It’s good to be back home…
After spending a month touring around parts of Europe, I am exhausted.
Let me tell you, going through six countries, attending two weddings, and endless walking has worn me out. But it was certainly worth it!
Getting to see the magnificence of the Vatican, the brutal history of the Acropolis, and the modern wonder of the Louvre was incredible. And yet, the one thing I saw that stood out to me the most in Europe was the transport…
People’s choice in cars, for example, couldn’t be more different to Australia. The bulky SUVs and trucks were all replaced with tiny smart cars and electric vehicles. You basically have to have a small zippy car in any major European city because of how old and squashy the roads are.
It wasn’t just the cars, though.
I don’t think I went anywhere without seeing a bike or scooter every couple hundred meters. And even if you don’t own one, there were always dozens of publicly available ones for hire.
After talking to one local Parisian, I found out that it costs him just €7 a month to hire the many e-bikes around his city. A kind of bike that doesn’t even require that much pedalling thanks to its tiny battery-powered motor. And don’t even get me started on all the electric scooters whizzing around the streets…
Europe really does feel like it’s living in an electrified future. And with this week’s approval of a ban on petrol and diesel cars by 2035, it’s only going to become more electrified.
The great mining pivot
Having seen all of this in Europe, all I could think about is how important mining has become.
It’s hard to appreciate just how big of a pivot we’re seeing in society when you only look at it from an Australian perspective. Of course, I’m not going to suggest Europe is some sort of EV utopia. They still have plenty of issues and hurdles to deal with.
But what it did reinforce to me is the strong push to move away from oil and gas to greener solutions — a decision that comes with plenty of its own pros and cons.
For investors, though, the politics of this transition is largely irrelevant. What really matters is what the miners are doing, and as Bloomberg noted earlier this year, a major pivot is underway:
‘The mining sector is also in the middle of its biggest strategic pivot since the China-led supercycle at the start of this century. The largest producers are at various stages of exiting or winding down fossil fuel operations, while expanding in commodities such as copper, nickel and lithium that will be central to decarbonizing the global economy.’
Whether you’re on board or not, it is what’s occuring.
Big miners are increasingly putting up big money to move away from fossil fuels and towards green materials. That’s why lithium continues to be one of the hottest sectors in the Aussie market right now.
What’s far more interesting, though, is how much catch-up we’re seeing from the big miners. The size and scope of mergers and acquisitions in the mining sector at the moment is massive.
As Selva discussed yesterday, the $5.5 billion bid for lithium miner Liontown is just the latest example. Check out the full article here, if you missed it.
Perhaps the most surprising detail of this bid is that Liontown rejected it!
Despite offering a 63% premium for the takeover, Liontown shot down the deal because they believe it undervalued the company and their assets. That should go to show you just how crucial and valuable lithium is to the mining sector’s future.
Because a lot of the world’s biggest miners failed to anticipate this lithium boom, they’re trying to buy their way into the opportunity. And it’s not just lithium they’re after…
Takeovers galore
Copper, nickel, zinc, rare earths, cobalt, and bauxite (aluminium) are just some of the many ‘green metals’ in hot demand. And just like the Liontown takeover bid, we’re seeing some big offers to secure access to these minerals.
Andrew Forrest’s Wyloo Metals, for instance, recently made a $760 million bid for Mincor Resources, a nickel miner that’s in bed with Forrest’s key competitor BHP.
That comes after BHP themselves finalised its takeover of Oz Minerals late last year — a deal that was also about nickel and copper.
Don’t forget about Rio Tinto either, because despite some roadblocks, they managed to secure a majority stake in Mongolian copper miner Turquoise Hill.
And these are just some of the more notable deals.
Behind the scenes, we,re seeing a flurry of mergers and acquisitions for junior miners…something that’s likely to only intensify if central banks really do pause on rates due to banking concerns.
So, for Aussie investors, it’s time to act…
The junior mining sector has always been cutthroat in terms of its speculative gains and losses. From one day to the next, you can witness incredible share price moves. That’s why it can deter so many investors from wading into the sector, because it’s not for the meek.
But, as long as you know how to navigate the sector, it can be a major moneymaker.
That’s where experts like our own James Cooper can help. With his extensive experience and knowledge of the mining industry, he knows better than most how to identify the best junior explorers.
And tonight, he’s going to show anyone who is willing to listen how he does it!
At 7:00pm (AEDT) tonight, James will explain in detail how he picks the crème de la crème of junior miners. A process that gives his readers the best odds possible to find and invest in the small miners that are being gobbled up by takeovers right now.
If you haven’t already secured your spot, you should do so now. Because whether you’re familiar with this sector or not, you won’t want to miss what James has to say.
Regards,
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Ryan Clarkson-Ledward,
Editor, Money Morning
