Why Copper’s Rally Is Different This Time | Rob McEwen

Key Concepts

• Copper Price Surge: Driven by future demand (AI, energy transition), supply constraints, geopolitical factors, and a weakening US dollar. Currently around $6/lb ($13,000/ton).
• Critical Minerals: Copper is categorized as a critical mineral, leading to increased geopolitical focus on its supply chain.
• M&A Activity: Significant consolidation occurring within the copper industry as majors seek scale and navigate regulatory hurdles.
• Lassoulis Project (Mchuan Copper): A key development project with dramatically increased NPV due to rising copper prices.
• NPV (Net Present Value): A financial metric used to evaluate the profitability of a project; significantly impacted by copper price fluctuations.
• Capex (Capital Expenditure): The funds used by a company to acquire, upgrade, and maintain physical assets.
• AI & Data Centers: Emerging as major drivers of copper demand due to their energy and infrastructure requirements.
• Sovereign Funds: Investment funds owned by governments, increasingly interested in securing copper supply.
• Commodity vs. Equity Ratio: Currently at a 55-year low, suggesting potential for increased investment in commodities like copper.

Copper Market Outlook & Mchuan’s Strategy at the Future Minerals Forum 2026

The Future Minerals Forum 2026 in Riyadh, Saudi Arabia, is characterized by optimism regarding the copper price, currently at $6 per pound (approximately $13,000 per ton). Rob Mchuan, Chief Owner of Mchuan, Inc., attributes this surge to anticipated future demand, particularly from Artificial Intelligence (AI) and the energy transition, coupled with a shortage of supply, geopolitical tensions, and a declining US dollar. The debate centers around whether the US will maintain its reserve currency status or if its value will diminish due to spending.

Geopolitical Landscape & Industry Consolidation

The increasing geopolitical tension surrounding access to critical minerals, specifically between China and the United States, is a prominent theme. The atmosphere at the Forum is optimistic, with major companies poised to benefit from higher prices. However, a significant trend is the consolidation of the copper industry through mergers and acquisitions (M&A). Mchuan explains that this is partly driven by the difficulty and lengthy timelines (up to 15 years) associated with developing new “greenfield” copper projects and navigating antitrust regulations. Companies are prioritizing scale and dominance through M&A rather than lengthy development processes. This consolidation is expected to drive further activity as companies seek to acquire smaller “intermediate” and “junior” mining companies to gain scale.

Lassoulis Project: A Case Study in Profitability

Mchuan Copper’s Lassoulis project in Sala serves as a prime example of the impact of rising copper prices. A feasibility study completed in the fall showed a Net Present Value (NPV) of $2.94 billion at a copper price of $4.35 per pound. At the current price of $6 per pound, the NPV has more than doubled to over $7 billion. Mchuan highlights the sensitivity of the project’s profitability to copper price fluctuations, noting that a 10% price change results in a $1 billion shift in NPV. The project boasts a potential gross margin exceeding 71%. Mchuan jokingly references aiming for an “Nvidia moment” – achieving the high margins associated with the tech industry.

Financing & Development of Lassoulis

The Lassoulis project requires a Capital Expenditure (Capex) of $3.2 billion plus an estimated $0.5 billion in working capital. Despite the substantial investment, the project offers a payback period of under 3 years and a projected mine life of 21 years, extendable to 30 years with technological advancements. Mchuan is exploring various financing options, including bringing in an experienced builder, securing debt from sovereign funds and equipment suppliers, and pursuing an Initial Public Offering (IPO) in the first half of the year. The IPO could involve listing Mchuan Copper directly or rolling it back into Mchuan Inc. to create a larger entity comparable to Freeport-McMoRan or Glencore. Construction is targeted to begin in late 2026/early 2027, with production anticipated by 2030.

Strategic Evolution & Diversification

Mchuan Inc. is adapting its strategy to capitalize on the favorable metals price environment. While maintaining a strong presence in the gold and silver space (acquiring smaller juniors to extend existing operations), the company is increasingly focused on copper, recognizing its importance in the energy transition. Mchuan draws inspiration from Cisco Systems’ acquisition strategy (180 acquisitions under John Chambers) and envisions potentially integrating numerous mining and exploration companies. The company is also exploring opportunities in Saudi Arabia, partnering with a local entity to leverage the region’s potential. Mchuan aims to double production to 250 by 2030.

Sustainability & Risks: A Contrarian View

Despite the bullish outlook, Mchuan acknowledges the cyclical nature of copper prices and cautions against excessive exuberance. He notes that copper has previously fallen to as low as 60 cents per pound. Potential risks include global economic downturns, geopolitical conflicts, and a slowdown in industrial activity. However, he believes that strong demand from emerging markets and the growing need for copper in AI and energy infrastructure will support prices for at least the next couple of years. He points out that the ratio of commodity prices to equity prices is at a 55-year low, suggesting an undervalued commodity sector.

A key question is whether the demand from AI and data centers will lead to companies securing their own copper supply, similar to how Tether, a cryptocurrency company, began purchasing significant amounts of gold. Mchuan believes this is a plausible scenario, given the substantial capital held by these companies.

Data & Statistics

• Copper Price: $6 per pound / $13,000 per ton (approximate)
• Lassoulis NPV (at $4.35/lb): $2.94 billion
• Lassoulis NPV (at $6/lb): >$7 billion (over 100% increase)
• Lassoulis Gross Margin: >71%
• Lassoulis Capex: $3.2 billion
• Lassoulis Payback Period: <3 years
• Lassoulis Mine Life: 21 years (extendable to 30 years)
• Commodity/Equity Ratio: 55-year low
• Mining Stocks as % of Global Equities: Currently 2% (compared to 10-11% 15 years ago)
• Tether Gold Purchases: 2 tons per week

Conclusion

The Future Minerals Forum 2026 highlights a period of significant opportunity for the copper industry, driven by a confluence of factors including rising demand, supply constraints, and geopolitical considerations. Mchuan Inc. is strategically positioned to capitalize on this environment through the development of the Lassoulis project and a broader diversification strategy. While acknowledging the inherent cyclicality of commodity markets, the company remains optimistic about the long-term outlook for copper and is actively pursuing financing and development opportunities to establish itself as a major player in the industry. The potential for exponential growth, while not guaranteed, is significant, particularly given the transformative impact of AI and the energy transition.