Here’s a supply chain domino effect you might not have considered: a geopolitical chokepoint half a world away could soon mean you pay more for everything from wiring to wheat. Billionaire investor Robert Friedland laid out this precise scenario, warning that the ripple effects from a disrupted Strait of Hormuz could squeeze the global mining industry in a very specific, chemical-dependent way.
Speaking during Ivanhoe Mines Ltd.'s (IVPAF) first-quarter production results on Monday, Friedland, the company’s founder, pointed to a risk beyond the immediate oil and gas headlines. "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.
He then got specific about the second-order effect. "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. So, a shipping lane problem becomes a chemical problem, which then becomes a copper problem. That’s how modern supply chains work.
The Ripple Effect of a Chemical Shortage
Why is sulfuric acid such a big deal? Think of it as the unsung hero of industrial chemistry. It’s critical for leaching copper from oxide ores and is a vital component in producing phosphate fertilizers—which alone account for over half of global demand. It also plays a massive role in smelting and metal processing. Copper smelting alone gobbles up tens of millions of tons of the stuff every year.
The problem is that when the supply of this one chemical gets pinched, the pain radiates out in all directions at once. It hits food production and metal production simultaneously, which is a neat trick for amplifying both inflationary pressure and supply risk across the economy.
And the pinch is happening from two sides. First, there’s China. The country has decided to ban sulfuric acid exports starting May 1. China ships about 2.7 million tons annually and is a major supplier to key markets like Chile. This ban—which covers acid produced as a byproduct of copper and zinc smelting—tightens global availability right on schedule.
Second, the Middle East-linked shipping disruptions are cutting off roughly half of the seaborne sulfur supply, which is a key feedstock for making sulfuric acid. Put these two forces together, and prices are reacting. Data shows a nearly 130% year-to-date price rise. The chemical market is sending a very clear distress signal.
Who's Shielded and Who's Getting Hit
In this brewing storm, Friedland’s Ivanhoe has a unique lifeboat. The company’s flagship Kamoa-Kakula complex in the Democratic Republic of Congo (DRC) is actually insulated from the sulfuric acid risk. In the first quarter, it produced 71,417 tons of copper anode and blister, along with 117,871 tons of high-strength sulfuric acid.
Because its smelter generates acid as a byproduct, Kamoa-Kakula has the strategic advantage of being a net seller, not a consumer. It’s like owning a bakery in a bread shortage. Still, the company isn’t taking chances and has implemented contingency measures, including advanced diesel procurement, to safeguard operations.
Elsewhere in the DRC, the story is different. Reports indicate that leading copper and cobalt producers have already seen shipments of key chemicals canceled or delayed. This is forcing them to cut usage and consider output reductions. While specific companies weren’t named, sources referenced the country’s three largest operators: China’s CMOC (CMCLY), Glencore Plc (GLCNF), and Eurasian Resources Group. The disruption is not a theoretical future risk; it’s a present-day logistics headache.
The Copper Paradox: Surplus Today, Shortage Tomorrow
All this talk of potential copper supply crunches runs into a confusing market reality. According to analysis, copper is currently oversupplied and overpriced. Global inventories have risen by more than 1 million tons since early 2025, and visible stockpiles are at multi-year highs. From a pure supply-and-demand snapshot today, there’s plenty of copper.
Yet, the market is behaving as if that snapshot is misleading. The short-term surplus contrasts sharply with nearly every long-term projection, which points to structural shortages looming in the 2030s driven by the energy transition. The forward-looking market seems to be betting heavily on those future deficits. The Global X Copper Miners ETF (COPX) is up 16.16% year-to-date, suggesting investors are buying the future shortage story, not the current surplus reality.
Meanwhile, in the cobalt market—often mined alongside copper in the DRC—the deficit is already here. Export curbs from the DRC caused a shortage of 82,000 tons last year, pushing prices higher. Unless policy changes, those shortages are expected to persist through the decade.
So, what we have is a layered problem. A geopolitical event threatens a chemical supply, which threatens metal production, all while the market for the most critical metal, copper, is trying to price in a shortage that hasn’t arrived yet but might be accelerated by the very chemical crisis that’s unfolding. It’s a reminder that in globalized industry, everything is connected, often by a pipeline of sulfuric acid.
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