Five Metal Miners Fuelling the Shift to Clean Energy
As the world transitions to clean energy, ‘green’ metals are set to be in record demand. Renewable energy requires far more metal than fossil fuels. Meaning key green metals – like copper and lithium, which are used to build electric wires and batteries – are forecast to remain in short supply for years to come.
Below we look at five global leaders of green metal production:
Ganfeng Lithium (Shenzhen: 002460)
- Market Cap: 23.40BN (USD)
- PE: 10.71
- Index Weight: 5.99%
Ganfeng is a one-stop-shop for lithium exposure. It does everything in the lithium-ion battery supply chain. It mines and produces lithium from both brine and rock. It makes lithium batteries. And then recycles them. Other lithium companies like Albemarle and Pilbara tend to focus on just the lithium production. Ganfeng is the world’s second largest lithium producer after Albemarle.
China Northern Rare Earth Group (Shanghai: 600111)
- Market Cap: 14.30BN (USD)
- PE: 14.65
- Rare earth metals
- Index Weight: 3.20%
China Northern Rare Earth group (CNREG), a listed subsidiary of Chinese mega-corp Baogang Group, is the largest supplier of rare earth elements (REEs) in the world. Based in Baotou, Inner Mongolia, the company operates in Bayan Obo, the world’s most sizeable rare earths mine, containing roughly 70% of the global reserve of REEs. With a refinery and mining complex the size of a small city, CNREG contributes to more than 20% of China’s 190,000 tonnes of REEs output annually. China accounts for 90% of global REE processing, with most Chinese REE miners being partly state owned.
Lynas Rare Earths (Sydney: LYC)
- Market Cap: 5.15BN (USD)
- PE: 15.51
- Rare earth metals
- Index Weight: 2.22%
Rare earth metals are dominated by Chinese companies (most of which are partly state owned). Lynas however is the only significant producer of separated rare earth materials outside of China. The Lynas Mt Weld mine in Western Australia has one of the biggest known rare earth deposits. An Australian Financial Review article featuring CEO, Amanda Lacaze stated Lynas “has by far the greatest knowledge and experience outside China in the tricky business of downstream rare earths processing, something recognised by the US Department of Defence and the company’s Japan Inc backers.” The company has received US DoD subsidies as a bulwark against Chinese rare earths production.
Iluka Resources Limited (Sydney: ILU)
- Market Cap: 2.47BN (USD)
- PE: 7.26
- Rare earth metals
- Index Weight: 1.03%
Iluka has historically specialised in mining zircon, which is used in ceramics and paint, and produces 30% of global supply. However, it has become an investor favourite recently after revealing big plans in rare earths. The company is building one of Australians biggest rare earth refiners, for which it has also received a $1.25 billion non-recourse loan from the Australian government (i.e. at a highly subsidised interest rate).
Eramet (Paris: ERA)
- Market Cap: 2.16BN (USD)
- PE: 1.71
- Nickel & Manganese
- Index Weight: 0.19%
Eramet is France’s largest mining company. It was founded in 1880 with backing from the Rothschild family and has been majority owned by the Rothschild’s for most of its history, until they sold it in the late 1960s. The firm specialises in nickel and manganese, with vast mines in New Caledonia and Indonesia. As of 2021, it was the largest manganese and the seventh largest nickel producer, based on kilotons of production. Nickel is a crucial element for the energy transition as it provides cathodes for batteries and is needed to alloy steel, which is used extensively for wind turbines.
GMTL: For those wishing to invest in energy transition metals miners, Global X Green Metal Miners ETF (GMTL) provides a solution. Gain exposure to global companies which produce critical metals for clean energy infrastructure and technologies, including lithium, copper, nickel and cobalt.
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