The mining and metals sector is navigating a rapidly evolving global landscape in 2025, as geopolitical tensions, trade wars, and shifting economic policies redefine industry strategies.
The past year saw elections across developed and emerging markets (EMs) disrupt the status quo, with inflation and social unrest leading to significant political changes. Now, companies are adapting to a more fragmented global market, where regulatory scrutiny, foreign direct investment (FDI) barriers, and supply chain disruptions are shaping decision-making.
While the International Monetary Fund (IMF) projects 3.2% global GDP growth in 2025, key markets—including China, the U.S., and Europe—are facing synchronized slowdowns. A stronger U.S. dollar, delayed interest rate cuts, and potential yuan devaluation are adding pressure on metals prices and asset values. Nearly half of industry experts now see geopolitical fragmentation as the primary driver of mining and metals activity this year.
Critical Minerals and M&A Trends
Diversification into critical minerals is emerging as a dominant force in mergers and acquisitions (M&A), with 37% of industry respondents citing it as a key driver. Copper remains a hot commodity, with interest in major acquisitions, such as Anglo American, continuing. However, high capital costs, increased regulatory scrutiny, and government intervention in emerging markets pose challenges to large-scale deals. Despite improving financial conditions, M&A activity remained at historic lows in 2024, reflecting cautious investor sentiment.
Market Uncertainty and the Supply-Demand Equation
The mining industry is dealing with a two-speed market. While Chinese firms continue to invest heavily in supply-side projects—including mining, smelting, and refining—Western competitors face difficulties securing funding without government-backed trade protections. An oversupply of nickel from Indonesia has prompted discussions of a dual-pricing system using green premiums. Meanwhile, lithium producers in China have scaled back output in response to market gluts, and even copper, a traditionally strong-performing metal, has seen price fluctuations driven more by market dynamics than supply deficits.
Gold has remained a bright spot in the sector, benefiting from increased investor risk sentiment. Additionally, silver demand is on the rise, driven by its essential role in solar photovoltaic (PV) technology, following years of supply underinvestment.
Shifting Demand Growth and Policy Uncertainty
The geographic distribution of demand growth is evolving. While electric vehicle (EV) demand has slowed in Europe and the U.S., China continues to dominate, with more than 50% of new vehicles qualifying as hybrid or fully electric. Between 2020 and 2024, China accounted for over 75% of global copper demand growth, but 2025 is expected to see a shift toward increased demand from OECD economies, driven by renewable energy investments, data center construction, and electrification initiatives.
The industry’s ability to attract institutional capital is being challenged by declining prices and growing political intervention. With diverging economic policies in the U.S., Europe, and Japan, companies must carefully navigate changing regulations and investment climates. The potential return of sweeping U.S. trade tariffs, including proposed universal tariffs on strategic goods, may force mining firms to reconsider how and where they allocate capital.
