions, it's lower grades, and that's why they've been left till 2013 and 2015. We had the big boom in 2007, where we're spending about $200 billion on CapEx. We're down to the entire mining industry to less than $50 billion. I don't see the projects coming. Yeah, if you look demand, supply, I'm pretty positive for a long-term future. Certain commodities may be a bit different. Iron ore, how long it's going to stay at $200, I don't know, we do know the monster's coming. What is the monster? Guinea. The Chinese are developing iron ore in Guinea.
How big Simandou one and two is going to be eventually with both Chinese consortiums on either side and the rail line and the port being built. How many tons are they going to put out there? 200 million-300 million, we don't know. But in iron ore, there is something on the horizon. In copper, in zinc, in cobalt, we don't see it. Nickel, maybe NPI in Indonesia is growing. We see how big it is getting. It will potentially get up to 800,000 tons in the next year. So it is there. But in the green commodities, okay, besides nickel is a green, but in copper, in cobalt, extremely difficult.
Okay. Thank you, Ivan. We'll revisit some of those themes a bit later on the supply front and on those sort of green metals. Steele, if I could just come to you now. Can we get the view from China? Obviously, China Moly, you're a Chinese-based company. You're a big producer of cobalt as well as molybdenum, sort of gold as well, plus some phosphates. What's your view on the super cycle? Are we in one, or is this just a post-COVID recovery?
I personally believe in that super cycle. I think it's a perfect timing to talk about this topic when we see copper price hit $10,000. Maybe just looking at the long run and from more macro perspective, I think when we talk about super cycle, I think we need to think about what's the engine, what's the driver behind this, right? If you think about early 2000, China is the driver, as Ivan point out. What about now? People have questioned about China before. I think they're talking about first half and the second half. What about the second half? Originally it's investment driven, but now change to consumption driven and the whole structure of GDP is evolving. That may have some negative impact to the consumption of all the commodities.
That may be true, and also, I think that's a natural progress of a evolution of the GDP for country like China. Here, I think this time, if we look at the key driver behind this, we call it super cycle, is the transition, the energy transition. I think that's very critical to this topic. Also again, here in China, I would like to remind everyone that our public commitment from the central government into this decarbonization. If you think about our government is announcing that this emission going to peak in 2030, and thinking about this carbon neutrality by 2060. It's a long run, and it's not easy, but here is our commitment and the commitment to that energy transition. That means a lot of opportunity to all those commodities.
Of course, commodities are going to be different. If you're thinking about copper, for example, that's critical to that journey. Again, this time, not only it's a structural change. When we talk about structural change, it's not something that just a couple month or year, one year or two year here, we're talking about at least a 10-year period of time. I'm a personal believer of the super cycle.
Okay. Thank you, Steele. I think, can we come to you? Obviously based in the U.S., Biden's passed one stimulus program, another couple potentially in the pipeline. Do you see this big structural demand driver there to meet this sort of super cycle thesis?
I think we're seeing it all over, and I agree with what Steele Li was saying. This is not just a China story for copper. Back in the early 2000s, it started with China, and China made up most of the growth, if not all of the growth over the years in terms of copper consumption.
Now we're seeing not only construction and infrastructure and stimulus impacts of copper consumption, but we're entering a whole new era for copper in its role in the decarbonization. When you're asking about super cycle, really speaking for copper, really, we do believe there has been a structural shift in copper. Historically, it's been tied mainly to GDP, and we will benefit as GDP growth continues, continuing to see the numbers being posted, not just in China, but all over. Some of that is a pandemic recovery, and some of it is stimulus activities that are going on. The world is serious about this transition to clean energy, and there's no decarbonization without copper. That's going to introduce a whole new level of demand that we, as an industry, really aren't prepared for from a supply standpoint.
