Author: admin heyokha

Look around you. It holds your soda. It wraps your leftovers. It makes up the engine block of your car and the fuselage of the plane you fly out in.

We treat aluminum as disposable. It is the third most abundant element in the Earth’s crust, effectively the “cheap, cost-effective, and highly abundant” of the metal world.

But there was a time when this metal was the ultimate flex.

In the mid-19th century, aluminum was more valuable than gold. Because it bonds so tightly with other elements in nature, refining it into pure metal was nearly impossible. It was so rare that Emperor Napoleon III of France reportedly held dinner parties where the most honored guests were given aluminum cutlery, while the “lesser” nobility had to suffer the indignity of eating with mere gold and silver forks.

The obsession didn’t end in France. When the Washington Monument was completed in 1884, the U.S. government capped it with a 100-ounce pyramid of solid aluminum. It wasn’t just structural; it was a statement of industrial might. At the time, a pound of aluminum cost about $16, roughly $419 in today’s money.

The aluminum tip is placed atop the Washington Monument on Dec. 6, 1884 in a contemporary illustration.

Source: National Park Service, NPR

Then, everything changed. We discovered how to use massive amounts of electricity to refine it. The price crashed, and aluminum became the building block of the modern world.

But today, the pendulum is swinging back.

For the first time in a century, the era of cheap, infinite aluminum is over. The price has surged past $3,000 per tonne, not because the metal is rare, but because the global economy physically cannot respond. The supply is being killed by a hard cap in China, a drought in Africa, and a western industrial base that has forgotten how to build.

Aluminum hits above $3,000, which is a price not seen since 2022

Source: Bloomberg

We are not facing a temporary shortage. We are facing structural rigidity.

You don’t have to guess; the numbers tell the story. Look at the global supply-demand balance.

Since 2021, the market has been trapped in a persistent deficit. We haven’t seen a surplus in five years.

• 2024: A deficit of 544,000 tonnes.
• 2025: Deficit widening to 591,000 tonnes.
• 2026 (Projected): The deficit blows out to 843,000 tonnes.

Note: The electrolytic aluminum demand figures above include the demand for electrolytic aluminum used in recycled aluminum production.

Source: SMM, CRU, Huatai Research Forecast

 

Demand is growing steadily where it’s up around 2.3% YoY, but supply is hitting a ceiling where growth is slowing to just 1.9%. When demand outpaces supply for half a decade, inventories vanish, and prices explode.

The Death of Elasticity

Elasticity just means when prices rise, supply usually expands to meet it, but it’s looking tougher with this pro-longed deficit. To understand why we are in a deficit, you have to look at the breakdown of the world’s supply engine: China.

For twenty years, China was the world’s “swing producer.” Whenever the world needed more metal, Beijing built a coal plant and a smelter. That valve has been welded shut.

• The Hard Cap: The government is strictly enforcing a 45 million tonne capacity cap to curb pollution. They physically cannot legally build more smelters.
• The Internal Black Hole: Worse, they are no longer exporting their surplus. The new “Two New” stimulus policy (a massive trade-in program for old appliances and industrial gear) is sucking up that metal domestically. China has flipped from the world’s factory to the world’s consumer, and they are keeping their metal for themselves.

How can the rest of the world catch up to China?

Source: International Aluminum Org

The Western Supply Shock

While China locks its doors, the Western supply chain is snapping.

In March 2026, South32’s Mozal smelter, a giant facility responsible for supplying nearly 20% of Europe’s aluminum imports, is shutting down.

Why? Not because it isn’t profitable. But because of a severe drought in the Zambezi basin and a failed negotiation with the local utility. That is 560,000 tonnes of metal vanished from the market overnight, leaving Western buyers scrambling.

This isn’t an isolated incident. It is a symptom of a western industrial base that is crumbling. In the U.S. and Europe, high operating costs have already forced half of all smelting capacity offline since 2021. Those plants aren’t coming back.

The Demand Renaissance: Not Your Grandfather’s Foil

While supply is hitting a brick wall, demand is undergoing a quiet revolution. Aluminum is no longer just about soda cans and window frames. It has become the “lightweight champion” of the energy transition.

1. The EV Diet Plan Electric vehicles are heavy. Batteries weigh thousands of pounds. To get decent range, automakers have to strip weight out of everything else. That means swapping heavy steel for light aluminum. An EV uses roughly 200kg of aluminum, which is 50% more than a gas car. As EV adoption grows, so does the baseline demand for the metal.
2. The Poor Man’s Copper Copper prices have skyrocketed, making it too expensive for many industrial uses. With the copper-to-aluminum price ratio hitting a 20-year high (4.1x), manufacturers are switching to aluminum for wiring and cabling wherever physics allows. It is the “substitution trade” of the decade.
3. The Skeleton of AI Even the digital world needs physical bones. The massive buildout of AI Data Centers isn’t just about chips; it’s about the chassis, the racks, and crucially, the cooling systems. Aluminum is the material of choice for heat sinks and thermal management because it dissipates heat efficiently. Every new data center coming online is effectively a massive structure of aluminum piping and plating.

Aluminum is now 4x cheaper than Copper

Source: Bloomberg

The Investor Takeaway

We leave you not with a forecast, but with a dilemma.

The world is betting its future on the exponential growth of digital intelligence (AI) and the green transition (EVs). Both of these revolutions are physically built out of aluminum. Yet, the energy and geopolitical systems required to produce that metal are flashing red.

This disconnect forces us to ask tough questions about how—or if—this gap can be bridged:

• Can we recycle our way out? Secondary aluminum (scrap) requires 95% less energy than primary smelting. Is the world ready to build the sophisticated supply chains needed to turn old cars into new data center racks, or will the quality mismatch be too high?
• Is the “China Cap” a ceiling or a lever? Is the 45 million tonne limit a hard environmental line in the sand, or is it a geopolitical tool that Beijing will release once the price hurts Western manufacturers enough?
• The Substitution Trap: At what price does the AI industry stop using aluminum? Is there even a viable alternative for thermal management that is scalable, or is this metal the non-negotiable “bones” of the digital age?

Think about it this way: If aluminum hits $5,000/ton, do auto companies delay their EV models launch? Do tech companies slow its data center buildout? Or do they just eat the cost and pass it to consumers?”

Something has to give. Will it be the environmental goals, the profit margins, or the pace of the buildout itself? For the observant investor, the answer to that question will define the next commodity supercycle.

 

 

Tara Mulia

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We are currently witnessing the largest capital expenditure in the history of technology. Hundreds of billions flowing into a machine designed to create infinite digital abundance. It looks like a paradox: Why fight a resource-heavy war over a technology that promises infinite digital abundance?

