Big mining companies are giving priority to investor payouts instead of funding for new projects, threatening to slow down the transition away from fossil fuels WSJWhatsNow
That would put capital expenditures well below a 2012 peak close to $80 billion, the bank’s figures show.to give priority to dividends and share buybacks, rather than heavy spending. A recent push to limit the sector’s environmental damage also pinched spending.
The low expenditures set the stage for the recent rally in copper and iron ore, the main ingredient in steel. Both materials are up more than 40% in the past two years, for solar panels, wind turbines and batteries. The trend threatens to hamper the shift to renewables, which is driving rising demand for these metals.
Surging iron-ore prices are contributing to higher costs for solar panels, wind turbines and batteries.Producers have taken some steps to increase the supply of specialty materials such as lithium and cobalt that are crucial ingredients in batteries, but not enough to fill expected shortages. Despite seeing some of their highest profits in a decade, many mining executives are cautious because of rising costs for fuel and equipment, higher interest rates and challenges developing deposits in emerging markets that“Things are just piling up that are adding to the supply constraints,” Richard Adkerson, chief executive of copper miner
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