Ivan talked about the prior cycles, and that producers would increase production to meet new sources of demand. Now for the industry, we really don't have that pipeline that we've had in the past. The projects are much more challenging, and they take multiple years to get to production. They're in challenging places, as Ivan mentioned. I believe we're in a new era for copper, and it's a combination of factors, both the surge in demand coming from the economies rebounding and also this new element of demand which can be massive from what's going on in all of the areas around decarbonization. This isn't much of a debate because all three of us agree on this topic, but I think we're in a different space for copper at the moment.
Okay. Well, look, as you said, there is some consensus here that we are in a super cycle, at least for metals exposed to battery electric vehicles, renewable energy, et cetera. You all produce copper, let's focus on copper for a moment. Is there going to be enough of this metal to meet the projected demand from the energy transition? Ivan, if I could just come back to you on that, do you think the industry will step up to the plate and deliver enough?
It's hard to say, but personally, if the numbers and the projections and as Kathleen and Steele said, the demand that is coming in the whole world and the green energy demand, and copper is a big part of that, especially on electric vehicles, charging points, and more copper used in the vehicle, et cetera. The numbers people are and with the decarbonization and the amount we've got to reduce the fossil fuels, the amount coal, oil has to decrease, gas over the years has got to be replaced with other forms of green energy. The estimations are today the world consumes around about 29 million tons of copper. If you take by 2050, it has to grow to 60 million tons of copper consumption per year. That is two times.
To give you an idea, that means we've got to have annual growth of about 1 million tons of copper per year.
Yeah.
Between 2010 to 2019, when we were talking about it and we all had pipeline projects and the world oversupplied it, we could still only add half a million tons of copper to the world per year. We've got to double that today, and as Kathleen said, and she's correct, we don't have a pipeline of projects. Where are these projects going to be? They're going to be in the more difficult regions. We all operate in the DRC. Freeport used to be there. They're not there anymore. Ourselves and Steele are there today with both Tenke and Katanga, two very big operations. Kamoa is coming. This is a tough part of the world in which to operate. It doesn't have the same infrastructure like developed countries, it is more difficult.
The other deposits are sitting in Russia. You're going to have to go develop those projects. They're in more difficult parts of the region in Russia. You're more towards the Arctic, towards the north. It's difficult. They got to come from those kind of regions, you got to go for the lower grades of copper in different areas of the world. You will need higher prices. That's what we're seeing. You will need the so-called $15,000 copper price to encourage a lot of this more difficult investment. People are not going to those parts of the world unless you're certain. You've got to be sure it's there for a while. As Kathleen said, to develop a new project doesn't take one, two, three years. You only can bring it into production about seven, eight years.
To go develop those projects, I think we've all learned our lesson. Don't go develop them thinking that the copper price. You got to be sure the copper price is going to be at that level in seven, eight years' time when you get into production. I think people are going to be a little bit more cautious this time around before they go and develop those projects. To get another 1 million tons of copper per year with the demand that we see, it's going to be extremely difficult.
Yeah. Okay. $15,000 is the incentive price that might be needed then to-
I'm just throwing a number out there, but I would say I haven't looked at all those new projects. I would say for us to go develop a new mine in the more difficult parts of the world, you got to have really good rates of return. You got to be sure the market's going to be there at a decent number in the future. We'd have to look at those projects. The ROIs your company's going to need has to be pretty high. You also know you got to be careful when you do go into these regions, that you do need big profits, but then again, our industry, we all know it, as soon as you make big money, those governments want more of it. You see the debates going on in the world today. You see it in Chile.
Yeah. Chile, yeah.
You see it in Peru. We saw it previously, and Steele knows in the DRC, when the cobalt price picked up, suddenly we had a new mining code. They increased taxes and royalties. You saw Kevin Rudd the other day, the ex-Australian prime minister, talking about increasing royalty as super.
