America Needs Copper: Can Domestic Supply Keep Up?

As the United States seeks to strengthen domestic supply chains and support the energy transition, copper has become one of the country's most strategically important commodities. In this episode, we explore the challenges and opportunities facing US copper development, from permitting and financing to growing demand from electrification, infrastructure and AI. What will it take to build the next generation of American copper mines?

Guest Host: Lyndsay Malchuk, Global On-camera Reporter, Apaton

Featuring: Warwick Smith, CEO & Director, American Pacific Mining

Transcript

SPEAKER_00 0:00

You're listening to the AS Day Podcast, where mining meets capital, powered by one-to-one mining investment. Today we are coming live from our event in New York City. Please note this podcast is for information only and isn't financial advice or recommendation to invest. As always, the views you're here are those of the speakers.

SPEAKER_02 0:18

Welcome back to the Assay Podcast. I'm your guest host, Lindsay Melchick with Apaton Media, coming to you right from New York City. For decades, copper was viewed as a basic industrial metal, a building block of the modern economy. Today, it's something much bigger. Copper sits at the center of nearly every major trend shaping the future: electrification, AI, data centers, renewable energy, defense infrastructure, and the modernization of America's power grid. So what's the challenge here? While demand continues to accelerate, bringing new copper supply online is becoming increasingly difficult. Discovery timelines are longer, permitting remains complex, and the world is asking more from copper than ever before. So as America pushes towards energy security, manufacturing growth, and technological leadership, one critical question emerges. Can domestic copper supply keep up? Joining me today to explore that question is someone with a front row seat to the future of American resource development. Warwick Smith is the CEO and director of American Pacific Mining, a company focused on advancing high-quality mineral projects in the United States. He's built a reputation as strategic leader in the mining sector, combining capital markets expertise with a deep understanding of resource development at a time when critical minerals have become a matter of both economic and national importance. Warwick, welcome to the show.

SPEAKER_01 1:46

Thank you for having me.

SPEAKER_02 1:47

Wow, this is a big topic.

SPEAKER_01 1:48

Yeah, yeah.

SPEAKER_02 1:49

My goodness. I want to set the stage here for a moment. When you look, pardon me, at the copper market today, what keeps you up at night? What gets you excited? You know, those are two opposite ends of the spectrum, but let's start there.

SPEAKER_01 2:03

I mean, I think the thing that keeps me up at night is probably also the thing that gets me excited. I mean, look, copper is in a situation now where we've got 700 million tons of copper that's been produced since the beginning of time.

SPEAKER_03 2:16

Yeah.

SPEAKER_01 2:17

Uh, and we need another 700 million tons of copper in the next 18 years. So that's a massive challenge. So when you start to look at that and you start thinking about, you know, where's the price gonna go, you're in this massive potential bull market for copper. It is by far the commodity I'm most excited about.

SPEAKER_02 2:36

Where do you think in the cycle we are right now with copper?

SPEAKER_01 2:41

Great question. Um it's maybe second, third inning, uh, to use a baseball analogy. It feels early. Yeah um you're just starting to, in terms of like mainstream acceptance, mainstream understanding, you're starting to get that now. Yeah. I think when Trump went and initially was gonna put those tariffs on copper, the world kind of woke up to it a little bit and went, why is he doing this? Why is this happening? And then when he didn't put it on refined copper, I think that gave you some of the answers as well. And so that tweak was a tweak for the market. You saw it spike, you saw it pull back, but then you saw it slowly continue to climb and go past.

SPEAKER_03 3:21

Right.

SPEAKER_01 3:21

It's an interesting, I mean, it's a conundrum, particularly for the US.

SPEAKER_02 3:26

Yeah, you know what a great word to use, a conundrum for sure. That is exactly how you could describe it right now. And when you step back and you look at the bigger picture of it all, do you believe the market truly understands how critical copper has become?

