Future minerals: powering the next growth era

Copper: shining bright

Copper has risen more than 36% over the past 12 months to 30 September 2026. It’s held up even as higher bond yields, mixed manufacturing data, and energy prices (kept high by the Iran conflict) weighed on mining equities more broadly. While past performance is no guide to the future, we believe the fundamentals for the metal remain supportive. 

Global mine supply continues to disappoint, with permitting, a lack of skilled labour and rising costs all making new projects harder to develop. Higher incentives will be needed in the form of sustained higher copper prices. 

Supply struggling to keep pace

The International Energy Agency (IEA) estimates that copper supply could fall around 30% short of projected requirements by 2035. Mine production is expected to plateau later this decade as ageing assets are depleted. Average ore grades have fallen by around 40% since 1991. Only 14 significant discoveries have been made in the past decade, compared with 225 over the previous 23 years, and new deposits can take close to two decades to bring into production. 

Meanwhile, demand continues to grow. Electrification remains the dominant driver, while AI is adding a second demand engine. By 2030, data centres alone could account for 2% of all global copper demand and 3% of rare earth demand [1].

Lithium: a sharp rally, now cooling

If copper is a good example of a tightening market, lithium shows how sentiment can move in the other direction. Lithium has been one of the most volatile future minerals over the past year. Its price is up more than 80% over 12 months but has fallen 17% over the past six months – including a 14% drop in September alone [2].

The rally came from a rapid rise in demand for battery energy storage systems, combined with some supply constraints. We expect those near-term tailwinds to unwind, while growth in electric-vehicle demand looks set to soften. Concerns about lower Chinese demand next year have also had an impact on sentiment. 

We believe current lithium demand can be met by available supply, so we are cautious in the short term. Over the longer term, however, the story appears stronger. Recent Chinese government guidance still calls for a significant expansion in battery capacity, and the IEA expects lithium demand to grow fivefold by 2040 under current policy settings. 

For investors, we favour a selective approach to lithium, focused on low-cost producers and businesses that depend less on the commodity price. 

Critical minerals become strategic assets

Geopolitics is also reshaping the market. China is the leading refiner for 19 of the 20 strategic minerals tracked by the IEA, with an average market share of around 70%. For magnet rare earths, it accounted for around 60% of mining and 91% of refining in 2024, according to the IEA. 

China tightened export controls on rare earths, tungsten and other strategic minerals in 2025. Since then, carmakers, defence companies and governments have stepped up efforts to secure alternative sources. The number of critical mineral policies worldwide has risen from 131 in 2015 to more than 630 in 2025 [3].

Uranium remains an area of focus. Uranium shares have stayed weak, but we see a disconnect between share prices and contracted prices. After years of underinvestment, we expect the market to keep tightening as new nuclear capacity starts up. 

What does this mean for investors?

Our approach focuses on equities rather than physical commodities. Returns can come from higher metal prices, but also from production growth, cost discipline, project execution, dividends, and merger and acquisitions. 

Asset quality, jurisdiction, balance-sheet strength and execution will decide which companies can turn supportive markets into lasting shareholder returns. In our view, valuations across parts of the sector don’t yet reflect the strategic value of high-quality assets. 

This isn't a tactical trade. The world is likely to need substantially more copper, lithium, uranium, rare earths and tungsten between now and 2050. The question for long-term investors is whether their portfolios are positioned for it – and many are not.

[1] Source: IEA, ‘Energy and AI’, April 2025.

[2] Source: Bloomberg, data as at 30 September 2026.

[3] Source: IEA Critical Minerals Policy Tracker, July 2026.