{"id":3359,"date":"2026-02-24T15:37:06","date_gmt":"2026-02-24T15:37:06","guid":{"rendered":"https:\/\/bondsandfonds.com\/index.php\/2026\/02\/24\/minings-new-reality-strategic-nationalism-gold-records-and-a-fractured-cost-curve\/"},"modified":"2026-02-24T15:37:06","modified_gmt":"2026-02-24T15:37:06","slug":"minings-new-reality-strategic-nationalism-gold-records-and-a-fractured-cost-curve","status":"publish","type":"post","link":"https:\/\/bondsandfonds.com\/index.php\/2026\/02\/24\/minings-new-reality-strategic-nationalism-gold-records-and-a-fractured-cost-curve\/","title":{"rendered":"Mining\u2019s New Reality: Strategic Nationalism, Gold Records and a Fractured Cost Curve"},"content":{"rendered":"<\/p>\n

The era of \u201csmooth globalization\u201d is over, and mining is entering a more fragmented, politically charged phase defined by strategic nationalism, according to speakers at S&P Global\u2019s latest webinar.<\/strong><\/p>\n

Jason Holden, who opened the \u201cState of the Market: Mining Q4 2025\u201d session with a macro overview, said the industry is operating in a world increasingly shaped by supply chain security and state intervention.<\/p>\n

\u201cFor decades we operated under a model of frictionless trade,\u201d said Holden, a senior mining analyst at the firm. \u201cThat era is over. We\u2019ve entered a world of strategic re-nationalization.\u201d<\/p>\n

While the base economic outlook remains resilient, with moderate growth and easing headline inflation, Holden warned that \u201csticky core inflation remains stubbornly high.\u201d <\/p>\n<\/p>\n

For mining companies, that has two major implications: higher capital costs and less room for the easy-money valuation surges seen in past cycles. Central banks, led by the US Federal Reserve, are no longer aggressively tightening, but are also not on a clear-cut path to interest rate cuts.<\/p>\n

\u201cWe\u2019re no longer on a predictable path of easing,\u201d Holden explained to listeners. \u201cThe market is now focused on if and when cuts might resume.\u201d At the same time, geopolitical disputes are increasingly spilling into trade policy. The conversation around critical minerals, he noted, has shifted decisively.<\/p>\n

\u201cIt\u2019s no longer just about economics,’ said Holden. \u201cIt\u2019s explicitly framed as national security.\u201d<\/p>\n

That shift is driving greater government intervention, subsidies, capital screening and \u201cfriend-shoring,\u201d where materials are sourced from politically aligned nations.<\/p>\n<\/p>\n

\n

Gold\u2019s insurance premium <\/h3>\n

Nowhere has geopolitical risk been more visible than in gold.<\/p>\n

The metal surged to fresh highs in early 2026 after setting 40 new records in 2024 and 53 more in 2025, a pace not seen since 1979. The price briefly pushed beyond US$5,500 per ounce at the start of the year.<\/p>\n

\u201cThe message from this price action is unmistakable,\u201d Holden said. \u201cIn an uncertain world, the market is paying a premium for insurance, and gold is the ultimate safe asset.\u201d<\/p>\n

While short-term flashpoints helped fuel the rally, the structural driver has been central bank buying. Since sanctions in 2022 prompted reserve managers to rethink US dollar exposure, official sector purchases have accelerated.<\/p>\n

\u201cThe sustained buying from central banks is the real engine behind the rally,\u201d Holden said.<\/p>\n

S&P’s base case sees gold averaging US$4,247 per ounce in 2026, with upside potential toward US$6,000 by 2027 in a more bullish scenario.<\/p>\n<\/div>\n

\n

Copper tightness, nickel politics <\/h3>\n

Luiz Amaral from S&P\u2019s exploration team said copper ended 2025 on strong footing, with London Metal Exchange (LME) prices reaching US$12,500 per metric ton in December.<\/p>\n

Supply-side tightness, a weaker US dollar and copper\u2019s growing role in electrification supported prices. The US decision to formally list copper as a critical mineral reinforced its strategic importance.<\/p>\n

S&P has lifted its 2026 copper price forecast to US$11,400 per metric ton, projecting a 543,000 metric ton concentrate deficit next year. However, the refined market is expected to move into surplus later in the decade as new smelter capacity ramps up. Longer term, the concentrate picture darkens again. <\/p>\n

