The global demand for critical minerals and metals is increasing significantly due to their use in a vast range of applications and clean energy transitions gathering pace. With sustained demand for minerals, supportive government initiatives and investments, and the adoption of digital technologies, the growth outlook for the mining industry seems bright.

Given the industry’s promising growth prospects, investors could consider buying fundamentally sound mining stocks Glencore plc (GLNCY – Get Rating) and Fortescue Metals Group Limited (FSUGY – Get Rating) for solid returns. On the other hand, it could be wise to hold South32 Limited (SOUHY – Get Rating) and wait for a better entry in this stock.

Despite lingering macroeconomic headwinds, the mining sector is well-placed to witness robust growth in the long run, driven by high demand for metals and minerals. End uses of minerals include transportation, fabricated metal products, household appliances, and industrial machinery. Moreover, the demand will likely grow sharply as the energy transition has picked up momentum.

Critical minerals, including copper, nickel, graphite, and cobalt, are essential components in today’s rapidly growing clean energy technologies, from wind turbines and electricity networks to electric vehicles (EVs). As per a report by the International Energy Agency (IEA), the demand for minerals will increase by nearly 500% by 2040 if the world is to meet net zero as a global goal.

In addition, favorable government policies and investments should boost the mining industry’s prospects. In April, Biden-Harris Administration announced an investment of $16 million to build America’s first-of-a-kind critical minerals production facility. The funding will support projects in West Virginia and North Dakota to strengthen domestic mineral supply chains.

According to a report by the Business Research Company, the global mining market is expected to reach $2.78 trillion in 2027, growing at a CAGR of 6.7%.

Rapid digital mine innovation is…

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