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On this page

1. Macro Themes Driving the Sector

  • 1. Macro Themes Driving the Sector
  • 2. Precious Metals: The "Next Phase" of the Bull Market
  • 3. Industrial & Speciality Metals
  • 4. Valuation and M&A Dynamics

On this page

  • 1. Macro Themes Driving the Sector
  • 2. Precious Metals: The "Next Phase" of the Bull Market
  • 3. Industrial & Speciality Metals
  • 4. Valuation and M&A Dynamics
Report/February 24, 2026/2 min read/bakersteelcap.com

Outlook 2026: Miners in the spotlight – Are we at the start of a multi-year upcycle for commodities? | Baker Steel Capital Managers

Source
Source

1. Macro Themes Driving the Sector

The report identifies three core pillars supporting the mining industry's growth:

  • The New Industrial Revolution: Rapid expansion in AI, electrification, and clean energy storage is creating a "demand boom" for critical minerals.

  • Geopolitics & Industrial Strategy: Governments have shifted from viewing metals as mere commodities to treating them as strategic inputs essential for national security and defense.

  • Macroeconomic Shifts: Persistent inflation and fiscal dominance are driving investors toward real assets, particularly precious metals.


2. Precious Metals: The "Next Phase" of the Bull Market

Precious metals were standout performers in 2025, and the report expects this momentum to continue as miners enter a period of high profitability.

References

  1. Original source (bakersteelcap.com)

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Reading

Published
February 24, 2026
Read time
2 min read
Progress0%
  • Gold: Gold prices rose +64.6% in 2025, while gold miners surged +163.0%. With physical gold prices over $4,000/oz and all-in sustaining costs (AISC) averaging around $1,800/oz, producers are seeing massive margin expansion.

  • Central Bank Demand: Over the last five years, gold's share of global foreign reserves has increased by 15%, while US dollar holdings have declined by 3%. Large economies like China and India remain significantly underweight compared to the 34% average seen in advanced economies.

  • Silver & PGMs: Silver reached approximately $80/oz in late 2025 and remains in a structural deficit for the fifth consecutive year. Key drivers include solar photovoltaics, EVs, and data centers. Platinum is also in a deficit due to supply concentration in South Africa and robust demand for catalytic converters.


3. Industrial & Speciality Metals

The report highlights a "geopolitical scramble" for supplies as demand outstrips decades of underinvestment.

  • Copper: Prices exceeded $12,000 per tonne in late 2025. Copper is facing its largest supply deficit in 22 years in 2026. Demand is surging because AI data centers require roughly double the copper of conventional ones, and a single EV uses four times more copper than a traditional vehicle.

  • Battery & Transition Metals: Uranium, Rare Earth Elements (REE), and Lithium are critical to the energy transition. While lithium has seen supply surpluses recently, the report expects a turnaround due to accelerating long-term demand.


4. Valuation and M&A Dynamics

Despite strong performance, the sector remains significantly undervalued and under-owned by investors.

  • Relative Value: Mining equities trade at roughly 7x EV/EBITDA, compared to 22x for tech equities and 18x for the broader S&P 500.

  • CAPEX Cycle: Capital expenditure in mining is at extreme historic lows relative to gold prices, suggesting that the supply-side response to higher prices will be delayed.

  • M&A Wave: High cash flows and low valuations have triggered a surge in deal-making. Notable 2025 deals included Gold Fields' $2.4 billion acquisition of Gold Road and Coeur Mining's $1.7 billion takeover of SilverCrest

"Brookfield's the largest infrastructure owner in the world... We drew a pipeline and we showed all the different components of the payments ecosystem on a pipeline and said it's like a pipe that moves any commodity except what it's moving…