Yeah, for iron ore, yeah
tax on iron ore, which he tried once before. All of us got to be cautious before we go build a new mine because we know what happens when the mine is up and running and we are making these big profits, which we needed to give the returns of going into these new investments. We've all learned a bit of a lesson. When that happens and you do start making the profits you need to give you those returns, does the governments in those regions come and jump on you? I think a lot of lessons have been learned, and all of us got to be very cautious and certain that we're going to get those returns. Is it a $15,000 number that encourages us to go do something? Most probably, yes. That could potentially be the number.
Okay. Steele, can I just come to you? Where do you think this copper is going to come from? Can scrap play a part, substitution, or will it be new mines or?
Maybe you start with saying the quick calculation, because EV is so hot right now, and we don't need to argue for that trend because it's already on the road, right? If you're thinking about those projection, right, talking about 30% penetration by 2030, it's not that aggressive. That's about 30 million units, EV car, right? If thinking about average consumption of copper, say, maybe 70- 80, Ivan, per car, kilogram.
Yeah.
That means at least 2.4, roughly, right, million tons in the EV sector only. That means what based on the Glencore's existing production, that means we need another two Glencore.
Wow
taking Freeport production, right? We need another one Freeport to supply that consumption, or maybe two Escondida, right?
Yeah.
That's the scale we're talking about. If you look at the existing market size, Ivan point out it's almost 30 million tons, right? Already, for the total copper market. If you're thinking about just the 1%, right? That's 300,000 ton. That's a so big project in the copper world. Thinking about how hard that we can bring it from exploration project to the production, right? Kathleen Quirk point out, at least the six, eight years and we don't need to say how much CapEx we need to put into that big project. Only that is just the 1% of the total consumption of the copper world right now. This is the scale. We come up to that level already, and now there's a new driver, is energy transition behind this. That would be a big incremental part.
Put all this together, people are talking about the big gap if you forecast into the 10-year period. Thinking about how to fit into that gap. I don't know where we're going to find enough copper to fill that gap.
Okay. Well, can I just come to Kathleen? Where are we going to find One of your big mines is Grasberg, which is an incredible engineering feat, very high up in mountains in Indonesia. Now you've gone underground there. Where are we going to find more of these, more Grasbergs from?
Where everyone has been looking for a number of years. It's striking. If you look at the discoveries in copper, of all the mines that are operational now, most of the mines were discovered 100 years ago. Grasberg is one of the more recent discoveries. It's not like the oil industry where you have a constant flow of new discoveries. Most of the mines have been identified that are available around the world, but for one reason or another, they haven't been developed over time. It's a very mature industry. You ask where the copper's going to come from. I think we're going to have to see more copper coming, the price incentivizing more scrap. Scrap today is probably a third of the market or so. A third of consumption. There'll have to be some way to incentivize more scrap coming to the market.
There's a limit on that. There's a limit on substitution. I think everybody will be testing, is there a way to substitute? Copper's basic properties of conducting electricity really can't be replicated. It's going to have to come from a combination of things, and we always say that necessity is the mother of invention. In copper, it's not like the oil industry where there was a new source of supply coming from shale production.
No
that John introduced that helped solve that problem of supply. There's not that in copper, but everyone, you must understand that everyone, every company around, every mining company is trying to unlock additional copper production. Looking at different ways, looking at technologies, looking at leach production. It's going to take all of the above for the industry really to meet what we expect will be rising demand. If Ivan's numbers are right, about one million tons a year, that's really, really hard. The brownfield projects that we have at Freeport are really good projects, and they're actionable. They're not going to move the needle towards that number that Ivan pointed out. Just talking about the timeframe that it takes. At Grasberg, we immediately began to develop that mine, initially as a surface mine.
We had planned since the late 1990s that at some point, the economics would point us to mining from the underground, because the size of the surface mine was just too large to continue mining from the surface, and it was more economic to extract the ore from underground. We had plans in place, since the late 1990s. We actually started investing in the underground workings in 2003. Think about that's more than-
Long lead times, yeah.
