Industry Overview

The mining industry is undergoing historically one of the most dramatic transformations.  In our view, this transformation is driven primarily by an unprecedented increase in demand from emerging markets, particularly China, which recently offset some of the demand weakness in the western world and the slow supply response from producers due to a long period of under-investment in the sector, aging mines, and a more challenging environment for the development of new mining projects.

We believe that the mining industry is in the midst of a cyclical recovery after having undergone a demand shock from the worst global recession since the Great Depression.  There remains uncertainty about the sustainability of the recovery, and its magnitude especially in Europe and the United States which warrants caution and makes us very selective on the exposure we have in different companies and particular metals.