Sovereign Wealth Funds Demand Sustainability in Metals Mining

(MENAFN– Perceptiona) Sovereign wealth funds are increasingly turning their attention to physical gold and nickel investments and firms mining these metals. However, a new study* conducted by Tresor Gold, a junior mining company focused on exploration and development projects in West Africa, highlights that these institutional investors now demand a bigger focus on sustainability and Environmental, Social, and Governance (ESG) factors before committing their capital.

Growing Interest in Physical Gold and Nickel:
The research conducted by Tresor Gold reveals that 90% of sovereign wealth funds interviewed intend to increase their allocations to physical gold over the next 18 months, while 85% plan to expand their exposure to physical nickel within the same time period. These decisions come as the sector’s strong long-term prospects, driven by the rising demand for nickel for electric vehicle (EV) batteries, continue to entice investors.

ESG Focus on Responsible Mining:
While sovereign wealth investors are bullish on the investment potential of metals, they are equally committed to promoting sustainable and responsible mining practices. All the surveyed sovereign wealth fund professionals express their belief that the focus on responsible and sustainable mining will intensify over the next two years, with 10% anticipating a significant surge. Moreover, 95% of respondents emphasize the importance of ESG considerations when evaluating investments in gold or nickel mining companies, with 60% categorizing it as “very important.”

Motivated by Concerns and Bullish on Gold:
Around 85% of sovereign wealth fund professionals cite concerns about the stability of the banking sector as the primary reason for the increasing exposure to gold. Additionally, 60% point to the belief that the US Federal Reserve has paused rate hikes, further bolstering their conviction in gold’s appeal. Nearly all respondents (95%) share the view that global inflation will exceed government predictions over the next two years, with 25% predicting a substantial surge.

The sovereign wealth professionals remain bullish on the price of gold, with all respondents believing it will rise in comparison with 2022. 70% anticipate an appreciation of at least 5%, while almost a third (30%) predict a gain of 10% or more. Furthermore, nearly two-thirds (65%) believe gold and gold mining stocks should comprise 6% or more of core holdings for investors.

Emphasizing Sustainability and Responsible Mining:
“As sovereign wealth funds increasingly demonstrate support for physical gold, nickel, and mining firms, it becomes imperative for the mining industry to heed the call and embrace sustainable development principles,” emphasized Tony Lawson, Chief Executive Officer at Tresor Gold. “Addressing ESG concerns and implementing responsible mining practices are paramount in meeting the rising demand from investors.”

Tresor Gold’s Commitment to Sustainability:
Tresor Gold, a company focused on commercial grade gold and critical metal projects in West Africa, takes a proactive approach to ensure positive sustainable impact and stewardship. Embracing the Responsible Mining Principles outlined by the World Gold Council and the Sustainable Development Goals set by the UN, Tresor Gold sets a strong example for responsible mining practices in the industry.

The surging interest of sovereign wealth funds in physical gold and nickel investments marks a pivotal moment for the metals mining industry. Their heightened demand for sustainability and ESG considerations reshapes the sector’s outlook. As these institutional investors increasingly seek responsible mining practices, the industry must respond by adopting a steadfast commitment to sustainable development. By aligning with these principles, mining companies can chart a course towards a more prosperous and environmentally conscious future.

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