Managing Expansion Risks in the Copper Industry

We talk about risk in mining all the time — but are we asking the right questions? We model the technical. Assess the political. Map the environmental and social. But real risk doesn’t always announce itself. It lives in what’s missing— Rushed timelines. Relationships that haven’t been built. Systems not designed for what you’re trying to do. It’s layered. And it’s human. Over the past few years, we’ve spent time on the ground in Zambia — not just building a portfolio of small- and large-scale assets, but helping others do the same. We’ve looked at copper projects with all the right signals: grade, processability, location, momentum. One deal had it all. A first-mover opportunity. The kind that attracts serious attention. And it did — funds, strategics, brokers from London, Switzerland, Australia, Dubai. Every metric said “go.” But the closer we looked, the clearer it became: → No processing infrastructure → A governance layer we couldn’t trust → Traditional dynamics we couldn't ignore Each challenge was solvable. But together, they revealed a system not yet ready for responsible capital. So we walked away. The decision was hard — but it was also strategic. And that’s stayed with me because the most investable opportunities aren't always the ones that look the best on paper. And saying no to the wrong kind of risk is what creates space to say yes to the right one. Today, We’re focused on something different: It’s not a risky asset. It’s a misunderstood model. One that’s often overlooked, underestimated, or misunderstood: Zambia’s legal, licensed small-scale mining sector. These are not artisanal operations. They are formal concessions — typically 400 to 1,200 hectares — held by Zambian owners, sitting on highly prospective copper and critical mineral ground. They fall outside traditional development frameworks. No JORC. No feasibility. No pathway to capital. And because of that, they’re labeled “high risk.” We see it differently. These assets are not high risk — they are high potential. What’s missing is not geology. It’s the system around them. That’s what we’ve been building. Fit-for-purpose infrastructure. Local technical and operational support. A shared model that clusters mines into investable hubs with centralized processing, responsible offtake, and traceable production. This is the hard work that institutional capital often won’t take on. But it’s the work required to unlock an entirely new tier of value across Africa. This is what investable risk looks like to us: Measured. Structural. Scalable. And it’s where I believe the future of responsible mining will be shaped — Not just by billion-dollar projects, but by the systems that make the $20M, $50M, and $100M opportunities viable. From the clusters of small, smart, licensed mines that make up the missing middle. If we’re serious about the energy transition, we need to be serious about the missing middle. And that’s exactly where we’ve chosen to build.

If Smelters Can’t Turn Copper — Then Higher Prices Are Just the Beginning. Global copper prices may be propped up by macro expectations — but the real game-changer is now in the smelter floor. Smelters around the world are already giving back concentrate to miners. That’s not a temporary glitch. It’s a structural warning: the bottleneck has shifted. From now on, the constraint won’t be mines — it will be concentrate throughput, capacity, and transformation logistics. Under the hood: LME cash-to-3-month spreads are tightening despite flat mine supply. Treatment & refining charges (TC/RCs) remain at historic lows, eroding smelter margins — forcing many to cut intake or delay processing. Stocks at Asian warehouses are declining, but that won’t matter if the upstream “funnel” gets clogged: concentrate → blister → cathode → busbars → final product. What does this mean for anyone building AI infrastructures, grids, EV-charging hubs or renewables? 1. Supply becomes a strategic asset — not a commodity. Buying copper at spot price is fine… until the smelter queue delays delivery by 6–12 months. Projects stall, financing costs spike, value chains freeze. 2. Vertical integration wins. The advantage now belongs to players who control both concentrate supply and refining – or have pre-negotiated offtake and refinery capacity secured years ahead. 3. Risk management needs to evolve. Hedging physical flows must include not only price, but time and delivery certainty. Smart hedging now means locking not just price, but access to capacity. 4. End-use players must rethink sourcing criteria. For data centers, EV-chargers, grid builders — copper cost is now inseparable from availability, throughput, traceability. Delay becomes a cost. As CEO leading a global metals-infrastructure supply-chain, here’s my advice to: Investors & funds: insist on copper portfolios with back-to-back concentrate offtake + secure refining capacity + realistic delivery schedules. OEMs, utilities & infrastructure players: source not on “cheapest cathode” but on qualified, traceable, deliverable copper capable of meeting future demand surges. Smelters and miners: rethink business models — integrate downstream, optimize logistics, price not just metal but availability and timing. The next decade’s winners will not be those who merely trade metal — they will be those who architect resilient metal-led ecosystems built for electrification, scale, and AI-infused infrastructure. Because in a world racing toward electrified grids, cloud-powered AI, and massive EV fleets — copper isn’t just a commodity. It’s the critical path. Trafigura Glencore London Metal Exchange CRU Fastmarkets Bloomberg Reuters Schneider Electric ABB Siemens Eaton #Copper #Smelting #SupplyChain #Electrification #AIInfrastructure #MetalsStrategy #IndustrialSovereignty #Grid #EVs #GlobalBusiness #Hedging #Infrastructure #EnergyTransition

