Digging Value is a twice-a-week column where I deep dive into markets, mining, and whatever financial absurdity caught my attention.
If you like your investing insights (not advice!) grounded in cash flows, hard assets, and common sense—but also recognize that markets frequently ignore all three—you’ll probably enjoy this.
Let’s explore the wild world of value investing in natural resources together.
Today’s column: Humanoids are bullish metals, the Congolese want to play ball, and what it’s like being the youngest man at the gold party.
“Digging for Value, One Story At A Time.”
Humanoids Are Bullish Metals
One common theme around here is that Everything Is Bullish Metals. No matter what it is, you can reasonably argue that, in the end, it’s great for metals.
So it’s no surprise that 3 billion humanoid robots would be Bullish Metals.
“Bank of America analysts predict that humanoid robot (HR) development will accelerate rapidly, with global annual sales reaching 1 million units by 2030 and a staggering 3 billion humanoid robots in operation by 2060.
In a report this week, BofA highlighted the increasing role of AI advancements, 3D perception technology, and declining hardware costs in driving HR adoption.
“With such heavyweight support, we believe HRs are poised to move from proofs of concept to multi-industry adoption by the end of the decade,” the analysts wrote.”
To put that into perspective, that’s roughly one robot for every two humans, assuming the global population hovers around 9 billion by then. I’m sure it wouldn’t lead to a mass human extinction or anything like that. We’ve all seen Terminator, right?
“BofA expects the cost of humanoid robots to decline significantly in the coming years.
“We estimate the content cost of a humanoid robot to be US$35K by the end of 2025 and expect it to decline to US$17K by 2030,” wrote the bank.
The report also highlighted the role of Tesla (NASDAQ:TSLA), NVIDIA (NASDAQ:NVDA), and Meta (NASDAQ:META) in HR development, with Tesla’s Optimus Gen 2 robot currently costing US$50-60K per unit.
BofA explained that similar cost declines in electric vehicle (EV) components, particularly in China, have boosted adoption, and a comparable trend could accelerate HR penetration globally.”
For the low price of $17K, you can have a robot take out the trash, do your dishes, and probably pick your stocks.
Of course, building 3 billion robots would require enormous amounts of metals. How much, you say? Let’s do a fun thought experiment, starting with copper.
There is roughly 60-85kg of copper per EV. Since a humanoid robot would be much smaller, let’s assume 10-20kg of copper per robot.
We’d need 45 million metric tons of copper to meet that 3 billion robot goal. Current global annual copper production is only 22M metric tons.
Silver would require 20-30g per robot, another 75,000 metric tons. Meanwhile, we currently produce 26,000 metric tons of silver annually.
Will we get to 3 billion robots by 2060? Probably not. But there’s a more important lesson here.
All our technological goals—robots, EVs, autonomous drones, and flying cars—will require more metals and minerals than we currently have.
So if you want a robot to clean your dishes and make your bed, start buying mining stocks (not a recommendation or advice!).
The Art of the Deal: Congo Style
It’s usually a good idea to have options. You don’t want to apply to just one college, date just one person, or try just one flavor of ice cream. You want to experience all that life has to offer. Find out what you like and don’t like.
The United States is kind of doing that with global mineral deals between Ukraine and the Democratic Republic of the Congo. From Miningmx.com:
“THE US was open to exploring critical minerals partnerships with Congo, the State Department said in a statement to Reuters on Sunday. This was after a Congolese senator contacted US officials to pitch a minerals-for-security deal.
Democratic Republic of Congo, which is rich in cobalt, lithium and uranium among other minerals, has been fighting Rwanda-backed M23 rebels who have seized swathes of its territory this year, the newswire said.
Talk of a deal with the US – which is also in discussions with Ukraine over a minerals pact – has circulated in Kinshasa for weeks.”
All else equal, the Congo is a much better place to exchange security-for-minerals than Ukraine. Here’s why.
The DRC holds the world’s largest cobalt reserves, with estimated 6 million metric tons of deposits. It produces over 70% of the world’s cobalt, primarily as a byproduct of nickel and copper mining.