SPEAKER_01 3:39

I think the world's beginning to understand it. Okay. Uh and I think some of that understanding has come from the reference I just made before. But the question is how you solve the problem now. Okay, I think that I'd love to, but I don't know the answer. Uh world peace. Yeah, yeah, well, we'd all like that. But say um the world's becoming more and more insular, right? And this is where, from a US perspective, they have to look inside and say, okay, you know, we're gonna be everything made in America. You better include your copper in that. And so now you gotta start pulling back permitting timelines, but still being environmentally friendly. You have to make big discoveries, which means money being put into the ground. Um, I mean, there's a lot for the US to do. I think they're taking steps from the government standpoint, are taking steps in the right direction of doing some of that stuff. Right. Project Vault is interesting. So there's all these things that they're they're trying to put in, but they're still from the CEO seat of a mining company, there's still significant challenges from time to discovery to production, etc. You're gonna just see this huge supply gap that's gonna be very difficult to fill.

SPEAKER_02 4:52

So we see it in Canada a lot. I mean, permitting timelines are just astronomical. You're looking 10 plus years sometimes. Is this is it is that the same all over America?

SPEAKER_01 5:02

It's the same in the US. I think it's worse in Canada. Um, I think this administration in the US has done an awful lot for mining and an awful lot for mining within the U.S. borders. They've really kind of looked at it and made it a priority. Um you're not seeing that in Canada at all. It's the opposite, right? And so I think it's getting better in the US. Uh, but that doesn't how you're gonna match that up against what's required just to keep life moving. I mean, your average American consumes 12 pounds of copper a year.

SPEAKER_02 5:36

Without even knowing it.

SPEAKER_01 5:37

Without even knowing it. Most people have absolutely no idea.

SPEAKER_02 5:40

No clue. Yeah.

SPEAKER_01 5:42

Yeah. Um and the US consumes uh 1.8 million tons of copper a year, but they only produce 1.1 million tons. So there's a 700 million ton deficit there that they've got to try to figure out. Particularly now. Particularly again, so this administration's been very good at looking at mining and saying, okay, we're gonna prioritize this. The other piece of the puzzle is they've been very good at closing up their borders and not wanting to deal with the rest of the world.

SPEAKER_02 6:09

This is so true.

SPEAKER_01 6:10

And so those two things are counter to each other. You need 1.8 million tons a year, you've only got production for 1.1. The rest is coming from somewhere else. The other thing is, you've only like this is kind of this is like that next shoot-a-drop piece here, is there's only two smelters in the United States.

SPEAKER_02 6:29

This is where I was gonna, yes.

SPEAKER_01 6:30

Yeah, so even if you're producing it in the United States, you're still shipping it to China where there's 16 plus smelters.

SPEAKER_03 6:37

That's right.

SPEAKER_01 6:37

Everybody ships to China and then it comes back. Hence the no tariffs on refined copper, because they'll be shooting themselves, the US will be shooting themselves in the foot.

SPEAKER_03 6:45

Right.

SPEAKER_01 6:45

I'm gonna tell you, smelters are hard to build. They're expensive. Are they? You think permitting a mine is tough? Try permitting a smelter. It you cannot just it's something you can't just turn on and go. So that's a it's a it's a big issue.

SPEAKER_02 7:00

And so are pe are are are there companies that are trying to build more smelters here? Like are is that in a process already?

SPEAKER_01 7:07

Look, I think the answer is yes, but I couldn't tell you exactly who it is off the top of my head. Absolutely. But it's something that's going to have to be done. Again, if the world is gonna become more insular, you've got to figure out ways to do it yourself. It's great to say made in America. That's that's a very easy slogan. But actually doing it is a different thing. Uh and look, smelters are serious pieces of uh engineering and are difficult to build and are very expensive to build. China is light years ahead of us on it. We're not gonna catch up on a decade. It's gonna take a lot longer to get to that point. Yeah, so you're you're smelting your copper somewhere else.

SPEAKER_02 7:42

And then you're buying it back for a cost.

SPEAKER_01 7:45

Correct.

