Non-Energy Minerals

The Non-Energy Minerals sector includes companies involved in the exploration, extraction, processing, and distribution of minerals and metals used for purposes other than energy generation. These materials are fundamental inputs for various downstream industries, including construction, chemicals, automotive, aerospace, machinery, and electronics, and are crucial for industrial, social, and technological progress globally.

Performance in the Non-Energy Minerals sector is significantly influenced by global economic growth, urbanization, demographic expansion, and fiscal stimulus plans. Technological advancements and the global transition towards a cleaner and more sustainable future are major catalysts, especially the demand for critical minerals like lithium, cobalt, and nickel. Geopolitical factors and supply chain diversification efforts are spurring exploration, while labor shortages encourage investment in automation.

The Non-Energy Minerals sector is divided into construction minerals, industrial minerals, and metallic minerals. Construction minerals serve local markets, industrial minerals supply diverse industries, and metallic minerals yield metals like copper and gold. Leading global companies include BHP Group Limited, Rio Tinto Plc, and Glencore Plc. In the UK, gold-focused companies like Metals Exploration have performed well, while in India, major players include Ultratech Cement Ltd and Tata Steel Ltd.

In recent months, the Non-Energy Minerals sector has demonstrated strong performance in certain segments, with the FTSE small-cap mining sector outperforming many others in 2025. Gold prices have seen a significant increase, but investment momentum in critical mineral development showed signs of weakening in 2024. The outlook remains positive, driven by the accelerating global energy transition and growing demand for critical minerals, though potential supply shortfalls are projected for copper and lithium. Geopolitical considerations and supply chain diversification will continue to shape the sector.

Investing in the Non-Energy Minerals sector involves a distinct risk/reward profile due to its cyclical and commodity-based nature, leading to volatile valuations and unpredictable earnings growth. Dividend trends can be unreliable, and valuation norms are highly variable. Key risks include commodity price volatility, project development risks, and funding challenges. However, the sector offers long-term structural growth potential driven by the increasing demand for critical minerals.