The answer lies in a lesson history has taught us repeatedly: Abundance does not mean equity. The neighbors fighting over the orange tree aren’t fighting for the fruit; they’re fighting to decide who owns the fence around the orchard.

Source: Accenture

The Logic of Control

The reason nations are hoarding chips and energy isn’t because they don’t believe in the abundance AI will bring. It’s because they don’t trust how it will be distributed.

History is littered with technologies that created massive surplus value, only to have that value concentrated in the hands of whoever owned the pipes.

• The Printing Press made information cheap; publishing houses became gatekeepers.
• Railroads made transportation cheap; railroad barons became oligarchs.
• The Internet made distribution free; platform monopolies became trillion-dollar rentiers.

 

The lesson is clear: New technologies don’t make old power structures obsolete. They get captured by them.

The question isn’t whether AI will make intelligence cheap. It is whether that cheap intelligence will be a public utility or a rentier’s monopoly. Right now, tech giants have been spending $427 billion on infrastructure in 2025 alone, and nations and corporations are betting trillions on it as well. They are securing their position not for a world of scarcity, but for a world where controlling the infrastructure of abundance is the new form of power.

For perspective, $427 billion is the size close to Norway’s entire GDP

Source: RBC Wealth Management

The Current Battlefield: Strategic Stockpiles

This shift has created a “Wartime Economy” for physical assets where nations have stopped viewing compute as a commercial service and started viewing it as a strategic reserve.

If you look at the global map, the chess pieces are moving to secure the two things AI consumes. Energy acts as the calories, and Rare Earths serve as the vitamins. The diplomatic maneuvering behind these acquisitions is geopolitical calculus rather than casual cooperation.

Read more on our Think Pieces and Reports page

1. Three Mile Island: When AI Resurrects the Dead

In September 2024, Microsoft struck a deal that crystallizes just how desperate the energy situation has become: a 20-year power purchase agreement to restart Three Mile Island—yes, that Three Mile Island, site of America’s most notorious nuclear accident in 1979.

The reactor being restarted (renamed “Crane Clean Energy Center”) wasn’t part of the 1979 meltdown, but it had been shut down in 2019 for economic reasons. Now, with AI driving unprecedented electricity demand, what was economically unviable five years ago has become strategic necessity.

Here’s where government got involved: Pennsylvania Governor Josh Shapiro personally pushed for the project to be fast-tracked through PJM Interconnection’s grid approval process. Normally, power projects languish in PJM’s queue for years. Crane was the largest project ever expedited by PJM, cutting the timeline from an expected 2028 restart to 2027.

Then in 2025, the Trump administration’s Energy Department announced a $1 billion federal loan to support the restart. This is explicit government backing to resurrect a dormant nuclear plant exclusively to power Microsoft’s AI data centers.

This isn’t economic development. This is the government treating AI infrastructure like wartime production, fast-tracking approvals and deploying federal capital to ensure the power doesn’t run out. When you’re restarting nuclear reactors mothballed for safety concerns, you’re not optimizing—you’re scrambling.

 

2. Greenland: The Fight for Vitamins

Greenland represents the other half of the equation. As we analyzed in “The Grandmaster’s Gambit,” the island is a fortress of strategic necessity because of its critical minerals.

AI data centers require advanced cooling systems and high-performance magnets, which rely on rare earth elements like neodymium and dysprosium. China currently dominates roughly 90% of the processing for these minerals and 94% of rare earth magnet manufacturing. This leverage is a structural vulnerability that Western policymakers are desperate to close.

If China cuts off rare earth exports tomorrow (as they did during the 2010 rare earth crisis with Japan), Western AI infrastructure stops scaling. Not gradually. Immediately.

To counter this, the Trump administration announced Project Vault, a $12 billion strategic minerals stockpile designed to fortify supply chains. The goal is to treat Greenland and similar upstream sources as insurance against geopolitical supply disruptions. A supply chain that does not control its rare earth inputs cannot guarantee uninterrupted AI manufacturing.

 

3. Pax Silica: The Allied Supply Bloc

Beyond unilateral stockpiling, we are seeing the formation of a “NATO for Supply Chains.”

In late 2025, the U.S. and allied nations convened the Pax Silica Initiative. This coalition includes Japan, South Korea, the Netherlands, and the UK. Their goal is to build a resilient global silicon supply chain that spans from upstream minerals to data centers.

This initiative is explicitly positioned to protect against coercive dependencies—to ensure China can’t use rare earth leverage the way Russia used gas pipelines. It creates a collective stockpile and innovation infrastructure regime constrained by allied trust networks rather than free market arms races.

But there’s a vulnerability: the “America First” imperative. What happens when U.S. priorities clash with Japanese or Korean interests? Can partners be assured their access won’t be cut off when Washington changes course? This is the tension nobody wants to discuss publicly, but it’s the fault line that could fracture the coalition.

Some diplomacy had to be involved but can partners be assured the “America First” agenda imperative won’t overshadow efforts?

Source: U.S. Department of State

China Isn’t Sitting Idle

While the West scrambles to diversify supply chains, China is doubling down on its advantages.

1. Export Controls as Strategic Leverage

China has moved beyond simple export policy tweaks to use export controls as a tool of industrial diplomacy:

• April 2025: China placed seven medium and heavy rare earth elements including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium under an export-control licensing regime. This requires government permits for exports and gives Beijing bureaucratic discretion over flows.
• October 9, 2025: Beijing announced a much broader set of export controls covering additional rare earths, associated technologies, and related materials, including five more medium/heavy rare earths (erbium, europium, holmium, thulium, and ytterbium) and even materials/tech that have downstream industrial applications.
• November 7, 2025: China paused implementation of many provisions of the October export-control package through Nov 10, 2026 under an agreement with the United States, effectively creating a temporary suspension, not a full rollback. The underlying licensing requirements and levers of control remain in place, and China continues to control the vast majority of processed rare earth exports.

What this means:
Rather than an outright ban, China now works with a licensing and procedural regime that gives it a scalable strategic lever. Even during the “pause,” China retains control over rare earth export licenses and can tighten or relax terms as geopolitical conditions evolve.

Source: IEA

2. Supply Chain Leverage and Global Flows

China’s dominance in rare earths remains remarkable:

• China accounts for over 90% of processed rare earth supply globally, a concentration that gives Beijing outsized influence over global magnet, EV, and high-tech supply chains — even if controls are not always actively tightened.
• Western governments and firms remain acutely aware of this leverage: critics warn China could return to more aggressive export behavior once temporary suspensions lapse.

Source: Statista

3. Domestic Stockpiling + Recycling as Resource Security

While precise numeric targets like “75% of global battery materials recycled by 2030” are difficult to verify in authoritative public policy documents, the direction of travel is clear: China is scaling recycling into a strategic extension of its critical minerals dominance.