SPEAKER_02 7:45

My goodness. Yeah. If someone stopped right now, we're gonna flip over here and we're gonna talk about the metal of the decade, which of course we're going to say is copper. If someone stopped you in an elevator and asked, why is everyone suddenly talking about copper? What would be your 30-second answer?

SPEAKER_01 8:00

Uh the world doesn't have enough of it to sustain where it is today, let alone putting together new um EV vehicles, AI data centers, etc. There just simply isn't enough copper in the world as it stands today to do all the things that we want to do.

SPEAKER_02 8:15

Aaron Powell Well, there's a there's a big controversy happening right now where the question is, it's not about the amount of copper, it's about what is being produced. And that is the biggest, you know, back and forth is we have the copper, we just can't get it out or we can't get it processed.

SPEAKER_01 8:32

I'm not even sure that that's true.

SPEAKER_02 8:34

Okay.

SPEAKER_01 8:35

To be honest. Okay.

SPEAKER_02 8:36

Um tell me more about that.

SPEAKER_01 8:39

When you think of to the statement I made off the top, that there's been 700 million tons of copper produced since the beginning of time. Okay. And you need 700 million tons to get from here to the next 18 years, there isn't enough copper in the world today. You have to make six tier one discoveries just to get to that point in the next 18 years. I think the last tier one discovery was made about eight years ago.

SPEAKER_03 9:02

Okay.

SPEAKER_01 9:03

It is not easy to find massive economic uh copper deposits, let alone find one, permit it, and put it in production.

SPEAKER_03 9:12

Oh my god.

SPEAKER_01 9:13

Your timelines there don't work. And so, look, there's copper out there, there just isn't enough of it. So it's it's like it's this kind of multifaceted problem where there isn't enough copper, and if you go and find it, you still aren't on the right timelines to get it into production. Right. It is a it's a world-class problem that we're staring down. Uh, and I'm not entirely sure how that's gonna play out.

SPEAKER_02 9:37

Well, the world is just evolving so quickly, and that's the thing, is that we don't have what is needed to keep up with it. So, you know, how much of today's demand story is driven by electrification versus AI infrastructure and data centers, do you think?

SPEAKER_01 9:50

Yeah, it's it's that's definitely a big piece of the puzzle, but I think people focus on that side and they're saying, okay, well, like we need the and data centers use a ton of copper.

SPEAKER_03 9:59

Absolutely.

SPEAKER_01 9:59

EV vehicles. So your average gasoline car takes 18 to 45 pounds of copper. Uh, a plug-in hybrid takes like 112 pounds, and then if you have like a Tesla, it's like 180 pounds of copper.

SPEAKER_02 10:12

Oh, Tesla. Yeah.

SPEAKER_01 10:14

So I think people kind of focus on that side. Windmills, same thing, they take a ton of copper. Uh AI data centers as well. But just life in general, I mean, we're consuming more copper than we can keep up with. Never mind all the electrification pieces. So when you start throwing that into the mix, that's why copper's the great play for the next decade.

SPEAKER_02 10:35

That, you know, I just you the more you talk about it, the more you're like, we're in a almost a crisis, if not a crisis already.

SPEAKER_01 10:42

Yeah.

SPEAKER_02 10:43

And there's no plan to get out of it right now.

SPEAKER_01 10:45

No, there's no plan. It it's it's because what is the plan? Like the plan has to be discovery and the plan has to be production. Um that takes aggressive exploration, uh, and that takes governments working with you on timelines to permit, to put things in production, construction, all of that. That's private and public practice working together, which is always somewhat of a challenge. Right. Um, but and shrinking timelines is never an easy thing. Particularly when you're thinking of, you know, I had this conversation with um a television show that runs on Fox, in that when I'm saying I want to shrink permitting timelines, people have to understand, right? Like, I know I've got kids, I love being in the outdoors, I love all those things. I just because I'm looking to shrink timelines also doesn't mean that I want to do something that's gonna be harmful for the environment.

SPEAKER_02 11:39

Right, absolutely.

