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Why the Next Decade Is Critical for the Recycling Industry

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The resource transition is here and it is having a major impact on a number of industries from metals, mining, and even agriculture.  Over the next decade, investors will hear more and more about green metals, natural resources, recycling, sustainability, and more.

Minerals and Metals

"So the key challenge remains on the supply side without a question," says Charl Malan, the Senior Analyst, focused on minerals and metals, VanEck.

Quote by Charl Malan, Senior Analyst, focused on minerals and metals, VanEck, on biggest challenges facing the metals & mining industry.

Quote by Charl Malan, Senior Analyst, focused on minerals and metals, VanEck, on biggest challenges facing the metals & mining industry.

Agriculture, Paper, and Forest

"Population increase translates to us having to increase our food production by around 70%," says Ammar James, Deputy Portfolio Manager, and Analyst focused on agriculture, paper, and forest, VanEck.

Quote by Ammar James, Deputy Portfolio Manager, and Analyst focused on agriculture, paper, and forest, VanEck, on biggest challenges facing the agriculture industry.

Quote by Ammar James, Deputy Portfolio Manager, and Analyst focused on agriculture, paper, and forest, VanEck, on biggest challenges facing the agriculture industry.

What impact will these challenges have for investors in the resource transition? That was one of the many topics discussed during TheStreet's Investor Playbook: The Resource Transition, hosted by Susan McGinnis, which includes an all-star team of portfolio managers and analysts.

  • Shawn Reynolds, Portfolio Manager for VanEck’s Global Resource Fund GHAAX and Environmental Sustainability Fund ENVAX, VanEck
  • Ammar James, Deputy Portfolio Manager, and Analyst focused on agriculture, paper, and forest, VanEck
  • Veronica Zhang, Deputy Portfolio Manager, and Analyst focused on renewable energy, VanEck
  • Charl Malan, the Senior Analyst, focused on minerals and metals, VanEck

WATCH: Investor Playbook: How to Play the Resource Transition - FREE Webinar

Editor’s note. The webinar was recorded on December 22, 2021.

Video Transcript Below

Charl Malan: The OEMs are demanding that the extraction industry, as well as the processing industry, are a lot more responsible relative to what they've historically been. They clearly are looking much further into the extraction and processing business than they've ever done before, and it's a very interesting development that's taking place. They want to make sure whatever they are getting from the metals and mining industry is responsibly sourced because that's clearly a risk they want to mitigate. 

The other aspect to this, with responsible sourcing, will have a marked impact. And I think this is the most exciting place again going forward is just on the recycling side, what happens. Theoretically, it is the most responsible way of recycling. And if you take the analogy into the U.S. steel industry. The U.S. Steel industry, two of the biggest players here are effectively producing steel from recycled steel. So it's an industry that we see what the frame looks like. 

We need to duplicate that within the, let's call the green metals, the critical metals space. We have a good idea of what it's going to look like. It's just something we've never done before or haven't done in large volume. And the reason why we haven't done it before is that the application of these green metals, strategic metals, has just never really been there. And it typically takes the industry from the beginning of recycling to being up and running full scale, efficient, productive, a good decade. So I would say the next decade is going to be critical for the recycling industry being able for them to source the different commodities from spent batteries or other places they get their recycled material through.

Ammar JamesWe already have a problem between the food that we grow for food and the food that we grow for fuel. So just to put this into context, if you look at, for example, just corn, although the same thing applies for soybeans and some of the other crops as well. 45% of the corn that we grow in the U.S. goes to ethanol, something that you see perhaps when you fill up your tank at a gas station, you can see that percentage of the gasoline that's been blended with ethanol. That comes from corn. And another 45% of that goes to just feed animals, cows and pigs and chickens, and only really about 10% goes towards actual human food consumption. And so you've got this really big food versus fuel problem going on, and it's just going to get exacerbated as the population grows and as consumer preferences shift towards more environmentally sustainable foods.

We already have a problem between the food that we grow for food and the food that we grow for fuel. So just to put this into context, if you look at, for example, just corn, although the same thing applies for soybeans and some of the other crops as well. 45% of the corn that we grow in the U.S. goes to ethanol, something that you see perhaps when you fill up your tank at a gas station, you can see that percentage of the gasoline that's been blended with ethanol. That comes from corn. And another 45% of that goes to just feed animals, cows and pigs and chickens, and only really about 10% goes towards actual human food consumption. And so you've got this really big food versus fuel problem going on, and it's just going to get exacerbated as the population grows and as consumer preferences shift towards more environmentally sustainable foods.

Video Highlights | Investor Playbook: The Resource Transition

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