Mining billionaire warns over ‘breakdown in international order’

Robert Friedland: ‘We have very significant global tensions developing’.
Photo: Bloomberg

Billionaire mining entrepreneur Robert Friedland has warned that rising geopolitical tension is contributing to a “breakdown in the international order” with far-reaching consequences for global supply chains.

Friedland, founder of Toronto-listed Ivanhoe Mines, said trade tensions including worsening US-China relations were making it more difficult and expensive for miners to obtain the equipment they needed, contributing to project delays.“We’re seeing a breakdown in the international order,” Friedland told the ‘Financial Times’ at the start of LME week, an annual gathering of metals and mining industry executives and traders.

“These tensions are Balkanising the world economy, and we see it in the copper industry,” he said. “It doesn’t matter what you’re ordering, the lead times are extending,” while building new mines was “getting more and more expensive,” he said.

“We have very significant global tensions developing... Unlike anything I’ve seen,” said Friedland.

China last week unveiled new export restrictions on rare earth metals and magnets that are vital to sectors from carmaking to defence.

That prompted US President Donald Trump to say he would impose additional tariffs on Beijing, with China then threatening further countermeasures.

A broad range of countries and products, including copper and aluminium, are already subject to new US import tariffs.

The price of copper — which is widely used in industries from energy to technology — has risen sharply recently after a series of supply shocks.

US miner Freeport-McMoRan said in September it would be unable to fulfil customer contracts following a fatal mudslide at its huge Grasberg mine in Indonesia, while operations at Codelco’s El Teniente mine were partially suspended following a fatal tunnel collapse in July.

Prices had climbed close to a record high of more than $11,000 per tonne last week, though they fell again on Friday in response to the latest US-China trade spat.

Friedland said the world was in “the foothills of a major shortage of copper” that would hit before the end of this decade, while Máximo Pacheco, chair of Chile state-owned copper miner Codelco, told the FT the world was already in a supply “deficit.”

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