15 years ago, we've been investing. We're just now starting to build significant production from the underground. We had a transition period where we completed mining in the open pit, in late 2019, and started ramping up the underground in 2020. We're about 75% of the way there towards our ultimate metal targets, but it's multi-billion dollars of investments that we have to date. Many, many years of investments, many years of planning. You have to understand the whole resource. You have to understand the ground conditions. Put the long-range plan together. This is not an overnight type of exercise to build production on the scale that Ivan was talking about. Everybody in the industry has the want to build supplies in a sustainable fashion.
We as an industry need to be disciplined. Back to Ivan's points, we need to be disciplined as an industry to go into projects with eyes wide open so that we can generate returns, provide a good business for all the stakeholders, and generate returns to our shareholders. The industry has become much more thoughtful about allocating capital. I think it's not something that can be fixed overnight, but we do have an industry that is very good technically.
see how can we build supplies. It's not something that's easy. The easy projects in our industry have been done.
Okay. Well, thanks for that, Kathleen. Ivan, I want to come back to you. Let's suppose your figures are right. Not only copper, but cobalt, nickel, there's going to be a lot of demand for these metals. Do you think some of the big end consumers, the car companies, the renewable energy companies, are sufficiently sort of worried enough about their supply chains, where exactly this stuff's going to come from? You look at the DRC, and I'll come to Steele in this in a moment. China has locked up a lot of this supply. You're even seeing Chinese battery makers come in and investing in DRC mines. Do you think, I don't know, a GM, a Ford, a VW, those sort of companies, are sufficiently worried about the fragility of their supply chains, given we could be facing a big shortage here?
Yeah, that's an interesting question. We look at it all the time, and we know the numbers. As we've been talking about copper, they're going to need copper. Cobalt is even worse. The amount of You remember, cobalt, you can't go produce cobalt. It's a byproduct of another commodity, of copper mainly in the DRC, where most of it comes from. We get a bit from nickel in Australia, a bit from nickel in Canada, but it's not large. The bulk of it comes from DRC. Nickel, yeah, maybe they will keep getting supply because nickel, as I said, there's nickel ore in Indonesia, and the Chinese are doing a great job in producing nickel ore. Who's producing the nickel pig iron in Indonesia? It's the Chinese. It's close to 100% of the NPI being produced in Indonesia is from China.
If you look at the D.R.C., who's in the D.R.C.? Mainly the Chinese. Besides us, it's the Chinese. You've just seen when Freeport sold their recent reserve, and Steele can talk about it, the Chinese grabbed it. Not only Steele's company, but he sold part of it off to a battery maker. I think the Chinese are seeing it. They've reacted to it, and as I say, they've gone into the D.R.C. in a big way. Copper, we sold one of our assets in Peru to the Chinese a while back. I think they getting it and they seeing it. The Western car companies are not seeing it in the same manner. A lot of our cobalt supply is being tied up with long-term contracts. It's no secret we've done a contract with Tesla, some with BMW, et cetera, but mainly to Chinese battery makers.
The Western car companies haven't picked up as fast, and they are not scrambling to us to tie up supply, long-term supply contracts. They haven't done what the Chinese have done. They haven't even gone upstream and started buying mines in these countries, doing what the Chinese companies have done. They're sitting a bit on the fence thinking we will always get supply. I've looked at it carefully and thought, "Why are the car companies not in panic mode?" Looking here recently, you remember in the car industry, they called it the Lopez factor. I think his name, José Ignacio López, when he started squeezing the suppliers, the supply chain in the motor car industry so he could produce Have a shortage of aluminum, steel, et cetera, which they needed in the car industry. This is just my guess, I'm thinking. They've never seen no supply.
They're sitting back and saying, "Why should we worry? We know the supply will come. It has always come. We know we'll find a way, whether it's cobalt, we may engineer it out if need be." That's the one thought they may be thinking. They think these suppliers, these great supply, whether they're the miners, et cetera, they'll find a way to give us supply. That's what I'm guessing. I think, that's why we haven't seen the panic yet. We haven't seen any of them come push for new long-term supply contracts as much as we've seen the Chinese battery makers.
