{"id":111080,"date":"2021-11-12T10:15:00","date_gmt":"2021-11-12T15:15:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=111080"},"modified":"2022-11-21T09:49:16","modified_gmt":"2022-11-21T14:49:16","slug":"1-2-trillion-infrastructure-bill-means-more-metals-and-mining-will-be-needed","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/commodities\/1-2-trillion-infrastructure-bill-means-more-metals-and-mining-will-be-needed\/","title":{"rendered":"$1.2 Trillion Infrastructure Bill Means More Metals And Mining Will Be Needed"},"content":{"rendered":"\n<p>After much anticipation, the U.S. House approved a bipartisan $1.2 trillion infrastructure spending package last week, sending it to President Joe Biden\u2019s desk to sign. Although no single lawmaker got everything they wanted, I believe this bill is generally constructive news for the metals and mining industry, which will be tasked with supplying the critical minerals necessary to build and improve the nation\u2019s roads, bridges, ports, power grid and so much more.<\/p>\n\n\n\n<p>First let\u2019s look at what\u2019s in the bill. Some $517 billion will be deployed over 10 years, with roads, bridges and highways receiving the largest portion at $110 billion. According to the White House, the $40 billion set aside for bridges is the single largest bridge investment in the U.S. since the Eisenhower Administration. Passenger and freight rail projects come next at $66 billion, followed by power infrastructure and broadband infrastructure at $65 billion each. Water projects, public transit, airports and ports and waterways will also receive new funding, as will new electric vehicle (EV) charging infrastructure.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"900\" height=\"659\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_1.png\" alt=\"infrastructure investment and jobs act byt he numbers\" class=\"wp-image-111081 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_1.png 900w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_1-700x513.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_1-300x220.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_1-768x562.png 768w\" data-sizes=\"(max-width: 900px) 100vw, 900px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 900px; aspect-ratio: 900\/659;\" \/><\/figure>\n\n\n\n<p>Applications for funding may not be approved for several more months, but already the spending package is being compared to past major infrastructure programs such as the transcontinental railroad and Interstate Highway System.<\/p>\n\n\n\n<p>That said, I believe this could be a catalyst for significantly higher prices for metals and other raw materials, meaning now may be the time to get exposure to the mining industry as well as refiners and manufacturers.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-more-mining-needed-to-meet-decarbonization-goals\"><strong>More Mining Needed to Meet Decarbonization Goals<\/strong><\/h2>\n\n\n\n<p>In a recent note to clients, Morgan Stanley analysts said the biggest recipient materials of a core infrastructure package would be cement, aggregates (sand and gravel) and finished steel products such as rebar. According to the bank\u2019s estimates, a $1.5 trillion infrastructure plan would translate to incremental steel demand of 75 metric tons over 10 years.<\/p>\n\n\n\n<p>That could be good news for iron producers like BHP and Anglo American. <\/p>\n\n\n\n<p>Although the infrastructure bill seeks to put the U.S. on track for net-zero carbon emissions by 2050, there\u2019s really no substitute at the moment for cement and steel, the production of which emits great amounts of carbon into the atmosphere.<\/p>\n\n\n\n<p>In fact, a move to decarbonize inevitably means, paradoxically, that more metals must be produced through scaled-up mining. As I\u2019ve shared with you before, EVs require six times the amount of minerals on average, such as nickel, copper, cobalt and lithium, as traditional internal combustion engine (ICE) vehicles.<\/p>\n\n\n\n<p>Take a look at the chart below. An offshore wind farm uses nine times as many resources as a natural gas plant, according to the International Energy Agency (IEA), with some 8,000 kilograms of copper needed to produce just one megawatt of power.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"900\" height=\"450\" data-src=\"\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_2.png\" alt=\"minerals used in construction of clean energy technologies compared with other power generation sources\" class=\"wp-image-111082 lazyload\" data-srcset=\"https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_2.png 900w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_2-700x350.png 700w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_2-300x150.png 300w, https:\/\/ibkrcampus.com\/campus\/wp-content\/uploads\/sites\/2\/2021\/11\/usg_11-12-21_2-768x384.png 768w\" data-sizes=\"(max-width: 900px) 100vw, 900px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 900px; aspect-ratio: 900\/450;\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Well-Positioned for a Potential Commodities Boom<\/strong><\/h2>\n\n\n\n<p>We seek to select companies that produce the minerals that we believe will benefit the most from higher construction spending.<\/p>\n\n\n\n<p>That includes copper producers such as Ivanhoe Mines, the number one holding in PSPFX as of September 30. We also like CopperBank Resources as a more speculative play. To get access to renewable energy and battery metals such as cobalt and lithium, we prefer names like First Cobalt, Standard Lithium and Piedmont Lithium.<\/p>\n\n\n\n<p>And then there are the manufacturers of renewable energy generators themselves. Canadian Solar is one of the fund\u2019s top holdings, and we also like Spain-based Siemens Gamesa Renewable.<\/p>\n\n\n\n<p><strong>We invite you to learn more about the Global Resources Fund (PSPFX) by&nbsp;<\/strong><a href=\"https:\/\/www.usfunds.com\/fund\/global-resources-fund\/\"><strong>clicking here!<\/strong><\/a><\/p>\n\n\n\n<p><em>Please click&nbsp;<\/em><a href=\"https:\/\/www.gofilepoint.com\/assets\/documents\/USGI-investor-grf_Summary_Prospectus.pdf\"><em>here<\/em><\/a><em>&nbsp;to see the PSPFX prospectus.<\/em><\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted on November 11, 2021 &#8211; <a href=\"https:\/\/www.usfunds.com\/resource\/1-2-trillion-infrastructure-bill-means-more-metals-and-mining-will-be-needed\/\">$1.2 Trillion Infrastructure Bill Means More Metals And Mining Will Be Needed<\/a><\/p>\n\n\n\n<p>Foreside Fund Services, LLC, Distributor. U.S. Global Investors is the investment adviser.<\/p>\n\n\n\n<p>Investing involves risk. Principal loss is possible. Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Because the Global Resources Fund concentrates its investments in specific industries, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.<\/p>\n\n\n\n<p>Fund portfolios are actively managed, and holdings may change daily. Holdings are not recommendations to buy or sell a security and are reported as of the most recent quarter-end. Holdings in the Global Resources Fund as a percentage of net assets as of 9\/30\/2021: Ivanhoe Mines Ltd. 4.92%, CopperBank Resources Corp. 1.97%, Canadian Solar Inc. 1.86%, Siemens Gamesa Renewable Energy SA 1.37%, Standard Lithium Ltd. 1.26%, First Cobalt Corp. 1.11%, Anglo American PLC 1.08%, BHP Group Ltd. 0.41%.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In fact, a move to decarbonize inevitably means, paradoxically, that more metals must be produced through scaled-up mining. <\/p>\n","protected":false},"author":36,"featured_media":111082,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21,5924,6,8,9,26,3],"tags":[10631,6174,1220,8785,10633,10632],"contributors-categories":[13633],"class_list":{"0":"post-111080","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-commodities","8":"category-esg","9":"category-north-america","10":"category-region","11":"category-securities","12":"category-text-articles","13":"category-traders-insight","14":"tag-chromium","15":"tag-clean-energy","16":"tag-copper","17":"tag-nickel","18":"tag-silicon","19":"tag-zinc","20":"contributors-categories-us-global-investors"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO 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