It also has significant copper deposits, estimated at 75 million metric tons. It is one of the world’s leading copper producers.
The Congo also has an estimated 600Mt of gold ore, which would help with potential audit-related shortfalls.
I don’t know. The deal makes sense? Congo’s government is fighting Rwanda-backed M23 rebels who’ve seized chunks of territory this year. They saw the failed US/Ukraine minerals deal and said, “You son of a bitch, I’m in.”
““There is a desire for us to diversify our partners,” Congolese government spokesman Patrick Muyaya said last week, adding there were “daily exchanges” between Congo and the US
“If today American investors are interested in coming to the DRC, obviously they will find space … DRC has reserves that are available and it would also be good if American capital could invest here,” he said.
“I think it’s certainly something that will pique people’s interest in Washington, and I think it has attracted interest,” said Jason Stearns, a Congo expert at Canada’s Simon Fraser University, told Reuters. Congo’s mineral supply chains are currently dominated by China, he added.
The possibility of a minerals accord between Congo and the US emerged last week.
Citing a letter to US Secretary of State Marco Rubio, Bloomberg News said Congo asked for an urgent meeting between its president Felix Tshisekedi and Donald Trump, the US president.”
In a way, the Congo is trying to finesse an all-expense paid trip to revive its country. It would be incredible if they pulled it off.
Think about it. China has already spent decades building roads, bridges, and railways in exchange for metals and mining rights. But they didn’t solve the M23 war issue.
Now they can ask the US to do what it does best, provide defense support for something it desperately needs.
I can’t wait for that meeting between DRC President Tshisekedi and Trump.
Tshisekedi: “We’ve got cobalt, lithium, uranium—”
Trump: “Tremendous minerals, very beautiful. The best minerals. I’ve always said that. And you know what, they’re better than Ukraine. Ukraine’s mines had landmines, can you believe that?”
Tshisekedi: “If you help us with security, U.S. firms can access them.”
Trump: “We’ll send the finest troops. Beautiful troops. And we’ll do it quickly. We’ll be in and out so fast you won’t believe that we were there at all.”
To recap: Congo gets security; the U.S. gets minerals; China gets a headache. Everyone’s happy! Except the M23 rebels, Rwandans, and anyone who remembers how resource deals in fragile states tend to go.
But hey, it should be good for public mining companies that are exposed to the DRC.
Gold Is An Old Man’s Game
I’ve written about the state of the mining industry before saying, “One value investing principle is to find a pond where nobody’s fishing and fish there.
Another way you could say that is, “find an industry with the most amount of old people and get in while you’re young.””
It’s one of the reasons why I love Anthony Milewski of The Oregon Group. He does a great job telling you how much of a Boomer’s Game the gold mining space is — like his thoughts from the latest PDAC conference:
“In recent years gold focused conferences (and really mining conferences generally) have looked more like retirement parties and lifetime achievement ceremonies than bastions of commerce and ideas. We are seeing the greying, just not the greening of our industry. Think about all the big name guys that made “real” money in gold in the last cycle… its been a minute.
Frank Giustra and Ross Beaty are old enough to my grandpa, and Egizio Bianchini who was BMO’s gold analyst covering Bre-x and later went on to run BMO’s mining group has retired at least once. At 81, Eric Sprott may have single handedly kept the entire gold junior space from going under through check writing over the past decade. Even the man, the myth, the legend – The Rick Rule – is 72 years old!”
The gold mining space is kind of like today’s NBA. Curry, LeBron, KD, Jokic, Paul George, CP3. What do they all have in common? They’re getting old!
But unlike the NBA, there’s nobody standing there ready to take the torch. Back to Anthony:
“I have found myself to be the youngest attendee by twenty years or more on several occasions at these events.”
I can’t think of another industry with a wider gap between today’s value creators and tomorrow’s value creators. At the same time, I can’t think of another industry with as much opportunity for generational wealth in the coming decades.
Mining is the ultimate contrarian investment. Not because stock prices are low. But because nobody wants to work, invest, or participate in the industry.
All at a time when we need more metals than ever before.
