Green growth dilemma

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SENSITIVE RISK for entreprises

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

  • Fragmentation

  • Internationalization

  • Capital Intensity

  • Profitability

Updated in March 2024.
  • Increasing demand for metals, thanks to the greening of economies
  • Metals prices to remain above historical averages
  • Public policies focused on critical raw materials and minerals to support the sector
  • Firms' strong liquidity positions
  • Supply-chain weaknesses: The metals supply chain is both highly fragmented – since mining, refining and smelting can be scattered across the globe – and also highly concentrated as a few countries dominate activities (e.g. copper is extracted mostly in Peru & Chile; most of the refining occurs in China)
  • High exposure to (geo)political risks: Because of its supply-chain fragmentation across the globe, the sector is highly exposed to geopolitical risks. In some specific regions such as Africa or Latin America, the sector is also vulnerable to domestic social/political risks.
  • Increasing ESG pressures: Metals companies are facing increasing pressure from ESG regulation regarding their water use, pollution and biodiversity impacts.
  • High capital intensity: Firms in the sector need to spend massive capex in order to operate.