• China is rapidly expanding its battery recycling industry, with forecasts showing strong growth through 2030 and expectations that it will remain the global leader in recycling market share.
• Installed recycling capacity was already in the multiple-million-tonnes per year range by 2024, positioning China as the world’s hub for end-of-life battery processing.
• Chinese firms and state-linked enterprises are building global recycling footprints, partnering internationally on recycling centers and after-sales recovery networks.
• Most importantly, Beijing has begun formalizing this into national industrial architecture: the China Resources Recycling Group Co., Ltd. (CRRG) was established in 2024 as a central, state-backed recycling platform spanning batteries, metals, and e-waste.

A state-owned recycling champion is a tell: China isn’t treating recycling as ESG. It’s treating it as resource security. If Beijing can control not just mining and refining, but also the “second mine” of end-of-life recovery, it can keep domestic industry fed while retaining long-term leverage over global supply chains.

The Real Bet

The question isn’t whether AI creates abundance. It’s who controls access once abundance arrives.

And they’re probably right.

You can have the smartest AI in the world. But if you don’t have the kilowatts to run it, the chips to scale it, the rare earths to cool it, or the legal sovereignty to control it, you’re a client state.

They’re not fighting over intelligence. They’re fighting over who gets to set the terms once intelligence is abundant.

And when intelligence is abundant, infrastructure is and will be the bottleneck.

 

 

Tara Mulia

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The Canvas Bag Theory of Markets

If you want to understand why gold just hit an All-Time High of $5,500, don’t look at the Federal Reserve’s balance sheet. Look at a $4.99 (IDR 83,000) canvas bag.

Last year, Trader Joe’s released a mini canvas tote bag. It was functional, simple, and cheap. It also caused grown adults to line up at 5:00 AM, fight in aisles, and resell them on eBay for $500. In London, Tokyo, and even close to home here in Jakarta, the bag became a status symbol. Why?

FOMO (Fear Of Missing Out).

It wasn’t about the canvas. It was about the crowd. When everyone else is running toward something, it’s very much human instinct to feel we should probably run that way too.

Even the normal tote bags are being sold upwards of $950. Now that’s a 200x return!

From Aisle 4 to Asset Class

This same psychological contagion is now bleeding into the gold market.

A few months ago, buying gold was for central banks and “doomsday preppers.” Today? It’s the topic that no one could stop talking about all day even during your most mundane routines. One of our team members shared his badminton buddies started asking if they should pile in. My grandpa who comes to visit every weekend also started asking if gold could go higher instead of what to eat for Sunday brunch.

We saw the preview of this last year in Asia and Australia. In Sydney, buyers at ABC Bullion were sleeping overnight on the pavement just to be first through the door when the shop opened. In China, young Gen Z buyers started buying “gold beans” (tiny gram-sized nuggets) because they stopped trusting savings accounts.

The gold beans that went viral in China. Very demure, Very cutesy, and Very Gen Z

Image source: Bloomberg

Here in Jakarta, there are recounts of people staying overnight in front of gold shops since 9pm to place their names in an queue honor system piece of paper

Image source: CNA

When people who have never owned an ounce of metal suddenly feel the itch to buy at all-time highs, it signals a shift. But it also signals danger. When you buy on emotion, you sell on panic.

Navigating the Vertigo

The question on everyone’s mind has shifted from “Should I buy?” to “Is it crashing?” now that we’ve seen a sharp correction.

Buying or holding at these heights feels unnatural. It feels dangerous. It gives you vertigo.

But let’s look at another feat of vertigo. Just this week, Alex Honnold (the climber from Free Solo) free-soloed the Taipei 101 building. No ropes. No safety net. Just him, 508 meters of glass and steel, and a crazy short 90-minute climb that the world watched with sweaty palms.

 

 

 

 

 

 

 

 

 

 

Images source: Netflix

To the average person, looking up at the 101st floor looks insane. It looks like a death wish. But to Honnold? It was just math, physics, and preparation. He didn’t climb it because he was reckless. He climbed it because he had studied the “bamboo boxes” of the structure. He knew exactly where the holds were, and more importantly, he knew what to do if he slipped.

Navigating this gold market requires that same “Honnold Preparation.”

The chart looks intimidating. The drop looks scary. But if you have done the homework, you realize that the fundamental structure hasn’t changed. You aren’t just reacting to a price tick; you are looking at a repricing of the dollar itself. As we wrote in our previous reports, when the currency is being debased, the price of real things has to go up even if the path there is bumpy.

If the Metal Scares You, Look at the Dirt

If buying the metal at these levels still gives you too much vertigo, there is another door open: the miners.

Think of gold mining like a neglected apple orchard. For years, investors ignored it, so no new trees were planted. Since 2018, production largely flatlined, but the high prices are finally acting as fertilizer. The latest data shows Q3 2025 mine production hit a quarterly record of 977 tonnes (up 2% year-on-year), putting 2025 on track to set a new all-time high for annual output.

Source: Heyokha Research

The orchard is waking up.

1. The Margin Explosion: The Average All-In Sustaining Costs (AISC) for miners hover around $2,250/oz, making the math undeniable. With gold at $5,500, miners are pocketing a record spread of nearly $3,000 per ounce. A 1% rise in gold can now drive a 2–3% jump in miner valuations.
2. The Hidden “Option” Value: Higher prices turn “waste rock” into “wealth.” Take Barrick Gold—their latest report showed a 23% jump in gold reserves (adding ~17 million ounces). They didn’t magically find new deposits; the higher price just made the old rock profitable to dig up.

While the crowd fights for physical bars, the smart money is quietly buying the companies that own the dirt.

Preparation Over Panic

The old safety net of the 60/40 portfolio of stocks and bond is fraying. With U.S. interest payments now exceeding defense spending, bonds aren’t the safety rope they used to be.

If you are feeling that itch to buy or the urge to panic-sell because of the correction, don’t just follow the crowd with the tote bags. Do the prep.

Alex Honnold didn’t start climbing until he had mapped every inch of the route. You shouldn’t allocate capital until you’ve done the same.

• Read our deep dive: Gold: The Return of Real Money

You can access and browse all our past reports here:

• Think Pieces
• Reports

The climb might look high, but the view from the top is worth it. Just don’t forget to bring your own bag.

 

Tara Mulia

For more blogs like these, subscribe to our newsletter here!

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The Opening: A Musical Flop and a Geopolitical Stage

In 1986, ABBA’s Benny Andersson and Björn Ulvaeus teamed up to write Chess, a musical about the Cold War where the board served as a metaphor for superpower rivalry. Despite the catchy score, the production was a flop. It struggled to balance human drama with the cold machinery of global politics.

