Sprott Senior Portfolio Managers Justin Tolman and Shree Kargutkar discuss global demand trends for metals and how active management creates opportunities for investors.
Demand for steel, copper, and silver, are generally driven by energy growth, energy security, and mineral security, explains Tolman in a recent podcast. Half of the world’s projected population of 10 billion in 2050 will live in emerging markets and aspire to live the lifestyle of consumers in developed markets. Electricity demand is directly correlated to per capita income. Building new cities to house growing populations is highly resource-intensive, while demand for data centers in developed markets has driven power consumption up 60% over the last three years. Building and powering AI data centers drives the consumption of copper and uranium.
As a geologist and portfolio manager, Tolman believes that active management is critical in this space, seeking to identify long-term demand drivers before they are obvious to the markets. While there are a large number of materials companies posting average results, the top quartile of companies may increase by 200% or more in a year such as 2024. Geologists can study each company to identify the quality of the ore body and the management team’s ability to execute operations profitably. Ore deposits must be feasible over a full economic cycle, with investors having a strong understanding of technical and jurisdictional risks.
Sprott’s ETFs can take equity positions in mining companies, but have also profited in recent years from streaming and royalty companies that finance mining operations. Service providers include labs and drilling companies.
Because steel accounts for 10% of global carbon emissions, Tolman sees growth in green steel that can be recycled from feedstocks high in Direct Reduced Iron.
With growth in solar panels, batteries, and electronics, industrial uses comprise 60% of the demand for silver, which differentiates from the prospects of gold.
WEBCAST – Going Beneath the Surface: Active Management in Metals & Mining ETFs
Join Sprott for an exclusive webcast that will explore the powerful macro forces shaping the metals and mining sector. We’ll explore the explosive growth in energy demand and the rise of AI, the critical issues of energy security, resource nationalism and persistent supply-demand imbalances. Learn how first-hand experience in the mining sector can benefit equity selection in the miners of gold, silver, uranium, copper and more.
We’ll help you:
- Understand the long-term drivers of global demand for metals and miners.
- Discover why active management matters more than ever in this dynamic landscape.
- Learn how Sprott’s multidisciplinary team blends top-down sector analysis with bottom-up stock selection—and employs boots-on-the-ground analysis of mining operations.
- Navigate volatility and potentially seize opportunities across gold, silver, uranium and copper.
- Understand the unique advantages of Sprott’s active management approach to the METL and GBUG ETFs.
Don’t miss your chance to dig deeper with Sprott.
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