April 18, 2021

Mining ETFs that have enjoyed from the Electric Vehicle ESG

Friday witnessed some miner-related exchange-traded fund dip to their lowest since the year began. This sector has been on a good streak after clean energy technology utilities declared their desire to venture them once again. The VanEck Vectors Rare Earth/Strategic Metals ETF (REMX) dropped by 3% on Friday after recording a 50-day average performance. REMX grew from 20.6% to 128.2% on an annual basis through the last year. Bloomberg report indicates that the miners of rare earth minerals and uranium refiners have witnessed a surge in their market after the electric vehicle developers venturing this technology. This category decided to dive into these minerals in the quest to minimize environmental pollution and achieve investment strategies.

Initially, lithium miners enjoyed the cash coming in from the electric vehicle market and the battery developers who were relying on this element to make their products. However, the transition to green energy aroused the identification of the areas where the new technologies still contributed to environmental degradation. Currently, rare mineral excavators are also receiving a similar interest from the electric vehicle companies. This move gained tenacity after the Biden administration took over the leadership of the US and declared its desire to make the country and its industries emission-free. Such strategies will require the exploration of clean energy alternatives and technologies affiliated with these rare minerals.

A perfect example is the shares of MP Materials Corp., which was appreciated by four times after Joe Biden won the US elections. An expert from Morgan Stanley, Carlos De Alba, stated that this company is playing its role in the uptake of electric vehicles and the demand for wind turbines to generate clean energy. He added that anybody who enjoys electric vehicles will definitely admire MP. The rare metals have also gained admission into electric vehicle batteries, wind turbine technologies, and missile control systems. Additionally, the limited supply of these metals globally will factor into the schematics of this industry. China boasts of owning the highest percentage in the production of these metals.

The other industry that might start making huge profits is uranium production. Investments in this sector have grown considerably with some governments also chipping into its development. GJL Research analyst Gordon Johnson told Bloomberg that the demand for uranium is rising after years of caution pending the nuclear catastrophe in Fukushima, Japan. This trend started emerging after ESG investors realizing that this element has a low greenhouse gas footprint. Moreover, the ETF investors will be utilizing the North Shore Global Uranium Mining ETF (NYSE: URNM) and Global X Uranium ETF (URA) to receive profits from this industry. These trends indicate the impact of electric vehicles in exploring these technologies.

This post was originally published on CTP NEWS
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