Energy Minerals

The Energy Minerals sector encompasses companies engaged in the exploration, extraction, processing, and distribution of natural resources vital for energy production, including fossil fuels and critical minerals. The sector forms the foundational supply chain for powering industries, transportation, and homes, making it a cornerstone of the global economy.

The performance of the Energy Minerals sector is influenced by economic, technological, and geopolitical factors. A primary driver is the escalating global demand for critical minerals, propelled by the rapid expansion of electric vehicles (EVs) and renewable energy technologies. Technological advancements are also shaping the sector, with innovations in mineral processing and the integration of artificial intelligence (AI), machine learning, and blockchain. Regulatory changes and geopolitical considerations play a significant role, as governments worldwide implement policies to secure domestic supply chains and reduce reliance on concentrated production regions. Increasing emphasis on Environmental, Social, and Governance (ESG) factors is pushing the industry towards more sustainable mining practices.

Key sub-industries include Integrated Oil and Gas companies, Oil & Gas Production firms, Oil Refining/Marketing, and Coal mining. Increasingly prominent are companies focused on the extraction and processing of critical minerals. Notable companies include Exxon Mobil Corporation, Baytex Energy Corp, Arcaadium Lithium, BHP Group, Rio Tinto, Fortescue Metals, Mineral Resources, Evolution Mining, Newmont, and Dorchester Minerals, L.P.

In the first quarter of 2025, the natural resources sector saw its real gross domestic product (GDP) increase by 1.6%. Prices for minerals and mining increased by 2.6%, with metallic minerals extraction up 8.4% and non-metallic minerals extraction up 2.9%. The energy subsector also saw price increases. Looking ahead, the outlook for the Energy Minerals sector is shaped by the ongoing energy transition, with demand for key critical minerals projected to continue its strong growth. Commodity prices are generally projected to decline in 2025. The sector is also expected to see continued merger and acquisition activity and increased adoption of autonomous machinery and blockchain technologies.

Investing in the Energy Minerals sector is characterized by its cyclical and commodity-based nature, which can lead to unpredictable earnings and dividend streams. The sector is exposed to specific risks including environmental concerns, evolving government policies, supply chain disruptions, and taxation changes. The long-term structural demand driven by the energy transition presents significant opportunities, attracting institutional investors willing to navigate the sector's complexities and contribute to closing the capacity gap in critical mineral supply.