‘It is now metal that allows us to move towards a greener future’
The focus of copper electrification and therefore energy transformation, and Canadian investors now have a new way to gain exposure: This week, Toronto-based Horizons ETFs Management (Canada) Inc. launched the country’s first exchange-traded fund, a bundle
According to market research site Kitco, the price of versatile base metal has more than doubled since March 2020, rising from US $ 2.20 per pound to about US $ 4.20.
“Copper is a metal that allows mankind to move from the Stone Age to the Bronze Age, and it is now the metal that allows us to move toward a greener future,” Steve Hawkins, chief executive of Horizons ETF, said in an interview. . “It’s in almost everything and so it gives you exposure to all the big investment themes.”
The metal has so much use that it has been described as a bellwether for global economic expansion.
As energy conversions unfold, and some of the world’s largest economies set goals to reduce the use of fossil fuels, demand for copper, one of the major metals used in it, is expected to increase.
Copper is a metal that allows mankind to move from the Stone Age to the Bronze Age
The International Energy Agency, a Paris-based organization created in 1974 to protect against oil disruptions, ranked it as one of the most important minerals for clean energy technology, including solar photovoltaic panels, wind turbines, bioenergy, power networks and Needed for electrical power. Vehicle and battery storage. According to the agency in its “Sustainable Development Scenario”, an estimate of what it would take to meet some of the world’s climate targets, copper demand increased 28-fold.
The Horizons Copper Producers ETF, which started trading under the COPP mark on the Toronto Stock Exchange this week, has a management fee of 0.65 percent. This is indicated by 15 North American mining companies, including large diversified producers such as BHP Group Limited and Rio Tinto Limited, and companies focusing on copper, including Freeport-McMorran Inc.
Hawkins is marketing the ETF as a bet on energy change, since “without copper the planet’s greening cannot happen.”
Of course, some miners in its basket bring a lot of exposure to fossil fuels. Vancouver-based tech resources, for example, account for about 60 percent of its revenues for steel-making coal and oil, while copper and zinc each account for about 19 percent.
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At the same time, other companies in the basket are embroiled in controversy over alleged destructive effects on the environment. MiningWatch, a corporate watchdog, has criticized The Metals Company Inc., which may be the first company to scale the seabed. Another Horizons copper basket company, Northern Dynasty Minerals Ltd., aims to build its gravel mining project in Bristol Bay, Alaska, in a place where critics say the main aquifer of the world’s ski salmon is both Miningwatch and Donald Trump Jr.
No company still produces copper.
Hawkins acknowledged that some miners have a mixed record on the environment, but stressed that copper is still important for energy transformation.
“Investors are asking for copper exposure,” Hawkins said. “Individual companies really had no choice but to buy their own.”
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