Caught the Broadway production in December. Full house. It seems American audiences can feel the geopolitical temperature rising. Suddenly, this musical feels less like history and more like a preview

Fast forward to 2026, and we are watching a new production on the global stage that is anything but a song and dance. President Trump has officially signed the charter for the “Board of Peace” at Davos. While it was initially pitched as a mechanism for Gaza’s reconstruction, the charter signed this January reveals a much broader mandate: to “promote stability” and resolve international conflicts.

While the name sounds diplomatic, the mechanics are novel. Permanent membership on the board reportedly requires a $1 billion contribution, and the charter grants “Chairman Trump” sweeping authority, including veto power over resolutions. It is a bold attempt to create a “nimble” alternative to the United Nations. However, in a game of chess, you need players willing to sit at the table. While over 20 nations like Saudi Arabia, Turkey, and Indonesia have signed on, heavyweights like France and Germany have declined, citing concerns over undermining the UN. Right now, much of the world is busy building their own boards.

The Thesis: The Empire Strikes Back

It is easy to dismiss Trump’s headlines: buying Greenland, slapping 25% tariffs on neighbors, proposing grand peace boards: as eccentric noise. But what if they aren’t random at all?

At Heyokha, we see these moves as a coherent strategy to build a resource-based American empire in a de-globalizing world. Trump isn’t just making deals; he is attempting to lock down the hard assets: land, energy, and minerals: required to survive the end of the “just-in-time” global order.

Remember this post that the White House did last year?

Why Greenland Was the Opening Move

In 2019, the world laughed when Trump suggested the U.S. buy Greenland. But as Trump wrote in The Art of the Deal, “Location is everything.”

Maybe we should brush up and read the “Art of the Deal”. Cover image is from our blog – “Art of the Deal” Tops Amazon as Tariffs Stirs Comedy and Chaos

 

Even though the Greenland talks have now subsided into a formal framework for cooperation, the underlying intent of the original ‘buy’ offer to secure resources remain.

Greenland isn’t just ice; it is a fortress of strategic necessity:

• Critical Minerals: The island holds massive reserves of rare earth minerals (estimated at 1.5 million metric tons, with some deposits reaching 28 million metric tons). These are the vitamins of modern defense and technology, and China currently dominates roughly 90% of global processing.
• Arctic Shipping Lanes: As sea ice declines, the Northern Sea Route offers up to 40% savings in time and cost for shipping between Asia and Europe. Controlling this “Polar Silk Road” is a generational prize.
• The AI Power Race: As we explored in our AI Curveball blog, the bottleneck for AI is no longer just code; it is energy and cooling. Greenland’s massive hydro potential and Arctic climate make it a “sovereign heat sink” for the data centers of the future.

 

This isn’t real estate speculation; it is Monroe Doctrine 2.0. It is a move to secure the Western Hemisphere’s physical supply chain. As we noted in The Price of Sovereignty, in 2026, safety isn’t measured just in missiles, but in who owns the warehouses of food, fuel, and the resources needed to win the AI race.

The “Board of Peace” vs. The Board of Reality

Trump’s “Board of Peace” pitch fits this empire-building mold: a transactional attempt to manage global stability from a position of top-down strength. But the board has changed since 1945.

We aren’t in a unipolar world anymore. As highlighted in our report on De-dollarization, nations like the BRICS bloc are actively building parallel financial rails to bypass the dollar. They’ve seen the U.S. weaponize the dollar against Russia, and they are opting out of the game entirely. You can set up a “Board of Peace,” but it’s hard to play when half the grandmasters are leaving the tournament to start their own league.

The Bill for the Empire

This brings us to the most uncomfortable truth. Empires are expensive.

While the strategy to secure hard assets like Greenland makes geopolitical sense, the balance sheet tells a different story. In FY 2025, the U.S. federal government spent $970 billion on net interest alone. This exceeded national defense spending ($917 billion). When you combine interest payments with mandatory entitlements (Social Security and Medicare), these costs are essentially consuming the vast majority of federal revenue, around 92%.

How is this sustainable?

 

Think about that. Nearly every dollar the government collects is swallowed up just to service past debt and keep the lights on for mandatory programs. That leaves almost nothing for defense, infrastructure, or buying massive islands. The U.S. is effectively trying to finance a 19th-century style expansion with a balance sheet that looks like a distressed tech startup.

The Investor Takeaway

We have been writing about this shift for years: from our Gold: The Return of Real Money report predicting the flight to hard assets, to our analysis of the debt spiral from the report. The “Trump Trade” isn’t just about lower taxes; it’s about a turbulent transition from a paper-based global order to one backed by hard resources.

When a superpower tries to reassert control while drowning in debt, the currency is usually the casualty. That is why central banks are hoarding gold at record rates. They know the cost of maintaining this empire is likely to be paid in inflation.

The End Game

As the U.S. races to lock down Arctic shipping lanes and mineral deposits, the picture is becoming clear. Trump may be playing a winning hand on the geopolitical chessboard, but the financial clock is ticking louder than anyone admits.

The real question isn’t whether America is building a new empire: it’s whether the American people realize they are financing one they can no longer afford.

 

Tara Mulia

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Something big happened. And no, we’re not talking about the dramatic military footage from Caracas. That was the trailer. The real story is about systems: who runs them, who controls access, and how trust in those systems is unraveling in real-time.

For decades, the petrodollar system anchored U.S. financial dominance. It was never about just oil, it was about trust. Trust that global trade would run through U.S. dollars. Trust that national borders would be respected. Trust that rule of law, not rule of force, governed the world’s financial plumbing.

That trust just took a direct hit.

If you need a refresher of the events that transpired

Source: Al Jazeera

Venezuela Was Never About Venezuela

Let’s get one thing out of the way: Venezuela’s importance isn’t about what it produces now, it’s about what it could produce and who controls it.

Officially, Venezuela sits on the world’s largest proven oil reserves, an estimated 300 billion barrels. To put that in perspective, that is more than Saudi Arabia that holds an estimate of 267 billion barrels. Yet, the nation’s actual output has cratered:

• Peak (Early 2000s): ~3 million barrels per day (bpd).
• Today: Struggling to stay above 800,000–900,000 bpd.

Infrastructure is decaying. Expertise has fled. Most foreign players, save Chevron, were kicked out long ago. And yet, the U.S. is back.

Why?

Because even if Venezuela’s current output is minimal, it possesses the specific “heavy sour” crude needed by U.S. Gulf Coast refineries to optimize margins. However, the narrative that the U.S. can simply “turn on the taps” is a logistical fantasy.

