The Big 5: Major Trends Driving Demand

On this next slide, we cover what we internally call the Big 5. What are those cyclical, secular, and structural drivers that support our industry. Now, whether we start at the tip of the spear with decarbonization and some of the trends around energy transition being much more metals intensive than historic fossil fuel driven energy generation and transmission, decarbonization is a game changer within our industry. And the speed at which mines and mine development will need to proceed over the next couple decades to meet decarbonization trends, is truly unprecedented. So, there’s a huge ask right at the top. It’s a structural driver.

Now, underneath that we have just general consumption. We highlight that there are six, six and a half billion people within upper and lower middle-income countries. And those are the income stratifications in which people around the world go from largely an agrarian or a rural or remote lifestyle or community and start to consume metal in products, in homes, in vehicles, and in transport. It truly is transformational what’s happening across middle income around the world. And just the growth of that sector supports the volumetric growth and demand for metals and mined material.

The third, and it’s the only cyclical trend that will highlight here on the table, is underinvestment. You know our industry has suffered through a decade plus period of slow growth and underinvestment in mining expansion and new assets, and that under investment is really starting to bite at the moment and we’ll provide some detail and some stats to help substantiate that point. But really what we’re observing is the reluctance for operating mines as well as investors to commit new capital to new projects, and that’s creating a tremendous opportunity for RCF to be early into the better investments that we see across our industry.

Fourthly, geopolitics. It won’t escape anyone’s attention that the geopolitical situation is changing and it’s becoming much more metals intensive in terms of what the United States, what the EU, what China, and what Russia’s investing in. Some of the spending that’s going into directed industries and that’s not just necessarily military, it’s semiconductors, and it’s electric vehicles, touches some of the other broader themes highlighted on the slide. But it’s important to realize that geopolitical competition is on and then it’s going to drive much greater demand for metals and mined material going forward.

And then finally, sustainability. Think of this as the ESG, but also think about this as metals and mined products. It’s being probably the most recyclable and sustainable across the six primary areas of natural resources or commodities. So, with that we take a lot of pride in terms of what we’re investing in, in terms of most of the copper, most of the aluminum, you can just pick your metal, but once it’s above ground, it enters the circular economy and it comes back around and it broadens the base upon which global economic growth is built. So, these big 5 as we call them, they’re combining to create an environment in which the investment opportunities, as well as, the exit opportunities for RCF are improving by the month, as well as, we foresee a situation in the next one to two years that we’re going to move into the growth phase.