Either that is the case or maybe this recent situation in the chip supply is a bit of a wake-up call, and for the first time, they're looking and say, "We cannot get chips, so we have to slow down production." However, the chip supply is not what it is in mining, because chip supply, people will find ways to make more chips. As we've been debating on copper, cobalt, I believe even a bit worse. It's going to take years to get it, and some say I don't think we can get the amount of supply that they need. I have no idea why they haven't been alerted to the problem that exists. I believe it will come, but maybe it will only come when they just can't get it.
They're not looking a year or two years ahead, which it seems like the Chinese battery makers are looking five, 10 years ahead.
Tesla should come in and buy Glencore then with all Elon Musk's huge market capitalization.
Well, if you see the multiples he trades at, and you see the multiples us poor guys in the mining industry trade at. You look at EBITDA multiples of the mining industry. You wrote an article, I think, today, and you look at us, we trade at three and a half times multiples. Most of the mining companies besides the pure copper plays, Kathleen can talk about it, they trade at a much higher multiple being a pure copper play than the rest of the multi-commodity mining companies. We all trading at a three and a half times EBITDA multiple. The S&P, I think, trades at a 16 times multiple. Tesla, I think, trades at a 61 times EBITDA multiple. Yeah, I think he could get us rather cheaply.
Okay. Steele Li, can I just come to you just on this concept of copper and cobalt as strategic sort of metals? Ivan Glasenberg referenced there that he recently sold a stake in one of mines in the DRC to CATL, which is the world's biggest battery maker. Tell us a bit more about that deal. Are the Chinese battery makers, car companies, trying to secure supply? Should the West be worried about this?
Talking about this partnership, I think not only because of this is a great project, and thanks, Kathleen and Freeport. No doubt about that. Also, I think that this is a demonstration of their trust, in CMOC as an international mining company, and we always hold our highest standard for ESG and all this compliance issue. We are a very good operator. Put all this aside, I think, to me, the interpretation is to not only secure the supply of cobalt, but more importantly, I think it's a clean and a responsible cobalt. I think that matters, and that matters a lot in the future.
I think, if I put myself in CATL shoes and they're looking for the trend and where those cobalt coming from, and they want to make sure this is the clean and the responsible cobalt with the highest ESG standard, that they can prove to the end user in the future that this is coming from where CMOC operate in DRC and coming from our production. This is very important. I think that this is also the real panic it should be into those battery manufacturer or the OEMs. At the end of the day, I think, talking about this hot topic, ESG, and in the future, everyone will care more about where it is coming from. Not only do we have enough, but also enough and stable, reliable, but also clean and responsible.
Ivan, CMOC, Glencore and some other leading players there, we are working on some project. We're using blockchain technology. The objective is to make our cobalt production 100% traceable, down to the entire supply chain. The objective for that project is to not only supply to the world enough cobalt, but also a responsible and a clean cobalt. I think that's the way I interpret that partnership. Of course, that's I think quite normal if I look at the industry, right? Back to 20, 30 years ago, when you're thinking about those Japanese player, they putting minority stake into the copper mine because they are smelter, right?
Mining or mining
in our raw project, steel manufacturing. Yeah. Yeah. For us, I think, this is sort of like running a competition. You want to partner with the leading players, right? CATL is the leading player in this industry. I can tell you that this is not the first time, or we've been sending this message around and I just say that maybe Chinese player compare with other Western player, they act very quickly. They maybe have a longer vision and more strategic planning for the future. That's the way I look at this kind of a difference compared with the other Western players.
Yeah. Kathleen, can I just come to you on this? Do you think big OEMs, car companies in the West should be starting to panic about their supply chains and where these materials are going to come from?