The Dollar’s Soft Power Turns Hard

For years, the game plan was “isolation through paperwork.” Washington used sanctions to lock Venezuela out of Western banks and U.S. capital markets. It didn’t work.

Caracas simply built a “parallel plumbing” system to bypass the dollar. They rerouted trade through shadow fleets and leaned on Beijing for survival.

The China Play: Between 2007 and 2015, China funneled $60 billion into Venezuela. But Beijing isn’t a charity—they’ve spent the last decade quietly de-risking. By halting new loans and focusing on “extraction-for-repayment,” they have recouped roughly $50 billion, leaving a manageable $10–12 billion on the books.

This operation was never about a “war for oil” in the traditional sense. While the U.S. Strategic Petroleum Reserve (SPR) is low (currently holding 413 million barrels, near 1980s benchmarks) the U.S. could be worried about a war higher than just oil.

U.S emergency stockpile is as low as it was in the 1980s. This gives the U.S. less flexibility in a crisis and weaker leverage against OPEC+ adversaries

Source: U.S. Energy Information Administration

 

This is a war for primacy. If a nation in the Western Hemisphere can successfully decouple from the dollar system using Chinese financial rails, the precedent is dangerous.

So, Washington pulled the emergency brake.

Maduro was taken. The military operation was swift and surgical, closer to a “decapitation strike” rather than a full invasion. But what followed wasn’t a puppet installation, but a bizarre cohabitation. With Delcy Rodríguez now sworn in as Acting President, the U.S. has proven it can remove a leader, but it hasn’t proven it can easily govern the aftermath.

Empire by Other Means

This is not a new doctrine—it’s the Monroe Doctrine, version 2.0.

We’ve talked about the Munroe Doctrine before in our Gold Report, here’s a sneak peak

But Venezuela is not a “banana republic” of the 1950s; it is a fragmented state with 20–30 million people and over 20 different armed groups controlling the interior.

And here’s the kicker: even if you stabilize the country, reactivating Venezuela’s oil machine will require more than $100 billion in capex and over a decade of patient rebuilding. That is a staggering sum for a nation that is effectively insolvent.

To put the scale of this challenge in perspective, consider the mountain of debt already on the books:

• Total External Debt: Estimated between $150–$170 billion.
• Economic Output: The International Monetary Fund (IMF) estimates Venezuela’s nominal GDP at about $82.8 billion for 2025.
• The Debt Trap: This implies a debt-to-GDP ratio of between 180%–200%.

In short: the cost to simply fix the oil fields is larger than the country’s entire annual economic output, and the debt they already owe is double that. This isn’t just a recovery project; it’s a multi-generational financial restructuring.

A Catalyst for Hard Assets

But what does all of this mean for investors?

Wars are inflationary. Always have been. Resources are hoarded. Supply chains are weaponized. Deficits explode. And trust, especially trust in the currency used to finance these deteriorates.

War has always been inflationary

Source: RSM US

At Heyokha, we’ve been writing about this for years:

• In our Q2 2020 report History: A Better Guide than Good Intentions, we’ve argued that Modern Monetary Theory would eventually unleash inflation. With today’s ballooning war budgets and rising debt service, that forecast is aging well.”
• In “Gold: The Return of Real Money”, we mapped the declining credibility of fiat currencies and why gold is re-emerging as a store of trust in a fractured world.
• In “The Stablecoin that Bought a Central Bank’s Worth of Gold”, we showed how even crypto-native companies are seeking shelter in gold, echoing the behavior of central banks.

War also kicks off commodity prices to surge

Venezuela fits squarely into this narrative.

The show of force may have delivered a short-term win. But the long-term effect is clear: if you’re a resource-rich nation thinking of pricing oil or metals outside the dollar, this operation was a warning. The message? Don’t even try.

But the world is watching and taking notes. BRICS members are already settling trades in local currencies. China’s Cross-Border Interbank Payment System (CIPS) now links over 1,400 financial institutions across 109 countries. Gold purchases by central banks hit multi-decade highs last year.

In other words: trust is shifting.

Final Thoughts: A Wake-Up Call for the Financial System

The aircraft have left Caracas. Maduro is in New York facing trial. But the damage to the “rules-based order” is permanent.

This wasn’t just a regime change—it was a message to the rest of the world: U.S. access to resources comes first. Financial autonomy comes second.

That message will echo far beyond Latin America.

It will accelerate the move away from dollar-based systems. It will deepen skepticism of U.S. financial assets. And it will push more capital into real stores of value—like gold, silver, and the infrastructure tied to energy sovereignty.

Up 73% since October 2025. How much higher can it go with increased political uncertainty?

At Heyokha, we see this moment not as an isolated geopolitical event, but as part of the broader endgame of the fiat era. When trust erodes, when power shifts, when the military becomes the backstop of monetary policy—it’s time to think hard about what you own.

Gold isn’t just a hedge anymore. It’s a protest vote. A way to opt out of systems that break their own rules. And the story of Venezuela might be the loudest signal yet.

 

Tara Mulia

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When the quiet metal stops whispering and starts shouting.

Just a few months ago, we wrote about silver’s long-overdue glow-up in “The Silver Awakening” blog. Back then, silver was still the underdog, the Luigi to gold’s Mario if you will, quietly building a case as both a monetary hedge and an industrial scarcity trade.

Now? It’s screaming. Loudly.

Silver has hit another all-time high, breaking past $60 an ounce for the first time. And while headlines focus on price, the real story lies beneath — in vaults running dry, critical minerals lists getting updated, and a market caught in its tightest squeeze in decades.

We’re not surprised. We warned this might happen.

YTD silver has gained 115%. Up and up!

Source: Bloomberg

When Inventory Vanishes, Prices Speak

It didn’t happen overnight. The signs were all there in early 2025: a structural supply deficit, overstretched mine production, and vaults across London and Shanghai thinning out like hairlines in a stress-filled market.

By March, silver flowed aggressively into COMEX, with inventories surpassing 420 million ounces. Meanwhile, London and Shanghai were bleeding metal. Traders were relocating inventory to the U.S. in anticipation of tariffs and Section 232 reviews.

Come summer, the real pain began. LBMA free-float inventories dropped to multi-year lows, hovering around 777 million ounces. Lease rates surged. Shanghai’s drawdowns intensified. And then in August, the U.S. officially added silver to its Critical Minerals List putting it in the same bucket as lithium and rare earths.

From there, the squeeze only accelerated.
By October, China exported over 21 million ounces of silver to London. This is an unusually large relief shipment that showed just how tight things had become. But it wasn’t enough. COMEX started sending silver back to London too, and borrowing costs in London spiked to record highs. At one point, banks were yelling over phones, refusing to quote lease prices.

