According to the Fund Manager, the sector is currently undervalued and there is a significant valuation gap between mining companies, especially those focused on metals such as copper.
BlackRock, one of the most influential investment funds in the financial sector, has urged climate-focused investors to reconsider their approach to the metals and mining industry. Evy Hambro, Global Head of Thematic and Sectoral Investing at BlackRock Inc., emphasized in an interview with Bloomberg that investors are missing a huge opportunity to benefit from the energy transition due to their outdated view of this sector.
According to Hambro, recent changes in the mining industry, such as reducing carbon emissions in metal production and a more disciplined focus on spending, have transformed the investment landscape. In addition, the cost of capital has fallen rapidly as governments have increased financing for miners, concerned about supply security amid the transition to a low-carbon economy.
Despite initial price increases following the post-pandemic COVID-19 recovery, the market has stagnated in the past year. However, Hambro emphasized that history is about the future, not the present. “History is not about now, but about what will happen in the next 10 to 15 years,” she said. According to her, the sector is currently undervalued and there is a significant valuation gap between mining companies, especially those focused on metals such as copper.
Hambro, who was critical of the excessive spending during the last industry boom, warned against wastefulness in the future, even as she predicted an upcoming supply shortage. “If you wanted to rebuild the global copper industry, you couldn’t do it for the market capitalization of the copper companies that exist today,” she argued.
BlackRock's statement has sparked a debate in the investment community about the underestimated potential of mining companies in the context of the energy transition. Experts are now closely watching how this new perspective will influence the investment strategies of those committed to sustainability and climate action.
