The energy transition is a trend that is virtually unstoppable, and CopperBank’s Gianni Kovacevic believes copper is positioned to benefit.
It would have been impossible to predict what 2020 had in store for the markets and the global economy, but what will the most powerful countries do in a post-COVID-19 world?
Speaking in a webinar, Gianni Kovacevic of CopperBank Resources (CSE:CBK,OTC Pink:CPPKF) discussed copper’s role after the outbreak and the macro trends expected from Asia, Europe and the US.
“The stimulus that is out there is coming (in) at more than US$10 trillion,” said Kovacevic, who is CEO of CopperBank. “And how will these three blocks use this money to stimulate the economy? … I think most of this money will go into modern infrastructure.”
That’s good news for copper as construction is the largest application for the red metal worldwide, with nearly half of all copper used by the construction industry.
“You’re going to also see what used to take years for permitting and approval — you’re going to see even those things are going to be expedited,” Kovacevic said.
Touching on what’s been happening in the oil space, he said oil is going into an era where it’s going to become like tobacco. “It is going to be a good business for the rest of your life, even if we produce less than we consume,” he explained.
“I don’t know what the demand for oil is going to be in 10 to 20 years from now, but we can just look at clues and look at what many models are telling us — it depends on the type of consumer behavior as it changes, and the adoption for modern technology schemes.”
There’s no doubt that demand for the energy fuel has collapsed as less oil is consumed each day. Over 60 percent of what used to be 100 million barrels of demand goes into transportation, but with little or no travel at all it is easy to see why the need for oil has been reduced.
“I will suggest to you that global energy has already entered this hinge of history,” Kovacevic told listeners. “I believe that it is technology and it is innovation, and of course that means electrification.”
Kovacevic pointed out how many institutions have pledged to divest from fossil fuels, saying that energy companies are now divesting into other things — one example is Royal Dutch Shell (LSE:RDSB).
In a post-COVID-19 world, “You’re going to have trillions of dollars in stimulus going to different types of applications, including electromobility and energy storage — and that will take four or five times more copper per application,” he said.
“I think that the amplitude only gets higher and higher, and for people that follow copper — this is extremely bullish.”
Kovecevic also highlighted how much the automotive sector has been hurt, but said that even though there might be fewer cars, in aggregate the use of copper will increase as electric cars take over.
And it will not only be about the construction of the automobile, but also the infrastructure used to charge millions of electric cars.
“Copper, simply put, is the enabler of green energy,” Kovacevic said. “It’s one of the very few commodities that has significant growth because the future of energy is electrification, and the greener and cleaner that we utilize and create energy, the more that is demanded of copper.”
Kovacevic also discussed the potential of copper in the fight against the novel coronavirus.
“I think there is a significant growth opportunity for new demand globally in a post-COVID-19 world,” he said. “I think you are going to see reports come out that are going to recommend that our hospitals are covered in copper.”
Speaking about where copper supply to meet this increasing demand will come from, Kovacevic made a point on how reliant the industry is on production coming from Chile and Peru.
“Moving forward, I don’t believe companies are going to spend a lot of money going and looking for new types of deposits. It’s just too risky. There’s been too much failure,” he said.
For Kovacevic, new discoveries are going to happen at higher elevation, and will be undercover.
“We’re going to have to have some kind of new technology to be able to read what’s below deep in the Earth to have these kinds of discoveries,” he said.
The major shareholder of CopperBank also shared updates on his company, which currently holds the Contact Copper project, located in Elko County, Nevada; the Copper Creek project, located in Pinal County, Arizona; and CopperBank Royalties.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.