About panic, but I do think that Ivan makes a good point that copper has always been available. And so they haven't been as worried about copper, as they have some other commodities like cobalt, that's a much smaller market and coming from a place that's principally, the DRC, where some of the consumers were concerned about. It's striking the amount of new awareness to this issue, that we're seeing not just from OEMs and consumers, but also governments in understanding now that in order to achieve this transition, we really do need a good supply of long-term copper in the future. So the awareness-
In the U.S.? The U.S. government is sort of realizing that, or?
I think all governments, Ivan, particularly, I think the U.S. is becoming more aware of the role that copper plays in this decarbonization and all the things as we electrify vehicles, as the government's infrastructure plans are being rolled out. I think they're getting more knowledgeable about the role and the strategic role that copper plays in all of this. I think you'll start to see people and OEMs and governments getting more involved in understanding the supply and demand factors to make sure that the supply chain is resilient and reliable with respect to copper. In the past, as Ivan was pointing out, there's really always ample supplies, but there's been a structural shift here, and I think the future may be different. You may be hearing copper being characterized more as a strategic metal from around the world.
I'll also point out what Steele was saying about the cobalt industry and blockchain and responsible production. The copper industry is doing something similar. Not necessarily blockchain, but we've got a responsible production assurance program that's administered by a third party where you apply your operation, and it has to meet a series of robust ESG standards in line with the United Nations sustainability goals to be designated under what is referred to as The Copper Mark.
Okay.
Freeport has been a leader in that, in getting its site certified, and we've got several sites already certified, and we're going to work to get all of our sites certified. I think the OEMs will be differentiating responsible producers, and that's very much front and center on their mind because it's on their consumers' minds. It's a changing situation, Neil, in that I think people are becoming more aware of copper and the limited supplies.
Okay. Before we just take some questions from the audience, just very quickly, just Kathleen, on the point Ivan picked up about the valuations of the miners, isn't it slightly frustrating that as a company that is going to help the energy transition, you don't get the sort of stock market rating of a Tesla or some of these hydrogen companies that are out? Is that a source of frustration? What can you?
No. I mean, the market's the market.
Yeah
We have to execute our plan, show investors the cash flow opportunities, the delivering on our results, doing things safely, doing things responsibly, and I think the ratings will come. We are poised, I believe, to re-rate. As the awareness of copper is being critical to this sustainability goals around the world, I think you will see copper valuations re-rate. We've seen that starting to occur, and that's likely to continue. As miners, we can't focus on what Tesla's trading at or we're trading at. We just got to produce the numbers and book the numbers and let the market value us.
Okay. Right. We've got a few questions now coming in from the audience. Ivan, I've got one from you, from Grant McGillen. He asks, "If you're so positive on copper, why are you withdrawing from Zambia?
Yeah, that's a good question. It was a difficult mine. It's a hard country in which to operate. We were having certain issues there, and we felt this was the best solution for our company. It was taking a lot of management time. Even with $10,000 copper, it's still difficult. Maybe the Zambian government don't face the same issues we were facing, various issues around in the country, and they can make it work easier than we could make it work. Even at $10,000 copper, we felt this was the best way to go. You remember, they did buy it from us. We do get the offtake.
Yeah.
They did take on the $1.5 billion of debt, and that will be repaid as they produce the copper. We felt this was a fair solution for both sides and work better for us. Outside of Zambia, we do produce 1.25 million tons of copper. Zambia would have produced up to 110,000-125,000 tons. We just felt management time, it just wasn't worth the time and effort and let's focus on our other assets around the world.
Okay. Thank you. Steele, I've got a question from Tom Quinn, and it's on this theme about copper being a strategic commodity. He asks, "Is the mining industry headed for the same geopolitical battles that affected oil in the past couple of decades?
Well, that's a big question, huh?
Yeah. You haven't got long to answer it, but take a stab at it.
