Investment Focus: How to Invest in Mining: Gold, Copper and AI Demand
By Boring Money
22 Dec, 2025
Artificial intelligence may be about to revolutionise the global economy, but one of the key risks to its dominance is the availability of mined materials. This ‘new world’ technology is remarkably dependent on ‘old world’ resources. This has created new interest in the mining sector, and in particular for ‘strategic’ commodities such as copper, lithium, or rare earths.
It has also been a strong year for precious metals. The gold price has soared in response to fears over geopolitical tensions, burgeoning US debt, a weaker Dollar, and central bank buying. Silver and other precious metals have benefited from a significant supply and demand imbalance. Mining companies in these areas have seen profitability strengthen on the back of stronger commodities prices, and many have seen double or triple-digit returns over 2025.
The mining sector is often plugged into global trends – responding to geopolitical events, technological shifts, and government policy. It means that the sector can be a source of differentiated returns and a useful hedge at points in the market cycle, and can be used to gain exposure to key macroeconomic themes in a portfolio.
AI's hidden reliance on mining resources
AI creates energy demand. The processing power required to harness and analyse the data needed for AI is held within vast data centres, which house servers, storage systems, and networking equipment. The International Energy Agency estimates that data centres accounted for around 1.5% of global electricity consumption in 2024, having grown at around 12% per year over the last five years.[1]
Global electricity consumption for data centres is projected to double to reach around 945 TWh by 2030 in the Base Case, representing just under 3% of total global electricity consumption in 2030. From 2024 to 2030, data centre electricity consumption grows by around 15% per year, more than four times faster than the growth of total electricity consumption from all other sectors.
It's not just energy. AI relies on a range of natural resources: Copper is necessary for the circuitry within data centres. Cobalt and silicon are necessary for semiconductors, lithium for batteries, and rare earth elements for LEDs, lasers, and circuit memories. At some point, all these materials need to be extracted from the ground and put to work.[2]
The energy transition needs metals
Mining companies are front and centre of other major trends in the global economy. The energy transition, for example, is dependent on a range of natural resources. Battery electric vehicles use around 183lbs of copper, for example, compared to just 48lbs for a combustion engine car. Copper is one of the most conductive materials and vital for the efficient transmission of electricity.
Without raw materials, such as copper, nickel, cobalt, and lithium, the transition to a low-carbon economy could become practically impossible. The demand for transition commodities has increased sharply in recent years. And there is a good chance that this will continue going forward. According to the International Energy Agency (IEA), global growth in demand for these commodities will remain high until 2030.
Gold and silver: the precious metals boom
Precious metals have been a significant area of growth in 2025, with the price of gold up 62%[3] and the price of silver up 104%[4]. There are many factors at work in the strength of this part of the market. Gold has benefited from the weakness of the Dollar, worries over the US fiscal position, and falling real interest rates (i.e. interest rates after inflation), while silver and platinum have benefited from industrial demand and weak supply.
Across all these areas, the companies that provide these commodities (take them out of the ground and distribute them around the world) are in a powerful position. The mining sector has moved from being considered a relic by many investors to a key enabler for many of the world’s most important activities.
How mining fits in your portfolio
The mining sector is a relatively small part of global indices. It is only around 3% of the MSCI World Index[5], though it is a far bigger weight in certain country indices. Basic resources and energy form around 5.6% and 8.9% respectively of the FTSE 100.[6] It is around 20% of the MSCI Australia index[7] and 15% of the MSCI Canada index[8]. It is also an important share of the stock markets in Latin America through mining giants such as Vale, Petrobras and Grupo Mexico.[9]
Index | Mining/Resources Weight | Notes |
MSCI World Index | ~3% | Mining sector only |
FTSE 100 | 5.6% (Basic resources) | Combined: 14.5% |
MSCI Australia | ~20% | Significant concentration |
MSCI Canada | ~15% | Significant concentration |
Latin American markets | Material weight | Key companies: Vale, Petrobras, Grupo Mexico |
Mining companies are often cash generative, which gives them the scope to pay higher dividends to shareholders. The MSCI World Metals & Mining index has a dividend yield of over 2%[10], but many of the large mining companies have far higher dividends – BHP at 3.7%[11], Rio Tinto at 5.5%[12], for example. However, these dividends are often more variable than for other sectors. For example, the latest Computershare Dividend Monitor showed dividend payouts from mining companies fell £711m in the third quarter of 2025, following significant cuts from Rio Tinto, Glencore, and Anglo American.
