Beyond the Commodity Cycle

Global resource companies could benefit for years from structurally constrained supply, concentrated resource chains, durable metals demand and renewed demand for hard assets rather than merely from a temporary commodity-price upswing.

• Nearly 90% of oil and gas upstream investment since 2019 has only offset production declines, while global oil output could fall by roughly 8% annually over the next decade without further investment; new conventional projects take almost 20 years from exploration licence to first production.
• Mining supply is equally slow to respond: the average lead time for gold, copper, nickel and lithium mines reaching production rose from 12.7 years in 2005–2009 to 17.9 years in 2020–2023, and new critical-mineral mines in the United States take an average of 29 years from discovery to production.
• Supply-chain concentration increases geopolitical risk: China holds roughly 70% of rare-earth reserves, Indonesia represented about 62% of mined nickel production in 2025 and could approach 70% in 2026, while the Democratic Republic of Congo has introduced cobalt export quotas and Russia remains important to uranium enrichment.
• Electrification and artificial-intelligence infrastructure could lift global copper demand from 27 million tonnes in 2025 to 42 million tonnes in 2040, with a potential 10-million-tonne supply shortfall absent substantial new mining investment.
• The US fiscal outlook supports demand for gold and other stores of value: public federal debt is projected to rise from 101% of GDP in 2026 to 120% in 2036, while gold reached 27% of global central-bank reserves at the end of 2025 versus 22% for US Treasuries.

Takeaway: Investors should focus on resource companies with high-quality existing assets, long reserve lives and disciplined capital allocation, because prices can rise faster than production and the sector offers exposure to several structural forces; however, outcomes remain dependent on project execution, permitting and geopolitical developments.