https://www.miningweekly.com

Plan for decades of high commodity prices, BlackRock says

13th January 2022

By: Bloomberg

  

Font size: - +

Commodities prices may stay high for decades as mining companies struggle to keep up with demand from the energy transition, according to BlackRock’s Evy Hambro.

Raw materials, and shares of some companies that produce them, hit record highs last year as massive global stimulus measures underpinned consumption. At the same time, the switch toward a greener world is creating fresh demand for metals such as copper, lithium and nickel.

That trend’s unlikely to change anytime soon, Hambro, BlackRock’s global head of thematic and sector-based investing, told Bloomberg TV on Wednesday.

“We’ve got decades worth of high rates of investment into infrastructure as the world seeks to decarbonise. That’s a widely held consensual view,” he said. “What we’re likely to see is strong demand that will keep prices at very very good levels for the producers for many years into the future, and that could be decades.”

His bullish comments echo those of banks including Goldman Sachs Group, which last week said that a commodities supercycle has the potential to last for a decade. While infrastructure spending will require large amounts of materials like steel and cement, the green revolution will also need more metals including cobalt and nickel for products like batteries.

Commodities such as coal, copper and lithium reached records in the past year, helping miners deliver huge profits and dividends. Yet Hambro still sees the mining sector as remaining undervalued, given its importance in providing the materials needed to decarbonise the global economy.

“It seems as though this core element of the transition has been completely ignored by many investors,” Hambro said. “At some point people will realize how essential these businesses are for the transition and capital will flow into them, and that should change the valuations.”

Edited by Bloomberg

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION