Interactive Investor

Why mining and oil are not dirty words for this young investor 

11th November 2021 10:00

Dinah Wolf from interactive investor

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Our Gen Z investor explains why she’d rather work with the resource sector, not against it, as we race against the clock to tackle climate change. 

We’re running out of time

COP26. Our last chance. One final attempt to try and piece it all back together (if that’s even possible) and figure out a way of halting (if not reversing) all the damage we’ve done. 

Leaders across the globe have an enormous task on their hands. There is mounting pressure to come up with solutions, and fast. Sure, there has been progress, but the clock is ticking and key players are nowhere to be seen. 

For starters, the agreement to slash coal use seemed to bode well, with more than 40 countries already signed up, but the bad news is that it failed to attract the US, China and India aka all the heavy users of coal who were a no-show. Then came the deal to (try) end car emissions by 2040. It’s all great on the surface but car giants like Volkswagen (XETRA:VOW) and BMW (XETRA:BMW) have all refused to sign up. 

From where I’m sitting, none of this real change can happen unless we all join in, from the Little Lads to the Big Boys. It has got to be a group effort. You lot know, there’s no use having a game of footie unless you have all your players on the pitch, from a safe pair of hands in goal to your star striker. We’re racing against time here so we’re gonna need all the help we can get. 

Speaking of which, governments of developed economies must work with those of developing ones to aid their transition. Think of the Middle East (along with Brazil and Russia) whose economical ecosystem pretty much relies on oil. Take that away too fast and subsequent unrest will be an understatement. 

Governments also need to set timelines for this energy transition. Failing to do so would lead to nasty supply snags (like we’re experiencing now) which, as we know too well, inflates prices. And this will keep going like a hamster in a wheel. Rising demand (from copper to gas) will keep prices high for a lot longer than we might wish for. So, be prepared for energy to keep on getting more expensive before it gets cheaper – and cleaner. There is no way out. 

All I can say is boy am I glad that I’m no government official or world leader. Hitting these carbon targets is far from a piece of cake and the solution will likely be convoluted and frankly messy. The road will be met with winners and sadly, many losers. But the journey has to begin.  

Take responsibility

While we can’t control government actions (much as we’d like), we can certainly control ours. As investors we have an opportunity, a responsibility, to put our money where our mouth is and to fight for real change. We have the chance to invest in companies, sectors and regions that are all doing their bit to pick up the pieces one by one to restore our beautiful planet. 

It’s always baffled me how net zero and Big Oil don’t seem to go hand-in-hand. But I think they’re the yin to the yang. Who (or what) will power our green future if not our black assets? How will all these wind turbines get built without our mining companies? Oh, and without copper you can kiss goodbye to electric vehicles (EVs) since they guzzle almost four times more copper than your non-EV car. 

The thing is, it’s become unfashionable to invest in ‘dirty’ companies (you know, all that oil and mining gunk) but I don’t shy away from, nor am I embarrassed to say that I am a shareholder in Mining Monsters and Old Oil. See, if investors start selling their shares in these kinds of companies, they could be sold to investors who, to put it bluntly, couldn’t give a toss. 

By investing in these black companies, it means that shareholders who actually care can work with them, not against them, to help them position for the greener days that (hopefully) lie ahead, to ensure that there’s a future for them, too. 

It's pure fantasy to think that changing the colour of our economy from black to green will simply happen overnight with little to no dark paint being smeared all over this soon-to-be perfectly green canvas. 

So, let’s stop shifting responsibility and take a stance. 

Here’s thing is, we only get one planet. This is it. There’s no Planet B. 

I’ll leave you with this poignant quote from Sir David Attenborough: “The question is, are we happy to suppose that our grandchildren may never be able to see an elephant except in a picture book?”

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