Silver leasing rate remains elevated. This trend has been spiking up since the start of 2025.
Source: Bloomberg

India Pulls the Pin

And then came India.

As Diwali season approached, domestic demand exploded. For the first time in 27 years, the country’s largest precious metals refinery ran out of silver. Influencers fanned the fire with viral videos claiming the 100:1 gold-silver ratio made silver the trade of the year. The FOMO factor worked. Premiums in India shot past $5/oz.

Customers flocked to jewelry shops to buy silver in Mumbia
Source: Bloomberg

Banks like JPMorgan stopped delivering physical silver to Indian clients altogether. Vaults ran dry. At one point, multiple major ETF providers had to halt new subscriptions because they couldn’t source silver fast enough.

And this wasn’t just a demand shock. It was a geopolitical chess move, too.

Critical Minerals, Critical Pressure

Silver’s inclusion on the U.S. Critical Minerals List was a turning point. It reclassified the metal as essential infrastructure for energy, defense, and semiconductors, not just jewelry and coins.

This changed everything:
• Front-loading into U.S. vaults (COMEX hit ~456 million oz, triple historical norms)
• Concerns over tariffs or export controls
• Policy-fueled stockpiling in anticipation of Section 232 review outcomes

Effectively, the U.S. started hoarding. China started leaking. India started panicking. And London, the pricing hub, broke.

Let’s recap the December scoreboard:

Most London silver is “spoken for” by ETFs. In fact, 83% of LBMA silver was ETF-allocated as of end-September, meaning the actual available float was likely under 150 million ounces, which is barely enough to cover two days of London trading volume.

And let’s not forget: silver is in its fifth consecutive year of deficit. Global demand exceeded 1.14 billion ounces in 2025. Supply? Just 1.03 billion.

Even if you wanted more silver, it’s not easy to dig up. Production is stagnant. The top five producing nations control 62% of supply. Many of their flagship mines are nearing depletion.

Policy, Panic, and… Saudi Arabia?

Amid the chaos, Saudi Arabia quietly signaled a shift. As we noted in The Silver Awakening, the Saudi Central Bank opened positions in iShares Silver Trust and Global X Silver Miners ETF — its first-ever silver allocation.

It might look small on paper, but in geopolitics, signals matter more than size. A central bank that helped anchor the petrodollar is now experimenting with silver. It won’t be the last.

This fits the bigger pattern we’ve been tracking for years: real assets are in, fiat trust is out.

Silver: The Critical Commodity with Conviction

Silver has now been:
• Reclassified as a critical mineral in the U.S.
• Accumulated by central banks
• Strangled by ETF tightness
• Pulled in three directions by U.S., China, and India
• Embedded in everything from solar panels to semiconductors
• Used as a monetary hedge and an industrial necessity

No wonder it’s outperforming gold on momentum.
This isn’t just a catch-up trade. It’s a regime shift.

Final Thoughts: What’s the Real Price of Scarcity?

Silver is not merely the poor man’s gold anymore. It’s the broke system’s loudest whistleblower.

If gold reflects fear, silver reflects system strain. And right now, the system is groaning under the weight of physical shortages, policy bifurcation, and investor distrust.

We still believe silver is the most underappreciated character in this commodity cycle. It may not have gold’s headlines (yet). But when physical reality meets monetary erosion, silver doesn’t just wake up.
It explodes.

The rally isn’t the surprise. The surprise is that so few saw it coming….again.

Tara Mulia

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How Tether quietly became one of the world’s biggest gold holders, and what it signals about the future of money

When we last wrote about stablecoins, we framed them as chips at a casino, and later as claw machine tokens in a rebuilt monetary arcade. They were becoming infrastructure quietly, steadily. But what happens when that infrastructure decides to hoard bullion?

Tether, the world’s largest stablecoin issuer, has quietly become one of the most aggressive gold buyers in the world. Not a central bank. Not a sovereign wealth fund. A crypto company with a token named after a rope.

Gold purchases by quarter. Tether bought close to 12% of what the central banks were buying

Source: Financial Times

As of Q3 2025, Tether holds more than 116 tonnes of physical gold. That’s more than South Korea, Hungary, or Greece. According to Jefferies, that makes it the largest gold holder outside of central banks. Yes, probably bigger than your gold ETF. Bigger than most sovereigns. And with roughly $15 billion in projected profits this year, they’re just getting started.

It’s the most curious subplot in the financial system’s ongoing identity crisis: a crypto stablecoin company, built to track the U.S. dollar, is becoming one of the most aggressive buyers of the very metal that signals distrust in fiat.

It would be hilarious if it weren’t also brilliant.

That’s a Lot Of Gold

How can Tether afford to buy this much gold?

It starts with its business model. Tether issues USDT, a dollar-pegged token backed mostly by U.S. Treasury bills. The company earns interest on those bills but pays zero interest to USDT holders. In a world of 5% base rates and $112 billion in reserves, that spread is pure profit. We suppose they’re putting it to good use.

In Q3 2025 alone, Tether bought 26 tonnes of gold—nearly 12% of global central bank demand and about 2% of total gold demand. If Tether ploughs half its profits into bullion, that pace could double.

But it’s not just bars in a vault.

2025 net gold purchases, Tether vs select central banks

Source: Financial Times

Not Just Buying Gold but Building the Ecosystem

Tether has begun deploying capital across the gold supply chain, from streaming and royalty companies to talks with mining operators and refiners.

In June, it acquired a minority stake in Toronto-listed Elemental Altus for $105 million. Later in the year, it invested another $100 million as the firm merged with EMX Royalty.

Tether has also been in discussions with gold-mining investment vehicles such as Terranova Resources, although no deal has materialized yet.

The goal seems clear: Tether doesn’t just want to own gold. It wants gold exposure with leverage, cash flow, and upstream access. Think royalties, not just vaults.

This echoes what we’ve seen in recent years in China, where companies like Xiaomi and BYD began as consumers of critical materials, then became stakeholders in upstream supply chains. It’s all part of building resilience into the foundation of your business.

From Fiat Peg to Metal Peg?

Tether’s relationship with gold isn’t new. It launched XAUt, its gold-backed stablecoin, in 2020. Each token represents one troy ounce of physical gold, stored in Swiss vaults.

For most of its existence, XAUt was a side project. But that may be changing.

Despite gold price correction, Tether market cap increased by 0.54 billion indicating strong demand

Source: TradingView, Heyokha Research

Since August 2025, blockchain data suggests Tether added more than 275,000 ounces of gold to XAUt’s reserves. The token’s market cap has doubled over the past six months, now sitting between $1.5 to $2.1 billion.

