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Robert Friedland, the American legendary mining financier and founder of Ivanhoe Mines (TSX:IVN), expects that by the time the next Association of Mineral Exploration (AME) Roundup conference is held a year from now, it will coincide with the recovery of the world economy and the arrival of a mining supercycle. This will be very beneficial for miners, junior exploration companies, and Vancouver, the global mining finance center. Friedland's speech can be summarized in the following five points.

　　1. Metal minerals will replace oil as the world's largest traded commodity.

Ten years ago, after the previous mining supercycle ended with China's explosive growth slowing down for decades, the exploration industry went through very tough years. Commodity analysts now predict that another mining supercycle will emerge, driven not only by economic growth but also by the global energy transition. As developed economies adopt net-zero emissions targets and focus on a "green" recovery, metal minerals may one day replace oil as the world’s top traded commodity. "I believe explorers and geologists have a very bright future," Friedland said.

According to data from the TMX Group, Canadian junior companies have begun to see an increase in private placements. The TMX Group reported on Monday that the amount of mining private placements rose to $4.8 billion in 2020, up from $3.4 billion in 2019.

2. Metal prices will continue to rise.

In recent months, the prices of many base and precious metals have soared. However, Friedland stated that these price increases partly reflect a weak dollar.

"I think we will see higher metal prices across the board," Friedland predicted. "You will see precious metals appreciating against the dollar. Base metals are also rising against the dollar. Even iron ore, which may have the lowest IQ of the metals, has outperformed gold. It’s an exciting competition."

3. A huge undervalued market.

Driven by the stimulus and policies of a "green" recovery, the actual demand for metals is also increasing. Friedland stated that politicians who talk about transitioning from fossil fuels to low-carbon energy and transportation do not truly realize the scale of this transition. Friedland said, "They are talking about curbing climate change. They are discussing eliminating the burning of coal and hydrocarbons, but in reality, they have no idea what the costs will be."

Friedland stated that if the systems for producing, distributing, and storing electricity are not emissions-free, then electrifying transportation is "completely a huge scam." Greening the grid will be a daunting task that requires new forms of power generation (wind, solar, and nuclear), thousands of kilometers of new transmission lines, and power storage, all of which will require copper, iron, cobalt, aluminum, lithium, and rare earths from this small planet, nearly all of the minerals and metals found in the crust.

"So the entire power system must be rebuilt from the ground up, and this is where miners come in," Friedland said. Given that the greening of the global economy will require almost every conceivable mineral and metal, this is very favorable for mining and exploration companies.

4. A dramatic shift in the U.S. attitude.

Politicians understand that greening the economy will inevitably require more mining. Even jurisdictions like the U.S., which have not been very mining-friendly in recent decades, may roll out a welcome mat. Friedland said, "We are very excited about the U.S. now; the level of development is very low. For a long time, the U.S. government has viewed mining in the U.S. as a harmful activity, and miners have been seen as the bad guys. But now even Joe Biden has stated that he will support mining for copper in the U.S. because they know they need copper. The U.S. Department of Defense has a long list of metals it wants to protect for national security, and they prefer to find these metals in the U.S."

5. ESG will play an important role in metal pricing.

Friedland expects that junior exploration companies will find it easier to raise funds. "In the coming years, you will be able to find more money than in the past." But he added that buyers will also want to know that the copper or cobalt they purchase for electric vehicles or lithium-ion batteries is mined responsibly. He stated that future commodity prices may vary based on ESG (environmental, social, and governance) policies. He said, "Copper will no longer have one price, and gold will no longer have one price. The pricing of all products will be related to their ESG ratings."

(Source: Global Geological Mineral Information Network)