SPEAKER_01 11:40

And I would say every CEO I know says the same thing, right? We've gotten past that point, at least internally, for the understanding of we're not taking a dollar over the environment. That's just not how we play. But you don't need 10 years, you don't need 12 years. You can still shrink that down while still doing the right things. The question is, can you get the government to agree to that? And if you can, are you gonna get past the NGO groups who are gonna sue and push back and all this? Again, it's timelines. And so all of those issues coming together present a real conundrum.

SPEAKER_02 12:15

Do you think that the government is the biggest blockage right now? Because they don't have boots on the ground, they don't understand, they don't really comprehend the crisis that we are running into right now.

SPEAKER_01 12:25

Depends which government you're talking about. In Canada, certainly the case. Um Canada's been far left for a long time, um, anti-mining, uh anti-investment in their own country. I could do a full podcast on my feelings of that. Um the US, again, for this, there's lots of things that you can be critical about for this administration, uh, but for mining, they've been good.

SPEAKER_03 12:49

Okay.

SPEAKER_01 12:49

They seem to understand the importance, uh, and they've really put a spotlight on it as well, uh, which is giving it more uh local understanding. So they've been they've been very good for that.

SPEAKER_02 13:02

Well, they're wanting to stockpile. I think every country is now getting to the point where they wanted they need to stockpile in their own country.

SPEAKER_01 13:08

Yeah. So when you talk about something like Project Vault, which is stockpiling um different critical metals, which is gonna include copper, um, you saw Robert Freeland standing with Donald Trump when they announced it. So um metals start trading unnaturally when governments stockpile them.

SPEAKER_02 13:27

100%.

SPEAKER_01 13:28

And so you I don't think we've seen that yet. Uh, but you know, if you look at the chart on copper, uh, if it was your uh stock price, you'd be happy because you're top right and you're you're you're gonna keep going.

SPEAKER_02 13:41

That's true. You know, is there a risk that the market is still using yesterday's assumptions for today's forecast?

SPEAKER_01 13:48

Great question. Yes. Um I think that's entirely accurate. Okay. Because people aren't factoring in. Although there's a lot of talk about the data centers. Right. And there's a lot of talk about EVs and all these types of things. Um, people don't, and and and copper isn't the top of consciousness for most people. Obviously, it is for us because it's the business we're in. But when you're thinking of, oh yeah, I want to get myself a Tesla or, you know, these data centers or all this, it's great. They take copper. And if they don't have copper, they don't work. You can't replace it, you can't use something else. So that is becoming more top-of-minded consciousness, but it's not there today. And people are still looking at it and saying, okay, well, you know, XYZ mine is going to produce so much, what have you. Grades are declining on those mines, especially the bigger mines. You're getting a lower grade, you're getting deeper, it's getting more expensive. Okay. There haven't been the discoveries to uh counteract that and put those new mines online. It's harder to find.

SPEAKER_03 14:47

Yeah.

SPEAKER_01 14:47

Um and the world's looking internally through its own borders. Uh I mean it spells disaster. It really does. Unless you find it.

SPEAKER_02 14:54

I think we are then in the in in the risk height right now. Are we in the red or are we sort of in green-yellow-ish still?

SPEAKER_01 15:02

I mean, from my personal view, I think we're in the red. Okay.

SPEAKER_02 15:06

Um but have back that for us.

SPEAKER_01 15:09

I just don't see where you're gonna get it.

SPEAKER_02 15:11

Okay.

SPEAKER_01 15:12

I just don't see it.

SPEAKER_03 15:13

Okay.

SPEAKER_01 15:13

I mean, we're looking, so my company is focused in the US. We're looking to make these discoveries.

SPEAKER_03 15:21

Okay.

SPEAKER_01 15:22

We're actively drilling, we're actively going after high-grade copper assets. That's one of the things that we're doing.

SPEAKER_03 15:28

Okay.

SPEAKER_01 15:28

And I'm sitting here telling you there isn't enough copper on the world, and particularly in the United States. And that's the job that I'm doing. So we have a you know an innate understanding as to what it's gonna take to get to that place. But I have a very tough time seeing how this all plays out without copper being exorbitantly expensive, which will slow everything down. Uh, and that's gonna be problematic. Again, particularly for the United States.