XAUt and Paxos’ PAXG (another tokenized form of gold) together make up around 90% of the entire tokenized gold market, which is still small ($3–3.9 billion total), but growing. XAUt leads with about 49–54% market share.

Still, it’s early days. For all the hype, tokenized gold remains a tiny sliver of global gold markets, which settle over $60 billion daily.

But the use case is compelling.

Why Not Just Buy Gold Bars?

Good question. Here’s how XAUt stacks up:

Compared to physical gold, XAUt offers:

• 24/7 trading and near-instant blockchain transfers
• No need to arrange your own vault, insurance, or transport
• Fractional ownership—you can own 0.0001 ounces, not just 1 oz bars

But it also comes with:

• Counterparty risk (you trust Tether’s vaulting and audits)
• Tech risk (your wallet keys are your problem)
• Less “off-grid” resilience if you’re hedging against full systemic collapse

Compared to “digital gold” like ETFs or app-based gold accounts, XAUt:

• Gives you legal title to allocated bars
• Works natively with DeFi apps, DEXes, and crypto wallets

But:

• It lacks regulatory clarity and tax simplicity
• Wallet UX still scares off mainstream investors

It’s not better or worse. It’s built for a different user. If you already operate in crypto, XAUt feels like a natural extension. If your gold sits in a retirement account, it probably stays there.

The real question: will tokenized gold ever cross over?

We have explored this idea before in our blog,  “Stablecoins: Genius or Just…Stable?”. We warned that stablecoins could evolve from dollar mirrors into asset-backed financial rails with their own monetary dynamics. If you ever need a refresher on how Stablecoins work, we got your back:  “Stablecoins 101”.

All this to circle back on a thesis we have also explored and have been harping on – fiat debasement pushes the appeal of gold higher. You can read our thoughts in depth in our “Gold: The Return of Real Money” report.

Tether, it turns out, is acting on that thesis with alarming precision. A crypto company built on fiat liquidity is quietly becoming a force in the real-asset world.

Final Thoughts: The Digital Dragon Hoards Gold

This story is far from over.

Tether’s bullion buying already moves markets at the margin. If its 2025 profit estimates hold and the company keeps scaling gold exposure, it could soon rival the annual net purchases of more central banks.

Whether XAUt becomes a widely used digital gold standard is still uncertain. But that’s not the point.

The point is this: while most stablecoin players are debating compliance frameworks, Tether is quietly building a gold-backed war chest, a commodity lending book, and upstream access to the world’s oldest monetary metal.

And when the next currency crisis hits, the company that started by pegging to fiat might just be the one holding the hardest collateral in town.

As we like to say at Heyokha: in a world of soft money and harder choices, real money has a way of resurfacing.

 

Tara Mulia

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When people talk about artificial intelligence, the conversation usually drifts into abstraction including but not limited to models, tokens, algorithms, cognition. But underneath all that magic is a very physical reality: silicon chips, cooling fans, thousands of kilometres of fibre optic cables, and megawatts of electricity coursing through humming data centres.

In fact, as 2025 unfolds, AI is no longer just a story of breakthroughs. It’s a story of build-outs. And increasingly, the real competitive edge doesn’t lie in model architecture or training techniques, but in something much simpler: who can scale electricity, chips, and infrastructure faster.

When Data Meets Voltage

AI carried U.S. equities in Q3. The sector now accounts for nearly 80% of the S&P 500’s year-to-date gains. The capital intensity is staggering: AI-related investments contributed nearly 40% of U.S. GDP growth in 2025. Nvidia’s rally may get the headlines, but the unsung hero of this boom is infrastructure.

Global computing capacity is set to expand massively

Source: McKinsey

Data centres alone are projected to consume 1,600 TWh of electricity by 2035, which is the equivalent to 4.4% of global power use. That would make “AI” the world’s fourth-largest electricity consumer behind the U.S., China, and India.

Compute demand is now doubling every 100 days. Power, water, land, and transmission capacity are no longer cost inputs. They are hard constraints.

Gridlock vs. Greenlight: The U.S. Grid Struggles as China Powers Ahead

This shift is already causing cracks. Microsoft recently admitted that power has become “the biggest issue” for future data centre builds. Amazon is flagging grid shortages, even as hyperscaler capex is projected to jump from US$370 billion in 2025 to US$470 billion in 2026.

In response, U.S. tech giants are building their own generators just to keep expansion plans alive. But between fragmented state grids and a politicised permitting system, scaling energy capacity in America is looking less like innovation and more like improvisation.

China, by contrast, is turning its state-led muscle into an AI advantage. In the first nine months of 2025, China added 240 GW of solar power—more than the entire installed solar capacity of the U.S.

China and U.S. (utility scale) electricity generation capacity (stock). This is where the real power lies

Source: China Electricity Council, US Energy Information Administration (EIA)

According to OpenAI’s open letter to the White House, China added 429 GW of new power capacity in 2024 alone. That’s more than one-third of the entire U.S. grid, built in a single year.

And the state isn’t just expanding power. It’s subsidising it.

And it’s not just about keeping the lights on — it’s about rerouting the entire tech stack. With U.S. export controls choking access to Nvidia’s best chips, China is doubling down on homegrown hardware. That energy advantage is now powering a new playbook: build your own chips, subsidize their use, and cluster them like there’s no tomorrow.

Powering the Home Team

Beijing’s strategy is clear: if you can’t buy the best chips, out-build the system around them.

With Washington tightening export controls on Nvidia’s AI hardware, Chinese tech giants found themselves cut off from the gold standard. So Huawei stepped in with a workaround: not a better chip, but a bigger cluster.

Its new CloudMatrix 384 system links together 384 of its Ascend 910C processors, compensating for weaker single-chip performance with brute-force architecture and advanced networking. The result? A cluster Huawei claims outperforms Nvidia’s flagship NVL72 on compute and memory, even if it gulps far more power and demands more manpower to maintain.

Source: SemiAnalysis, Nvidia, Huawei

A full CloudMatrix setup now delivers 300 PFLOPs of dense BF16 compute. This is nearly twice the performance of Nvidia’s GB200 NVL72. With over 3.6 times the total memory capacity and 2.1 times the bandwidth, Huawei isn’t just catching up. It’s building an AI system that can go toe-to-toe with Nvidia’s best.

And here’s where the state steps in again not just with chips, but with cheap juice.

Local governments in provinces like Gansu, Guizhou, and Inner Mongolia are now offering power subsidies that slash electricity bills by up to 50%, but only if you’re running domestic chips. That’s on top of cash incentives generous enough to cover a data centre’s operating costs for a year.