THOUGHTS ON COPPER CAPACITY EXPANSIONS: While there has been consistent noise in recent years from the mining industry about the positive outlook for copper (which I totally agree with), including some dizzying estimates around how much capital needs to be spent to develop new capacity to meet expected demand – we’ve done some digging into 25 years of historic data and have come up with some high-level analysis which suggests that the risk appetite from the industry (with regards to capital investments) is perhaps not matching up to the rhetoric. Our analysis (summed up in the three simple charts below) shows that the number of greenfield projects invested in, as a proportion of total copper capacity expansions has been falling rapidly over the past ~25 years. This is despite our analysis also showing that the average operating costs AND average capex intensity of brownfield expansions now EXCEEDS greenfield capex/cost estimates for projects being developed.. Clearly the average ‘package size’ of greenfield investment is typically larger than incremental brownfield expansions, which brings with it additional risk, but the conclusion I make is the industry as a whole is (on average) preferentially investing in projects with inferior economics, in the name of risk management. All this said, one can hardly blame many mining management teams (and financial backers) for being a little ‘gun shy’ - greenfield projects often have their own range of additional challenges and longer timeframes. And it was also only ~10 years ago (alongside the large commodity price declines of ~2015) that large global diversified miners (and smaller miners alike) were punished by the market for over commitment to new capex across a range of commodities – and this led to the repeated adoption and promotion of very clearly defined ‘capital allocation frameworks’ by many major miners – who were typically very keen to educate the market on their newfound capital discipline. While, of course, I am a fan rigorous capital discipline as well, our analysis has only helped solidify my structurally bullish view on copper, as the data highlights a tendency for the industry to perhaps leave larger greenfield development ‘sitting on the shelf’ in the near-term, making it harder to see the forecast supply gap getting bridged over the medium to longer term. Furthermore this also highlights to me that those companies with the stomach to move earlier towards investment into larger scale (but economically rational and sound) copper projects may reap the benefits in years to come…. #metalsandmining #copper #basemetals #equityresearch #miningcapex

Chile’s Copper Balancing Act: What Quebrada Blanca Reveals About Mining Economics When Teck Resources paused growth plans to stabilize Quebrada Blanca (QB), it seemed narrowly corporate. Yet the move reflects broader shifts in copper economics, in Chile and globally. QB was intended as a crown jewel—Teck’s pivot from coal to transition metals. But with US$4 billion in overruns, delays, and tailings challenges, it shows how new “mega-mines” are more complex, capital-heavy, and politically scrutinized. For Chile, this is a stress test for its mining ecosystem. Chile’s history is defined by waves of capital—Chuquicamata, El Teniente, Escondida, Collahuasi, Los Pelambres—built in an era when water, ESG, and tailings were less critical. Today, setbacks are less geological than infrastructural and regulatory. Economically, the pause has dual effects. In the short term, global supply tightens—already hit by Ivanhoe’s Congo issues and Peru’s unrest. Prices firm, volatility stays. Long term, Chile’s marginal cost of new copper is rising faster than expected. With energy, desalination, and labor costs layered atop technical hurdles, copper here no longer holds its old cost edge. Still, momentum persists. Spence’s expansion, Collahuasi’s debottlenecking, and Los Pelambres’ desalination-driven growth strengthen Chile’s base. Codelco, despite strains, anchors partnerships like QB. Coupled with lithium, Chile is repositioning as both copper powerhouse and diversified supplier. This moment is unique: Chile must manage legacies—aging pits, infrastructure, social demands—while delivering copper for global decarbonization. Teck’s pause reflects a shift: scale giving way to sustainability, resilience, and social license. Chile remains the world’s laboratory for large-scale mining in the 21st century. Its handling of QB will shape not only its copper share but also benchmarks for costs, permitting, and ESG. Delays unsettle investors, but long-term observers see Chile again writing the rules of modern mining—with tailings, water, and sustainability at the core.