SPEAKER_02 15:55

It's particularly so you do have a lot of conversations with people across border then, too. What's the consensus across Canada, the US, and everywhere else actually, that's also doing copper?

SPEAKER_01 16:06

Yeah, so Canada is unique.

SPEAKER_02 16:07

Um we really are.

SPEAKER_01 16:09

I mean, we really are. We really are. Yeah. The it's a it's a bury your head in the sand mentality uh in Canada, at least for the moment. And although there's been a lot of talk of signing MOUs and all this type of thing, nothing's actually been done. So that's a that's a problem waiting to happen. Canada could be the wealthiest country in the world. It has everything you need. It has oil, it has copper, it has gold, it has lithium. Yeah. It has if you if you responsibly opened up and got moving, Canada could be the richest country in the world.

SPEAKER_02 16:46

Very resource-rich.

SPEAKER_01 16:47

Very resource-rich.

SPEAKER_02 16:48

Yeah.

SPEAKER_01 16:48

Uh opportunities all over the place. Uh but we know. We stand in our own way. We stand in our own way.

SPEAKER_03 16:53

Yeah.

SPEAKER_01 16:54

We stand in our own way. The US is much better at that. Uh, and they're they're certainly taking these forward steps, which is important.

SPEAKER_02 17:02

Fair enough.

SPEAKER_01 17:03

For the rest of the world, um, Latin America is somewhere that's very copper rich, big mines, big opportunities. Uh, every country is different there. Same with Africa, is somewhat the same. Um, again, every country is slightly different. So it would take a while to kind of go through all of it. Yeah. But from a North American standpoint, it's gonna be a challenge.

SPEAKER_02 17:25

It's gonna be a challenge. What is one thing that you would say to an investor coming into the copper space right now?

SPEAKER_01 17:31

Great timing.

SPEAKER_02 17:32

Right. Well done.

SPEAKER_01 17:34

Yeah, it is it's it's certainly to me the trade of the decade. And that's gonna factor through um not just the metal itself, but really well-run companies are gonna see those. I mean, if you look back to that that super cycle, they called it from like 2004 through to 2007 before the 2008 crash, you saw lots of these companies, 10x, 20x, 30x, the good comp the good copper companies, particularly the small ones, uh, that are able to make discoveries. Okay, you're going to get the opportunity to see those types of returns. Uh and so pick wisely.

SPEAKER_02 18:12

Here we go.

SPEAKER_01 18:13

But this is this is that opportunity. Because when in in great demand will create great price inflation, and those those companies that are able to make discoveries will be heavily rewarded.

SPEAKER_02 18:28

Amazing. Well, what a great conversation. I know that we could probably keep going for sure, for sure. So we'll have you back again.

SPEAKER_01 18:34

I would love that.

SPEAKER_02 18:35

Okay. Sounds good. It's easy to talk about the technologies that are transforming our world. It's much harder and perhaps more important to think about the raw materials required to make that future possible. As investors, industry leaders, and policymakers continue to focus on energy, infrastructure, and innovation. Perhaps the question isn't whether we'll need more copper, it's where that copper is going to come from and whether we're prepared to build the supply chain required to support the future we're working so hard to create. Because if copper truly is the foundation beneath the next generation of technology, of energy, and economic growth, then the companies discovering and developing that supply today may play a much larger role in tomorrow's economy, more so than many people realize. Now remember, these are the opinions of our own with possible vested interest in any or all of the companies we maybe speak of. Do not use this as financial advice. Always be sure to speak with a licensed financial advisor and know your own risk tolerances. I'm Lindsay Melchak, your guest host with Apaton Media Media, coming to you right here from New York City. Make sure you stay with us. There's more to come.

SPEAKER_00 19:38

Thanks for listening to the Assay podcast, where mining meets capital, powered by one-to-one mining investment. Subscribe for new episodes and visit theassay.com to stay close to the conversations shaping global mining and investment.