Friday Morning Coffee 152: Popping commodities

040621 Friday Morning Coffee

Friday Morning Coffee 152: Popping commodities

We have been hunting over the past months for investment opportunities in Europe benefitting from the rise in industrial and precious metal prices. There are indeed powerful drivers behind surging commodity prices like inflationary pressures, resuming economic activity after Covid-19 and increased need for commodities for the green transition, for example batteries in e-cars, investments in power grids and wind energy.

As was to be expected, some miners have been popping up in our screenings. Nevertheless, the main issues we face while looking closer at these companies are geopolitical risk due to the regions where the mines are located, ESG issues linked to some historic projects, sometimes dubious management styles, and volatile corporate performance over time.

We think, however, to have found one exception: the Swedish miner and smelter Boliden AB. History draws back to 1920s, when an ore body was discovered which then became the Boliden mine. Boliden is mining mainly copper, gold and zinc in Sweden, Finland, and Ireland. It also runs smelters in the Nordics.

(See attached pdf)