Sector currently less attractive for investors but indispensable for the fight against climate change.
Commodities expert Evy Hambro is responsible for thematic and sector investments at BlackRock, the world’s largest investment company. In an interview with Bloomberg (paywall), he points out the importance of mining for the energy transition’s success. However, many investors do not perceive this role, which Hambro sees as a significant danger. If investments are lacking, companies will lack the necessary capital for new projects, which already have long lead times. This threatens a shortage of raw materials that are indispensable for wind energy and electric cars. It is time for a reassessment of the industry, Hambro added. After all, a lot has happened, for example, in reducing CO2 emissions. Financial discipline has also improved, he said.
Recently, the management consultancy EY drew a similar conclusion about the mining industry. It faces a dilemma because it extracts the resources needed for the energy and transport transition and whose demand is constantly increasing. On the other hand, the impact of mining on the environment must be minimized, he said.
Despite the challenges, Hambro sees the sector as an opportunity for value creation for investors: “If you’re focused on sustainability, if you’re focused on the energy transition, don’t overlook this area,” he concludes.