London-based private equity group Appian Capital Advisory will invest $ 775 million in the mining industry, anticipating severe shortages in base metals and especially copper by 2040. More about this on Sunday writes Financial Times.
“We could have raised significantly more money, but we only wanted to take what we thought we could invest,” said Michael Sherb, Appian founder and CEO.
After a decade of investment neglect, some commodities are once again popular with pension funds and money managers as they seek inflation-protected deals in the market and companies that are expected to benefit from cleaner energy and decarbonization.
The electrification of transport and the rise of renewable energy sources should lead to an increase in the consumption of a number of metals, including nickel and copper, with the price of the latter hitting a 7-year high last week and exceeding $ 8,200 per tonne.
While meeting the demand for metals will require huge investments in the development of new mines or the expansion of existing deposits, the decision of the investment fund Appian indicates a relatively rare entry of private capital into the mining sector.
“If the entire world switches to electric vehicles by 2040, every pound of the world's known reserves of copper will be used up,” said Mr Shcherb, who was once an investment banker at JPMorgan. “We have not had any major copper discoveries in the last decade. So there will clearly be a mismatch between supply and demand. ”