Speaking at a mining investment event his week, Liam Twigger, Managing Director of PCF Capital Group and Sander Grieve, Partner at Bennett Jones LLP both pointed to the renewed enthusiasm of generalist investors in the mining sector. Financings have been on the rise this year, partly fueled by generalist investors and with their funds spreading beyond the expected gold markets and out to a broader range of commodities.
Funding has certainly returned to the mining sector in Canada, and Twigger notes that he’s seen the capital markets in Australia follow a similar route to those in Canada, with investors displaying particular interest in the junior sector. He explains how prior to 2020, the market was missing “animal spirits,” or that more intense investor excitement which can prop up the entire industry. That said, he’s seen that finally arriving this year, noting today’s mining market as the best since 2009. And with COVID-19 recovery underway, Twigger expects the funds to continue to flow for the next year or so.
Grieve notes that infrastructure spending has been a big impetus to boost the mining sector this year and notes that the role of metals and mining in renewable energy and EVs in particular as a large factor here. He states that “You don’t get green vehicles without a lot more of the commodities that our industry produces” and the industry should be more proactive about promoting its role in global decarbonization, especially as a way to gain more generalist investment.
They both take optimistic views for the industry looking forward to 2021. Grieve notes that industrial metals may lag amid the COVID-19 recoveries over the short term, but he is bullish on nickel, copper and iron as economies start to rebound.