When did critical minerals stop being critical?

Critical minerals still matter. What has changed is investors’ appetite for owning the companies that produce them. We think that creates an opportunity in selected miners over the next 12–24 months.

Our first three names are Barrick (NYSE: B), Pan American Silver (NASDAQ: PAAS) and PLS Group (ASX: PLS). Gold and silver support the first two. Battery demand supports PLS. Each has existing production, and each needs to turn that advantage into cash for shareholders.

The attraction is the price. The five producers in our comparison trade at roughly eight to ten times forecast earnings. That deserves attention, even allowing for forecasts that may assume stronger commodity prices.

AI needs more electricity. Governments face pressure to keep household bills affordable. And high public debt strengthens our interest in precious metals. Those are different reasons to examine miners, rather than a reason to buy the entire sector.

Start with what you are paying

A useful business can still be a poor investment at the wrong price. SQM, Albemarle, PAAS, PLS and Barrick currently sit around 8–10 times analysts’ forecast annual earnings. 

Cheap on a forecast is not the same as cheap at today’s commodity price. An earnings estimate that needs a sharp lithium recovery deserves more scrutiny. Ask what profit and cash remain at current selling prices, then at lower prices. Forecast periods also differ across companies.

AI needs power and voters want affordable bills

The electricity bottleneck is already part of the investment case. The IEA’s 2025 base case projected global data-centre electricity use rising from 415 terawatt-hours in 2024 to about 945 in 2030. 

In a tight electricity market, a large new customer can put pressure on bills and network spending. Households have little incentive to fund someone else’s data centre. We expect developers to face growing pressure to contribute generation, storage and grid infrastructure.

Australia’s AEMC recommended that approach in August, including additional clean generation, access to firm capacity and flexible operation. These were recommendations to ministers, not universal rules. 

Power constraints can also slow the spending. The IEA estimated grid constraints could delay around one-fifth of planned data-centre capacity additions through 2030.

The solution will vary by location. Solar and batteries, nuclear and on-site gas all have roles.  Batteries still need charging; new reactors take years. A growing demand story does not guarantee a quick rise in mineral prices.

Governments cannot comfortably promote AI expansion while asking voters to absorb its electricity costs. We expect growing pressure on developers to fund additional generation, storage and grid infrastructure. 

Follow the spending to the materials

Lithium is used in vehicle batteries and stationary storage. The IEA’s 2025 outlook projected demand growing about fivefold by 2040 under stated policies. That is a long runway, but mines can still produce more than customers need over the next two years.

For rare earths, focus on profitable processing and sales of magnet materials such as neodymium and praseodymium. Lynas belongs on the research list. Strategic importance alone does not pay shareholders.

Uranium has a separate demand case. The World Nuclear Association’s reference scenario puts annual reactor requirements above 150,000 tonnes in 2040, versus about 68,920 tonnes in 2025. Cameco warrants research, with attention to valuation and the contracts that determine realised prices.

Copper is also needed for cables and grid expansion. We have not valued a copper producer here, but BHP Group (ASX: BHP) is still favoured.

What about the other unloved miners? (The precious metals kind)

Debt makes the gold argument different

Gold does not need an AI story. We expect governments to face pressure to tolerate inflation rather than make all the spending cuts and tax increases needed to repair public finances. That is our assessment of the incentives, not a certainty about policy.

The IMF’s April 2026 forecast put global public debt near 94% of economic output in 2025, reaching 100% by 2029. Higher inflation can erode debt’s real value, but it also raises refinancing costs. Central banks retain price-stability mandates.

Central-bank buying offers another source of gold demand: an estimated 863.3 tonnes in 2025, down from 1,092.4 tonnes in 2024. Silver adds industrial demand. Yet industrial use fell 3% in 2025, partly as solar manufacturers used less silver per product. The Silver Institute still forecast a 46.3 million ounce supply deficit in 2026.

What higher metal prices mean for miners

Higher selling prices can increase a miner’s surplus much faster than its revenue, provided costs and production hold up. The historical chart shows why the relationship deserves attention. Price less sustaining costs is not net profit.

Historical share prices versus price less sustaining costs. This supplied chart uses share returns from October 2024 to October 2026 alongside Q2 2024 versus Q2 2026 operating margins; its percentage changes are not the $5,000 gold and $80 silver scenarios discussed below.

Using the article’s rounded research assumptions of US$4,150 gold and US$57 silver, a move to US$5,000 and US$80 would lift price less sustaining costs by roughly 37% for Barrick and 59% for PAAS’s silver operations. The calculation holds reported June-quarter sustaining costs of US$1,866 and US$17.80 an ounce constant. 

Taxes, production volumes, royalties and spending still matter. PAAS also produces gold, and income from other metals affects its reported silver costs. Falling prices reverse the benefit.

Follow the cash. Barrick’s June-quarter attributable operating cash flow was US$1.12 billion, but cash after capital spending was US$141 million. The forecasts below show why operating strength and cash available to shareholders must be assessed separately.

Three miners where we would start

1. Barrick (NYSE: GOLD)

We favour Barrick for its exposure to gold and the gap between our assumed gold price and reported sustaining costs. The key question is how much reaches shareholders after capital spending. Strong mine earnings are not enough if expansion absorbs the cash.

2. Pan American Silver (NASDAQ: PAAS)

PAAS gives exposure to both silver and gold. Higher prices can materially improve the surplus at its mines, but this is not a pure silver investment. Watch gold-mine costs, the contribution from Juanicipio and whether operating improvements translate into free cash flow.

3. PLS Group (ASX: PLS)

PLS gives direct exposure to lithium through established concentrate production. We prefer examining an operating producer before a developer still seeking construction funding. Watch actual concentrate selling prices and expansion spending: a headline lithium-carbonate price is not the price PLS receives.

SQM and Albemarle are the alternatives to compare against PLS. SQM has the lowest forecast earnings multiple in this group; Chilean partnership terms matter to the shareholder return. For Albemarle, test whether realised prices and spending support forecast earnings. Use the same lithium-price assumptions when comparing all three.

Build positions in stages and size the combined exposure for another commodity downturn. Reconsider if debt funds recurring shortfalls, repeated share issues keep operations going, or promised production fails to arrive. Our preference is Barrick and PAAS first, then PLS against its lithium peers. Critical minerals remain critical. The investment still has to work at the price you pay.

If you don't have Global Share access, the 4 ASX listed ETFs that line up best are:

• Betashares Critical Minerals ETF (ASX: XMET) - Closest broad basket. Copper, lithium, rare earths and related producers. Fits the “still critical, but pick the producers” framing.
• Global X Battery Tech & Lithium ETF (ASX: ACDC) — Direct match for the PLS/lithium case via established producers and battery chain.
• VanEck Rare Earth and Strategic Metals ex China ETF (ASX: RESM) — Matches the rare-earths research call (Lynas-type exposure) and the “only if it generates cash” filter. Explicitly ex-China.
• Global X Copper Miners ETF (ASX: WIRE) — Pure copper-miner exposure for the AI/grid/power demand point. Large, liquid, established producers.