Mining has been a cyclical sector in the past. During the 2000s, the industrialisation of China created enormous demand for commodities – the so-called ‘supercycle’. However, this tailed off from 2014. Companies that had significantly expanded supply, spending vast sums to bring new mines on stream, found that they had over-capacity. The next few years delivered dismal returns for investors.
This time round, mining companies appear to have learned their lesson, keeping supply tight.
Mining companies have focused on capital discipline in recent years, meaning they have opted to pay down debt, reduce costs and return capital to shareholders, rather than investing in production growth. This is limiting new supply coming in and supporting commodity prices and there is unlikely to be a quick fix, given the time lags involved in investing in new mining projects. The cost of new projects has also risen significantly and recent M&A activity in the sector suggests that, like us, strategic buyers see an opportunity in existing assets in the listed market, currently trading well below replacement costs.
This capital discipline has helped keep cyclicality at bay.
Mining sector performance in 2025
Mining is diverse, and the performance of individual mining companies can vary considerably depending on the performance of the underlying commodities. For example, this year, shares in gold miner Newmont Corporation have risen 156%[13], yet Rio Tinto has risen only 18% and Glencore just 6%. It has been a very strong year for mining companies involved in precious metals, and a tougher year for diversified mining companies. In aggregate, the MSCI World Metals and Mining index is up 52.4% for the year to date.
The share prices for mining companies will not track commodity prices directly, and there are other factors that play a role in share price performance. Operational costs are important – the cost of labour, for example, or machinery. The skill of the management team, capital spending programmes and other areas may also influence the share price.
Mining companies can be diversifying in a portfolio. The sector was one of the very few to deliver a positive return in 2022, when the majority of other asset classes slumped. The MSCI World Metals and Mining index rose 7.1% over the year. However, the opposite may also be true. In 2024, when stock markets were buoyant, the index fell 12.5%.
How to invest in mining stocks and funds
Mining Investment Options
Investment Type | Examples | Best For |
Commodity ETFs | iShares Physical Gold | Specific metal exposure |
Mining Company ETFs | VanEck S&P Global Mining | Broad sector access |
Individual Stocks | Rio Tinto, BHP | Direct company selection |
Active Funds | BlackRock World Mining | Professional management |
Investment Trusts | CQS Natural Resources | Potential discount opportunities |
Please note: The above are for illustration purposes only and should not be considered recommendations.
If investors want exposure to the mining sector, their first decision may be whether they want to invest in specific commodities, such as gold, nickel or copper, or to take a more generalist approach. If they want exposure to a specific area, there are commodity ETFs. These either provide exposure to the commodity itself or mining companies involved in the exploration of that commodity. This might be the iShares Physical Gold ETF versus the L&G Gold Mining ETF.
For more general exposure to the mining sector, investors might need to look at a broad spectrum mining company such as Rio Tinto, which mines across iron ore, aluminium, copper, precious metals and industrial minerals. There are also mining-focused ETFs, such as the VanEck S&P Global Mining ETF, which has exposure across gold, silver, copper, nickel, zinc, iron ore, and lithium.
There are also a range of active funds that operate in the sector. There are a number of gold and precious metals funds, including Jupiter Gold & Silver and Baker Steel Gold & Precious Metals. The Amati Strategic Metals fund invests across industrial and precious metals, "deemed to be of strategic importance to the global economy and numerous long-term structural growth themes. These include, but are not limited to gold, silver, copper, lithium, nickel, manganese, platinum group and rare earth metals.” BlackRock also has a strong natural resources franchise, with its Gold & General fund, plus two investment trusts – BlackRock World Mining and BlackRock Energy and Resources Income trust.
Other investment trusts include CQS Natural Resources Growth & Income and Baker Steel Resources Trust. These can trade at significant discounts to net asset value
and can be a way to pick up assets cheaply.The mining sector is an exciting place to invest and provides exposure to some major developments in the global economy, such as AI and the energy transition. It can also provide a valuable hedge in times of geopolitical tension. Nevertheless, it can also be volatile and unpredictable, so investors need to be wary.
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[1] iea
[2] betashares, April 2025
[3] goldprice, December 2025
[5] MSCI World Index
[6] FTSE Russell
[9] MSCI EM Latin America Index
[10] MSCI World Metals and Mining Index
[11] BHP Group Ltd
[12] Rio Tinto Plc
[13] Yahoo Finance
