We believe the unique supply and demand dynamics for critical minerals will underpin potential investment opportunities in the years ahead.
Synopsis
The Energy Transition Depends on Critical Minerals
Critical minerals are essential for the global energy transition as we gradually phase out CO2-intensive energy sources with cleaner sources, including nuclear, solar, wind, hydro and geothermal energy and greater use of electric vehicles (EVs). The reality is that these critical minerals will likely experience significant increases in demand, while developing new supplies will require enormous amounts of capital and time. We believe the unique supply and demand dynamics for critical minerals will underpin potential investment opportunities in the years ahead.
Critical Mineral Miners Poised for Growth
Supply and demand pressures should position miners for an era of sustained investment. From a bird’s-eye view, energy is transitioning away from high-carbon sources, and miners’ share of GDP (gross domestic product) production should expand in line with the share of carbon-free activity. Indeed, mining equities tend to move in line with commodity spot prices over long periods. This trend has begun to emerge post-pandemic, and we expect it to continue.
Investment Risks and Important Disclosure
This article discusses a range of potential economic scenarios that could arise if current geopolitical conditions persist or deteriorate. These scenarios, including those expressed in the present or future tense, are illustrative only and should not be viewed as predictive, promissory or guaranteed.
Relative to other sectors, precious metals and natural resources investments have higher headline risk and are more sensitive to changes in economic data, political or regulatory events, and underlying commodity price fluctuations. Risks related to extraction, storage and liquidity should also be considered.
Gold and precious metals are referred to with terms of art like "store of value," "safe haven" and "safe asset." These terms should not be construed to guarantee any form of investment safety. While “safe” assets like gold, Treasuries, money market funds and cash generally do not carry a high risk of loss relative to other asset classes, any asset may lose value, which may involve the complete loss of invested principal.
Past performance is no guarantee of future results. Investments, commentary and statements are unique and may not be reflective of investments and commentary in other strategies managed by any other Sprott entity or affiliate. Opinions expressed in this presentation are those of the presenters and may vary widely from opinions of other Sprott affiliates. Forward-looking language should not be construed as predictive. While third-party sources are believed to be reliable, Sprott makes no guarantee as to their accuracy or timeliness. This information does not constitute an offer or solicitation and may not be relied upon or considered to be the rendering of tax, legal, accounting or professional advice. It does not constitute a recommendation to purchase, sell or hold gold, silver, mining equities, exchange-traded products or any other investment.