The logic is brutal but effective: reduce Chinese firms’ dependency on Nvidia and make up for the efficiency gap with fiscal firepower. Huawei’s chips may consume 30–50% more electricity than Nvidia’s, but if the power is cheap enough, it doesn’t matter.

Crowd gathers to admire Huawei’s Ascend-powered CloudMatrix 384 system at the 2025 World AI Conference in Shanghai.

Source: South China Morning Post, Xinhua

And the power is, in fact, cheap. Thanks to China’s centralised grid and abundant power in remote provinces, average industrial electricity costs in these subsidised regions hover around 5.6 cents/kWh — a steep discount to the 9.1 cents/kWh U.S. average. Add a surplus of engineers, and the equation tilts further in Beijing’s favour.

CloudMatrix clusters are now being delivered to data centres serving top-tier Chinese tech clients. They aren’t just Plan B — they’re a parallel track. Built differently, powered locally, and scaled with state backing.

Final Thoughts: The Next Moat Is Physical

The Western narrative still sees AI dominance through the lens of software and algorithms. But the deeper we go, the more this becomes a game of logistics, power grids, and vertically integrated industrial policy.

China’s AI build-out shows what happens when you align energy strategy, chip design, and capital deployment. The result isn’t the most beautiful AI system. It’s the most deployable one.

For all the talk of exponential models and general intelligence, the ceiling of progress may come down to simple things: copper, electricity, trained labour, and land.

We’ve said it before in The Case for Copper: in a rewired world, it’s not software that limits us—it’s the metals behind the curtain. And AI is now hitting that same wall. Every model, every data centre, every breakthrough depends on the silent metals that carries the current.

As we like to say at Heyokha: When the world scrambles for intelligence, don’t forget who owns the grid.

 

Tara Mulia
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When most people think of copper, they picture something painfully mundane, whether it’s the loose change in their pocket, a rusty pipe under the sink, or those aesthetically pleasing heavy frying pans that’s always hanging in fancy restaurants.

But copper has quietly graduated from plumbing and pennies to something far more vital: the wiring behind the world’s biggest transformations. It’s in the electric car you’re eyeing. It’s in the AI data center streaming your kid’s favorite cartoon. It’s even in the defense systems supposedly protecting us from everything except inflation.

In a world of speculative bubbles and digital promises, copper is refreshingly real.

If gold reflects fear and silver mirrors doubt, copper is the metal of action. This is seen with shovels in dirt, cables in trenches, and electrons flowing through everything from EVs to AI data centers. It doesn’t glitter. It conducts.

Lately, that conductor is buzzing. Prices hovered near US$10,500 per ton in Q3, just shy of record highs, as the copper market reminded us how fragile its foundations really are.

A Market One Mudslide Away

The Grasberg mine has one of the largest reserves of gold and copper in the world, located in Mimika Regency, Central Papua

Source: Mining.com

Start in Indonesia. In September, Freeport-McMoRan’s massive Grasberg mine declared force majeure after a mudslide tragically halted ore shipments. The loss? Around 250,000 tons, enough to rattle global balances.

Next, over to the DRC, where Ivanhoe’s Kamoa-Kakula mine, touted as one of the world’s most important new producers, faced repeated power disruptions.

In Chile, state-owned Codelco can’t catch a break. Its El Teniente mine continues to battle geotechnical issues, with broader output targets repeatedly revised down.

Add it all up, and more than 500,000 tons of copper concentrate evaporated in months. That’s more than a week of global demand, and we’ve only talked about three sites.

Annual mine disruptions are now running at 6 percent of total global output, or about 1.3 million tons. That’s not a rounding error. It’s systemic stress.

At Heyokha, we’ve long argued that price-setting power arises when fragility meets indispensability. Copper now sits at that intersection.

Structural Demand, Not a Supercycle

While the supply side buckles, the demand story is shifting into overdrive.

Between now and 2035, copper demand is projected to rise 24 percent, hitting 43 million tons. And this time, it’s not the old industrial cycle. It’s the future coming online.

• Grid electrification will require about 3 million tons per year by 2035
• Defense and industrial reshoring? Add another 4 to 5 million tons
• Clean energy? Even the IEA’s conservative estimates say copper demand from clean tech will double by 2030

Copper demand in multiple sectors are seeing multi-year growth

Source: Wood Mackenzie

And let’s not forget the most quietly copper-hungry sector of all: data centers.

Every ChatGPT query, every AI model training run, every cloud-stored selfie you forgot to delete —  these are all powered by backend infrastructure that’s wired wall-to-wall with copper. Each megawatt of AI data center capacity requires 20 to 40 tons of it. Multiply that by trillions in projected AI infrastructure and you have a demand curve that doesn’t blink.

This is not a hype cycle. This is embedded, durable, electrified demand.

A Supply Chain That Can’t Keep Up

So where’s all the new copper coming from?

It’s not that easy. Global ore grades have fallen 40 percent since 1990. Capital intensity is up 65 percent since 2020. And permitting a new copper mine? You’re looking at a decade, if you’re lucky.

Rising copper shortage signals long terms risk ahead

Source: Wood Mackenzie

To stay balanced, the world needs:

• 8 million tons of new mine capacity annually
• 3 to 4 million tons from recycling
• Roughly 900,000 tons of new projects brought online each year, double the historical average

But the pipeline is thin, and investors know it.

That’s why we’re seeing consolidation instead of exploration. Anglo American’s US$53 billion merger with Teck isn’t just about synergies. It’s about locking in long-life assets before scarcity goes systemic.

Glencore, too, keeps sniffing around for scale. Because in a tight copper world, it’s not who finds the next deposit. It’s who controls the infrastructure to extract and ship it.

The Currency of Scarcity

With incentive prices creeping above US$11,000 per ton and marginal production costs approaching US$3 per pound, the copper market is entering new territory.

Not because demand is spiking suddenly, but because it’s changing shape. When copper demand is driven by nation-state priorities such as energy security, defense, and technological sovereignty, it’s no longer elastic.

This isn’t a boom. It’s a recalibration.

And the world may soon learn that it takes more than capital to produce copper. It takes patience, political coordination, and power grids that don’t collapse under strain.

Final Thoughts: The Copper Thread in Every Grand Vision

Copper might not be the headline-grabber in your portfolio. It hasn’t been memed to the moon or pumped on Reddit chats, but it will quietly underwrite every grand vision of a rewired, electrified, AI-enhanced future.

In an era obsessed with what’s virtual, copper reminds us that none of it works without something real.

Yes, the path to US$11,000 copper may be volatile. But volatility isn’t the enemy. Unpreparedness is.

When the lights go on, in factories, data centers, electric grids, and defense systems, copper will be there, humming in the background.

Conducting reality.

 

Tara Mulia
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