\u201cOur base case shows a 3 million metric ton shortfall by 2036,\u201d Amaral said.<\/p>\n

Nickel\u2019s recent rally, by contrast, has been driven more by policy than fundamentals. The price broke above US$18,000 per metric ton in January after Indonesia reduced its 2026 production quota.<\/p>\n

\u201cThe market is responding emotionally to policy updates,\u201d Amaral said, noting that despite the rally, the broader market remains in surplus and LME inventories are building.<\/p>\n<\/div>\n

\n

Lithium rebounds amid persistent surplus <\/h3>\n

Lithium prices have also staged a sharp rebound, rising 57 percent in China between mid-December and mid-January on renewed demand optimism and supply concerns. Yet S&P expects the market to remain oversupplied for most of the decade, with deficits not emerging until the early 2030s.<\/p>\n

New supply from Australia, Latin America and China continues to outpace demand growth, even as electric vehicles account for roughly 75 percent of lithium consumption through 2035.<\/p>\n<\/div>\n

\n

Diverging margins <\/h3>\n

At the mine level, gold producers are enjoying some of the strongest margins in years, with prices rising faster than all-in sustaining costs. Silver has outperformed even more dramatically, climbing 154 percent in 2025 versus gold\u2019s 71 percent gain, compressing the gold-silver ratio to below 70.<\/p>\n

Battery metals face a tougher backdrop. <\/p>\n

\u201cLithium and nickel continue to face margin pressure as prices lag elevated costs amid oversupply,\u201d said Monica Ramirez from S&P’s mine economics and emissions team.<\/p>\n

Across 12 metals analyzed, S&P sees a structurally higher cost environment emerging due to inflation, energy expenses and maturing ore bodies. Precious metals retain the strongest buffers, while copper remains positive but increasingly sensitive at the upper end of the cost curve.<\/p>\n<\/div>\n

\n

Exploration at a crossroads <\/h3>\n

Despite record prices in some commodities, exploration spending tells a more cautious story.<\/p>\n

Global exploration budgets totaled US$12.4 billion in 2025, down 1 percent year-on-year. Adjusted for inflation, spending has slipped back to levels last seen nearly two decades ago.<\/p>\n

\u201cGold continues to dominate,\u201d Amaral said, accounting for roughly half of global exploration budgets. Lithium, once a standout, saw budgets fall nearly 50 percent amid weaker prices.<\/p>\n

More concerning is the structural shift away from grassroots exploration. <\/p>\n

In the mid-1990s, two-thirds of spending targeted generative programs. Today, that share has fallen to a record low as companies prioritize near-mine and late-stage work.<\/p>\n

\u201cWe are underinvesting at the very front end of the supply chain,\u201d Amaral warned. Without renewed grassroots spending, the long-term discovery pipeline could suffer.<\/p>\n<\/div>\n

\n

M&A: Quality over quantity <\/h3>\n

Mining M&A remained active into late 2025, though deal value normalized after earlier mega-mergers. Transaction value fell 45 percent quarter-on-quarter to US$16.1 billion, but deal count rose to its highest level in more than five years.<\/p>\n

Gold led activity, with buyers focusing on large-scale, long-life assets in low-risk jurisdictions. <\/p>\n

\u201cGold M&A today is no longer about simple volume growth,\u201d Ramirez emphasized to viewers. \u201cIt\u2019s about asset quality, jurisdictional safety and durable cashflow.\u201d<\/p>\n

As the webinar made clear, mining is navigating a landscape defined by geopolitical risk, tighter capital and structural cost pressures. For companies able to secure high-quality assets and control costs, opportunities remain, but the margin for error is narrowing.<\/p>\n<\/div>\n

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n

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The era of \u201csmooth globalization\u201d is over, and mining is entering a more fragmented, politically charged phase defined by strategic nationalism, according to speakers at S&P Global\u2019s latest webinar. Jason Holden, who opened the \u201cState of the Market: Mining Q4 2025\u201d session with a macro overview, said the industry is operating in a world increasingly…<\/p>\n","protected":false},"author":1,"featured_media":3360,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-3359","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/posts\/3359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/comments?post=3359"}],"version-history":[{"count":0,"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/posts\/3359\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/media\/3360"}],"wp:attachment":[{"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/media?parent=3359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/categories?post=3359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bondsandfonds.com\/index.php\/wp-json\/wp\/v2\/tags?post=3359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}