As the global energy transition accelerates, the mining sector is increasingly navigating a complex landscape of shifting demand, volatile prices and growing sustainability priorities.
During an S&P Global webinar on the state of the mining industry in Q1, analysts highlighted renewable power development and mine-site electrification as key sustainability drivers shaping the future of resource extraction.
Copper, a key component of the energy shift, remains a focal point, with average prices holding at US$9,412 per metric ton in the first quarter, though forecasts suggest a slight decline to US$9,317 by year end.
Meanwhile, the battery metals space continues to feel the squeeze.
Lithium prices slumped to US$9,000 per metric ton, leaving an estimated 27 percent of producers operating at a loss, according to S&P. Cobalt held above US$14 per pound, bolstered by the Democratic Republic of Congo’s export ban.
Nickel, driven by surging Indonesian output, is forecast to fall to US$15,730 per metric ton.
The webinar also touched on broader sector dynamics, including ongoing trade tensions, subdued financing activity and an uptick in M&A as companies reposition for long-term growth amid tightening supply and geopolitical uncertainty.
Copper supply disrupted, green demand bolstered
As mentioned, copper prices are expected to dip slightly to US$9,317 by year end.
While positive drivers like a weaker US dollar and resilient Chinese demand are offering some support, refined production cuts, bad weather in Chile and smelter challenges have added pressure to the global supply chain.
Notably, production disruptions in Chile — including a national blackout and Glencore’s (LSE:GLEN,OTC Pink:GLCNF) partial suspension at Altonorte — along with declining US consumer confidence, have led S&P to revise its US refined copper demand growth forecast down to just 1.5 percent for the year. Meanwhile, tightness in the concentrate market has sent spot treatment charges to record lows, amplifying strain on smelter margins.
“(A) developing demand driver for copper is the increasing demand from the green energy transition,’ said Naditha Manubag, associate research analyst, metals and mining research, at S&P Global Commodity Insights.
‘Despite the intensifying US-China trade disputes, copper demand in China has shown resilience, with copper concentrate imports growing by 10 percent in Q1 and cathode imports increasing month-over-month.’
Lithium, cobalt and graphite markets under pressure
In contrast, the battery metals space continues to reel from oversupply and weak pricing. Lithium carbonate CIF Asia dropped to just US$9,000, the lowest level seen since 2021.
“Overcapacity will continue to limit lithium prices until the next decade,” said Manubag. “With this, we have lowered the lithium carbonate CIF Asia price in 2025 to US$9,031. And using this price assumption, 27 percent of lithium operations will be loss-making on a total cash operating margin basis.”
Prices are expected to dip further to US$8,600 in Q3 before a modest recovery in 2027.
The cobalt market, while supported by the Democratic Republic of Congo’s export ban, is forecast to remain in surplus through 2025, though prices are likely to hold above US$14.
“The Democratic Republic of Congo accounts for over 70 percent of global cobalt mine output, yet its ongoing export ban is unlikely to trigger significant production cuts,” the analyst said, adding that the stockpiled supply is expected to re-enter the market once the ban lifts — supporting a sustained price recovery.
Cobalt hydroxide prices have surged the most since the ban began due to tightening supply, and cobalt prices are expected to remain above US$14 through 2025. However, elevated prices may accelerate the trend toward substituting cobalt in battery chemistries as the lithium market braces for further cuts.
Meanwhile, graphite prices are under pressure despite tightening Chinese export controls.
China’s December export ban on key critical minerals, including gallium and germanium, has prompted tighter scrutiny on graphite exports to the US. With China supplying roughly half of America’s antimony and natural graphite imports, pressure on prices has mounted as Tanzanian supply grows, but export options narrow.
Despite current oversupply, a structural deficit is forecast in the medium to long term.
“Spot prices for natural graphite have come under further pressure,” Manubag said. “(US President Donald) Trump’s Section 232 probes import dependence on processed graphite, supporting US anode projects.”
As such, S&P sees US capacity growing to 236,000 metric tons in 2028.
“We maintain our view that continued high feedstock cost on the synthetic anode supply chain could support fine flake and spherical graphite prices,’ the expert added.
Gold leads Q1 mining M&A
M&A in the mining sector slowed sharply in Q1, with both the number and value of deals declining.
Although gold transactions accounted for 86 percent of total M&A value, overall gold deal value dropped 62 percent quarter-over-quarter to US$4.02 billion. In the lead for the period was Equinox Gold’s (TSX:EQX,NYSEAMERICAN:EQX) planned US$1.87 billion takeover of Calibre Mining (TSX:CXB,OTCQX:CXBMF).
Nickel followed, with MMG’s (OTC Pink:MMLTF,HKEX:1208) US$500 million acquisition of Anglo American’s (LSE:AAL,OTCQX:AAUKF) nickel business, including producing assets like Barro Alto and Codemin.
In copper, the top transaction was Hudbay Minerals’ (TSX:HBM,NYSE:HBM) purchase of Mitsubishi Materials’ (OTC Pink:MIMTF,TSE:5711) remaining stake in the Copper Mountain mine for US$44.3 million.
“Gold deals are expected to continue leading M&A activity as the metal maintains its safe-haven appeal amid global trade uncertainty,” Gian Seblos, associate research analyst, metals and mining research, at S&P Global Commodity Insights, said during this week’s webinar. He added, “Meanwhile, cash-rich producers may drive consolidation in base metals, either to secure future output or diversify amid shifting trade dynamics.”
Capital raised by mining companies surged to US$11.92 billion — doubling from the previous quarter and marking the second consecutive quarter of growth following the US Federal Reserve’s December rate cut. Debt financing jumped to 65 percent of total capital raised, up from 35 percent previously, fueled by a surge in senior debt offerings.
Major mining companies led the charge, raising US$7.57 billion — nearly six times more than Q4 2024.
Juniors saw a 25 percent increase, raising US$3.48 billion. Gold companies captured half of the funding, followed by those focused on base metals (33 percent) and specialty commodities (17 percent).
Regionally, Asia and the Middle East posted a 331 percent gain to US$1.58 billion, primarily driven by Saudi Arabia’s Ma’aden through two non-convertible bond offerings worth US$1.25 billion.
Africa and Europe also saw strong growth, while Australia, Canada and the US experienced declines.
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.