Mining & Metals

Supply chain crinkles continue to cause issues in the metal and mining sector. Demand for certain raw materials that saw a marked reduction during the pandemic, such as steel, have recovered. Shortages have shifted the supply versus demand balance, with metals and other natural products selling at a premium across the sector.

Headwinds persist, however, with the performance of the sector inextricably linked to the success of the wider economy. The economic downturn will lead to a reduction in aggregate demand, while the potential of a European energy crisis could hit demand for raw materials that can't be processed. As a result, we expect raw material prices to continue trending towards pre-pandemic norms.

A pivot towards renewable technologies is having an immediate and lasting effect on the sector. The environmental impact of raw material extraction and metal production processes will face ever-greater scrutiny, with anything less than 'best-in-class' operations and plants likely to become unviable. The growing demand for advanced batteries and technology products is going to require new sources of hard-to-acquire raw materials such as cobalt. Extracting these vital new materials in an environmentally and ethically responsible way will be critical and require significant investment.