The transition to clean energy sources will heighten the demand for critical minerals. This puts strategic global partnerships, such as the United States and Africa, in the forefront.
It’s a combination that the world needs in order to meet the ever-growing demand for critical minerals. A United States Institute of Peace (USIP) article specifically highlighted the benefits of a U.S.-Africa partnership.
At the core of this partnership would be the U.S. developing and utilizing Africa’s critical minerals supply to meet global demand. This would help wean countries off Chinese critical minerals and processing.
“Demand for the critical minerals powering the world’s clean-energy technologies, consumer goods and defense applications is skyrocketing,” the article said. It noted that demand will rise for critical minerals such as cobalt, copper, lithium, and manganese.
“To help meet demand and diversify supply, Western policymakers are increasingly looking to Africa, home to about one-third of the world’s mineral resources,” the article added.
One additional benefit of this partnership would be the growth of Africa’s economy.
“This growing international attention to developing Africa’s critical minerals could help lead to a more prosperous and stable continent,” the article added further. “Many African countries have high hopes for what their mineral resources can do for their countries’ development trajectory. Indeed, some senior U.S. policymakers have spoken in bold terms as to the role Western-backed mining could have in transforming African economies.”
Given the growth potential in the critical minerals industry, an exchange traded fund (ETF) opportunity exists for the Sprott Energy Transition Materials ETF (SETM). SETM presents investors with an opportunity to capture the growth as it focuses on companies positioned upstream in the supply chain that stand to benefit from the increased investment in the critical minerals required for the clean energy transition.
A Well-Diversified Critical Minerals Play
Per its fund description, SETM seeks to provide results that correspond to the total return performance of the Nasdaq Sprott Energy Transition Materials Index. The index tracks the performance of a selection of global securities in the energy transition materials industry.
The fund offers a pure-play fund to capitalize on the transition to clean energy use, setting up the increased demand for critical minerals. Mining will also be necessary for other minerals such as uranium, copper, nickel, silver, manganese, cobalt, graphite, and other rare earth elements. As such, this gives SETM further diversification of its holdings.
For more news, information, and analysis, visit the Gold/Silver/Critical Materials Channel.
