In La Tribune 04/09/2020
In a world of negative interest rates, when bonds and other financial products yield less and sometimes cost, the safe havens are gold, Tech and Tesla. But the gold market at $2,000 is close to exploding towards $2,500, it needs a substitute that is just as tangible, but with a wider and deeper market, and that is copper.
Signs of a nearby price explosion
The signs of a copper price peaking in the coming months between $8,000 and $10,000, compared to $6,600 at present, are already there: Chinese post-covid « V » recovery, security stocks, numerous speculative positions, production collapses linked to the epidemic, particularly in Peru, Mexico, Panama or Chile, possible deficit between production and consumption in 2021 and in the longer term an increase in copper consumption in all sectors thanks to the ecological transition.
Copper, a non-strategic material?
However and curiously, the recent update of the European Commission’s list of strategic raw materials does not seem to have retained copper. A material is listed when Europe is anxious about it or when it is indispensable for a regalian policy such as the « green recovery ».
This probably means that Europe is self-sufficient in copper for its current and future needs, or that copper, an indispensable material for the ecological transition, is not a strategic material for the European « green recovery ».
Geopolitics of aluminum
Conversely, if this list indicates that Europe could be in difficulty on certain matters, the rest of the world may be in large surplus. Bauxite is this example. Discovered by Pierre Berthier in 1821 in the commune of Les Baux-de-Provence, hence the name bauxite, it is abundant: world reserves are significant and are present on all five continents, mines are multiplying, particularly in Guinea, and the final product, aluminum, is perfectly recyclable. In addition to automotive, aeronautics, electrical wiring, packaging, construction, the future of aluminum is also in electrical cables and voltaic. Finally, it is substitutable with copper, plastics and steels.
Yet bauxite is listed by the European Commission, because in 2018 US sanctions against the Russian oligarch Oleg Deripaska, owner of Rusal, hit his Irish bauxite-to-alumina plant. This plant is the European leader in the sector, which is why its shutdown caused fears among our automotive and aerospace consumers and strong tensions in our European aluminum market, while at the same time another supplier, Alunorte, was, for other reasons, in reduced activity.
In this metallurgical episode of President Trump’s economic war against the rest of the world, the European industry was weakened neither because of a bauxite shortage nor because of the Americans, Russians or Chinese, but because of itself. European industry had spent years selling or closing its own factories, because our French or European industrial boards of directors were never interested, neither competent nor in the forefront of the geopolitics of natural resources. CQFD.
Relaunching the European mineral industry’s strategy of influence
All this illustrates that it is not a list of strategic materials that we need in Europe. It is only the revelation of our weaknesses, otherwise why not push logic to its end and put hydrogen in it as well? Moreover, it should remain secret; who has ever seen the Chinese Strategic Reserves Bureau publishing a monthly inventory of the materials it secretly holds?
No, we would rather need a list of factories producing strategic material that should be reopened. In France these are those of the lanthanides at La Rochelle, PGM’s at Noisy-le-Sec, steel, alumina… etc. Contrary to what an expert from the European Defense Agency said, this does not cost much, and, believe me, the availability of raw materials will follow soon from new European mines and more intense European recycling.
So it doesn’t matter if this or that element such as copper is or is not in its place in this list. This is just another admission of confusion between the symptom and the cause of the disease. What is useful are not the materials, but to stop the immense disinheritance of the European mineral industry’s strategy of influence. It is good that Thierry Breton reminds us of this, provided that it is followed by many effects.