Billionaire investor Robert Friedland has warned that a prolonged disruption of the Strait of Hormuz could hurt global mining supply chains. During Ivanhoe Mines Ltd.’s (OTC:IVPAF) first-quarter production results on Monday, Friedland, the company’s founder, noted a risk of a second-order supply crunch across metals markets.
“If the closure of the Strait of Hormuz continues, we are especially concerned about the availability of precursor materials necessary for the mining industry to continue operating,” Friedland said.
“A second-derivative effect will be on global copper production due to the shortage of the world’s most important industrial chemical, sulphuric acid,” he added.
Ripple Effect Shortage
Sulphuric acid is a critical input in mining and agriculture. Besides its role in leaching copper from oxide ores, it is a vital part of phosphate fertilizer production, which accounts for over half of global demand.
Furthermore, it plays a large role in smelting and metal processing. Copper smelting alone consumes tens of millions of tons annually. Therefore, any disruption in the supply cascades across the food and metals supply chain simultaneously amplifies inflationary …
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