Rick Rule: The Coming Copper Price Shock

**Rick Rule** (0:00)
We have under-invested in copper, in all phases of copper, for 30 years. We've under-invested in exploration. We've under-invested in permitting. We've under-invested in process and technology. We've under-invested in mine construction.
And this is a capital-intensive business with very, very, very long lead times. There is nothing, Adam, that we can do as a species in the next five years that will reduce the probability that the balance of supply and demand in copper is met by rationing by price. There is nothing that we can do that will prevent the price of copper in real terms, not nominal terms, from increasing over five years to the point where copper has to be rationed by price. Nothing that we can do.

**Adam Taggart** (0:56)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Welcoming you here for a very special discussion with my very good friend, the legendary natural resources investor, Rick Rule. And we're here to talk about all things copper because Rick has a copper bootcamp coming up in just a few days. This is coming weekend. Rick, thanks so much for joining us. How you doing?

**Rick Rule** (1:18)
Adam, I'm doing very well. To be honest, the better for being on with you. Thank you for having me back.

**Adam Taggart** (1:23)
Yeah, you're such a, I was going to say a silver-tongued charmer, but maybe I'll say a copper-tongued charmer at this point in time. So you've got this new bootcamp coming up this weekend on copper, proving as your bootcamps oftentimes do to be extremely timely.
So let's talk about that. And I'm sure I'll ask you some related questions about commodities and hard assets and the impact that the Iran war is having on all this stuff. But I believe you scheduled this bootcamp before any of the events going on in Iran. Why copper and why now?

**Rick Rule** (2:03)
Well, we had no sense of the timing, to be honest with you.
Normally, our bootcamps are chosen by the students at the rule classroom and by attendees at prior bootcamps. So this was a circumstance, Adam, where we just plain got lucky.
And I really think we're lucky. I will get into more about the bootcamp later. But in terms of the timing, I think we have a situation right now where copper demand has been muted by an economy that's been softened by the Gulf War.
The copper quote has also been muted until the last few days by rising interest rates and the fact that people who had ordered copper three or four months ago found the carry tough to finance, so they were selling it. We have a situation where pricing in copper equities and pricing in copper itself is softer than it otherwise would have been, allowing us to buy the reality that we'll discuss five years from now at a discount to the price that we would have paid for it three months ago, which I just think is ridiculously lucky. I'd love to say, Adam, that I had all this sort of scoped out in advance. This was a consequence of some investing algorithm, which I had proprietary access to and could make available for a fee. All of that would be a lie. We got lucky. So let's talk about the boot camp. First of all, as you know, Adam, we've been doing them for, I don't know, four or five years. Boot camps are eight hour long, very detailed, day long, deep dives into one topic or another around natural resource investing. The idea is to give the listeners enough of a background in the subject, that they can begin the process of organizing and managing a portfolio in that subject. They're meant to be used in conjunction with the Rule classroom, which has over 300 hours of instructional programming, which is free. The idea is that we give you an overview of a subject and we give you specific tools, and we augment the tools for free at the Rule classroom. This is a warning. You need to participate. You need to meet us halfway. You need to spend eight hours at the boot camp, and then you need to employ the lessons that we teach you in the boot camp in order to make money in copper.
It's important that you know that. So what do we do? We get together experts whose utility in a subject has been proven to me over 40 years in a market. In other words, we bring together staff that have, at least as far as I'm concerned, track records and value in the subject that have been obtained over 40 years. We pay real attention to curriculum. In other words, rather than having three high quality people talk about one aspect of copper, we try to have four or five aspects around copper that will give you a fully rounded course and give you the best people available. So as an example, a special treat for the copper boot camp, we have Robert Friedland, the single most successful resource entrepreneur that I have known in my life, the person who has made the most difference in mining of any single person that I have been involved with in the last 50 years, who is enamored of copper, and by the way, who has found a lot of it. He was responsible for assembling and financing the team that discovered Oia Tolgoi, the fifth largest copper mine in the world. He is also responsible for finding, financing, and putting into production Kamoa Kakula, the most important new copper mine in the last 20 years, a remarkable achievement. Discovered in a war zone in the Congo, brought in Chinese partners, the only people who could finance it, built the first grassroots smelter in Africa in 25 years. This is a human being who has done more for the copper business than any other single person I know. Talking about copper, talking about the world, these are all superlatives. And this person embodies them all. I always suspect that listening to Robert Friedland for an hour is worth the cost to admission. But as they say in publishing, but wait, there's more.