Geopolitics creates risks but also BIG opportunities 📝

Posted on by Synergy Resource Capital

Time to read:

2–4 minutes

Hey hey! Copper started October strong, nearly at $4.5/lb, yet lost some steam by the end of the month and all through November. The lithium rut continues but deals are flowing unscathed. On the flipside, precious metals are on a roll: gold continued its joyride closing November at ~$2,640 and silver reached an 11-year high closing just under $30.

In focus

As the world grapples with increasing geopolitical instability, investors try and make sense of it all. We discussed this at length during a panel at IMARC with Pala Investments, Orion Resource Partners, Monetary Metals, MMG and Argus Media*. Risks seem to be rising constantly and this may cause investors to overemphasize the downside instead of the opportunities created daily. And that’s where one may falter.

📊 Financing Mineral Development in a Dynamic Geopolitical Era. IMARC 2024 (recorded by host)

I truly believe that you can operate (and invest) anywhere... if you know how to. I learned this lesson from Robert Friedland, but that’s a story for another time. For now, what I’ll say is that any jurisdiction can potentially give you sizeable returns if you truly understand how things work, what the legal system is, how to protect cash, your people, etc. Take the safest place on earth and you may fail, if you have no clue. We created a new section for geopolitics in our blog and we’ll be talking more about this.

During the panel, we also made strong requests from governments, as the glacial pace of permitting is hurting the industry globally. Mines, on average are taking more than 16 years from discovery to production (with the recent years edging up to 18).

In the news

Lithium keeps providing surprises. While prices for chemicals derived from lithium and used in batteries remain weak, major players are taking advantage of the severely undervalued assets. The latest is Rio Tinto announcing the acquisition Arcadium, after rumours had surfaced a few days prior.

These assets in Argentina have been the subject of multiple deals but given the current acquirer, they may finally be in their last home. It has been a long time since the country has been a target of so many news, from investments to acquisitions. The new president has been busy attracting investors. In the US, Lithium Americas finally received approval for their DOE loan that alongside GM‘s revised investment effectively funds the construction.

Teck highlighted the need for more critical minerals in the West. Amen!

In addition, Africa also grabbed headlines as Zijin bought a gold mine in Ghana from Newmont for $1B, and partners Sayona and Piedmont are merging.

Geopolitics is set to remain a complex puzzle to solve. Governments need to stay close to where the future is taking us so that they can move in support of these capital-intensive projects, if the energy transition has any hope of staying on track.

*We’ll post the recording of the IMARC session as soon as it becomes available. You’ll want to watch as it was juicy!

Meanwhile…

ICYMI, these are now live on this blog:

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And that’s it for today.

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*corporates and sophisticated investors

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