I think geographic challenging is one of the most biggest challenge I think the mining world, mining industry are facing. I should say that's the world we're living, right? I mean, mining business is not like new economy, right? We're not creating something new, right? We are just doing this very hard job and try to dig things from underground and then make it the product and then supply you know, as the raw material to the world and changing the world and improve the quality of the life. I think, back to this business model, I think we always need to bear in mind that's a balance of different stakeholders and also you have to take care of all the interests of the different stakeholders. I think that's one of the principles that all of the mining company can live in the world.
Ivan, do you think copper is going to be having the same geopolitical battles as oil?
Yeah, we're going to have issues in the various countries in which we operate, for sure. Yeah. Definitely in various countries, we're going to have the same thing. You've got to remember, we can't move the asset. It's in the country in which we produce. You can't pick it up. We don't have a Nike factory we can move to another part of the world. Yeah, we're going to have issues in the countries in which we operate, no question. As I say, you're going to have the tax grab, as we start making super profits, we're going to have those issues in those countries.
Yeah, just on the tax grab, Kathleen, what do you make of the proposal in Chile at the moment? That's another question from one of the audience.
Well, the whole industry is following the situation very closely. As we've been talking about, as these investments are enormous. The project that we have in Chile, at El Abra, could be a $5 billion, $6 billion project. So, making that investment requires that we understand what the rules are. We've got technical risk and all kinds of things in our industry that we need to manage, but generally, we want to know what the economics of the project will be under the regime of the country. We're watching it closely. I think it will affect investment over time if countries continue to change the rules as they go. It's human nature, though. I mean, I think what governments do when prices rise. Really our philosophy in terms of going into a mine is that there needs to be a fair allocation.
Yeah.
The government and the host country and all the stakeholders and communities need to participate in a significant way in these operations. That's the only way they're going to be sustainable long term, is if there's a fair allocation of the economics between the investors, the host countries, and the communities. Finding that balance is critical to the long-term stability of an operation. As an industry, we're very accustomed to these things and we'll work our way through it. It's a very generous industry in terms of how it approaches communities, how it really fosters development around the places where these operations are.
Okay.
I think it will be worked out in Chile.
Neil?
Well, sadly, we're out of time. We could have gone on for a bit longer. Just one final thing. I mean, Ivan, you retire at the end of June. I mean, is there a bit of regret there that you're not going to see this super cycle come to fruition?
You know, Neil, I am fortunate to say we've got the company in the right position. It's in a very good, stable state. We got the right commodities. We all talk about the green energy. We got cobalt, copper, nickel, zinc, so we're in a pretty good position. My successor's taking over at the end of June. He's been in the company a long time, and I think he'll do a great job. I'm fortunate to still hold a large investment in the company, so I'm not leaving. I'm leaving the operations of the company, but I'm still a major shareholder, and I'll be very happy to see the company perform well and hopefully get the share price back to its IPO price and sitting on the sidelines and watching it perform well. No. No regrets. I'm happy that I'm leaving it in such a strong state.
If I listen to my colleagues in the industry, they believe what I believe on the future of these commodities. It's going to have a great future, and I'll be watching with excitement from the sideline.
Okay.
Congratulations, Ivan.
Going to have to bring this chat to a close, but listen, I'd like to thank you all for what's been a really sort of fascinating debate about, yeah, the importance of commodities, which can sometimes be overlooked. With that, I'll hand back to the studio. Thanks very much.
Well, thank you very much, Neil. We'll forgive you for going a little bit over there because that was a very good question. I have to say, some cracking questions from FT readers as well. Do keep them coming. This is your chance to grill the bigwigs. Some dizzying statistics there about copper in particular in that session. I mean, based on Biden's numbers yesterday, demand for an extra 1 million tons of copper a year. How on earth are they going to fulfill that? And something that investors, I know, will be watching very closely. I did have a chuckle at the comments about the valuations of Tesla versus the valuation of Glencore. Anyway, lots to digest there. Next, we will be shifting our focus to the future of work, and particularly how the pandemic has transformed what we used to call the office. Join us shortly.