‘A perfect storm’ is driving commodities supercycle, says ERG chief at Davos

A supercycle in the global commodities space is well underway and will carry on for the next 30 years, according to Eurasian Resources Group (ERG) chief executive Benedikt Sobotka.

Speaking at the 2022 World Economic Forum in Davos, Sobotka pointed to years of underinvestment in the mining sector, supply shocks and high energy prices as key drivers of higher long-term commodity prices.

COVID-related logistical issues and demand for transparency on sustainability have further added to ‘the ingredients for a perfect storm in commodity markets’, he told the Reuters Global Markets Forum at the annual event in Switzerland.

Luxembourg-based, privately-held ERG is a global supplier of copper and cobalt – two key materials for the global energy transition. It also supplies alumina and iron ore and is the only producer of high-grade aluminium in Kazakhstan.

Sobokta suggested that a recent resurgence in fossil fuels is only temporary, and the transition to a lower carbon economy ‘cannot be stopped’, which will require a projected US$50 trillion in the next three decades.

“Anything between $200-$300 billion in investment per year will be required for the mining industry to satisfy demand for the energy transition,” he said, with much of this invested into the mining of copper, nickel, cobalt and other metals.