(Kitco News) – As the world shifts to renewables and electric vehicles, the demand for copper will increase dramatically while the supply will decrease. “I’m very excited that copper is going to have a very long and good run and that we will have some organic exposure to it,” said Tom Palmer, CEO of Newmont. Newmont, which celebrated its 100th anniversary earlier this year, is the only gold mining company listed on the S&P 500.

Michelle Makori, Senior Presenter and Editor-in-Chief of Kitco News, spoke with Palmer at the Denver Gold Forum.

Most clean technologies, including renewable energy systems like solar, hydro, or wind farms, require significantly more copper than is currently used in our current non-renewable energy systems, according to metals experts.

Palmer explained how Newmont is increasing its exposure to copper. “We have designed a portfolio in our organic projects pipeline that includes a number of copper projects,” he explained. “By doing nothing more than advancing our pipeline of organic projects through our investment system, and as we move into the latter part of this decade, into the 2030s and 2040s, we will be increasing our exposure to copper.” because we have a number of gold / copper projects. “

Newmont also acquired GT Gold earlier this year, which includes the Tatogga project, a future copper / gold mine in British Columbia.

Copper was called “new oil” in a report released earlier this year by Goldman Sachs.

Last November, Newmont set ambitious targets to reduce greenhouse gas emissions by 30% by 2030 and to be net zero by 2050. underlined. “By 2030, we will move towards renewable energies, whether hydraulic, wind or solar. This will force us to switch to different forms of energy to drive our trucks such as electric batteries or hydrogen. “

To help it meet its goal of reducing gas emissions, the company has pledged to spend $ 500 million over the next five years. “It’s about supporting investment in the things we need to do to achieve these goals. We’ve led the industry trend in our goal of reducing greenhouse gas emissions,” Palmer said. “After making our announcement, a number of other miners lined up behind us and made the same commitment. As an industry, we are moving in that direction.”

The price of gold is down about 7% year-to-date, while Newmont’s share price is down 9% year-to-date and 22% per year. report to its May summit. “Gold prices haven’t moved much since May. We’re a very good buy. I think gold stocks are a good opportunity, if people are looking to invest in a good long-term investment,” he said. added Palmer. “What sets us apart from our competitors in the gold industry is our policy of capital allocation. We have a very clear dividend framework. We pay a dividend of 55 cents per share each quarter. This represents, at our current price, a return of 4 percent. “

Palmer explained how Newmont sets a sustainable base dividend at a gold price of $ 1,200, which allows him to return that money to shareholders. “We develop business plans that generate a margin of $ 1,200. We then pay a sustainable base dividend of $ 1 per share at a gold price of $ 1,200,” he said.

“With all of these coins in place, we have a strong leverage effect on the price of gold. For every $ 100 increase in the price of gold above $ 1,200, we generate $ 400 million of gold. free cash flow every year. ” At current gold prices, we generate $ 2.4 billion in free cash flow above this base level each year. “

Newmont’s current projects in Tanami, Australia, and the Ahafo North project in Ghana, are important to its production, Palmer said. “Tanami is a world-class asset where, for the first time, we are sinking a production well. It’s a critical asset that really establishes our position there for many years to come.”

“Ahafo North is only 30 kilometers from our Ahafo mine. Ahafo has a very long life with several surface mines and one underground mine,” said Palmer. “Ahafo North, as part of this complex, further extends the lifespan and increases the production of Ahafo.”

Palmer explained how difficult it has been for the gold industry to operate during the pandemic. “The virus continues, especially across Latin America, to have a very significant impact on our workforce and our communities,” said Palmer. “We have benefited from very good gold prices which helps to a certain extent, but it has always been a difficult time. It has gone from our immediate response to the pandemic to something that is now a chronic problem that we have been managing for 18 months. “

Learn more about Palmer’s take on metal mining, please watch the full video above. Follow Michelle Makori on Twitter: @Michelle Makori