Olivia Markham, Co-Manager of the BlackRock World Mining Trust, comments on the outlook for the mining sector.
“Our outlook for the mining sector remains constructive, supported by favourable supply and demand dynamics across most major commodities, with particular strength in gold and copper. Copper demand is accelerating, driven by electrification, rising power consumption, the rapid build-out of AI-linked data centres and the broader energy transition. At the same time, supply remains constrained. Operational disruptions and the multi-decade lead times required to bring new projects online continue to underpin structural deficits in key base metals.
“Falling U.S. interest rates are another supportive factor. Lower rates tend to boost the appeal of non-yielding assets such as gold and silver, while also reducing financing costs for industrial and renewable energy projects. A weaker U.S. dollar further reinforces this backdrop by making dollar-denominated commodities more affordable globally, supporting demand and pricing.
“Geopolitics and resource nationalism are increasingly shaping the sector. Governments and corporates are prioritising supply security over pure cost efficiency, building strategic stockpiles of critical minerals and seeking to mitigate future supply shocks and trade restrictions.
“Meanwhile, mining companies are maintaining capital discipline. Rather than pursuing aggressive production growth, many are focused on cost control, debt reduction and shareholder returns. This approach constrains new supply and is encouraging a ‘buy rather than build’ mindset to secure assets, which we believe creates selective opportunities in M&A.
“Gold remains our largest sub-sector exposure, and we see an attractive earnings outlook for producers over the next 12 months. While we expect gold to continue trending higher, gains are likely to be more moderate than in 2025. The structural drivers remain firmly in place, including elevated government debt levels, currency diversification trends, geopolitical risk and strong central bank buying. Looking ahead, we believe performance among gold miners will be driven more by company-specific factors – such as disciplined capital allocation, strategic growth and cost control – rather than simply movements in the gold price. We are positioning the portfolio towards companies that can deliver sustainable growth, extend mine life and prioritise shareholder returns.”
