As electrification, digital infrastructure and defense reshape demand for metals, mining is taking on greater strategic importance. For Alessandro Valentino, Product Manager at VanEck, this shift brings renewed attention to a sector whose supply constraints extend far beyond extracting resources. From developing new mines to building refining capacity, the challenge is to meet evolving industrial needs while navigating geopolitical dependencies. For investors, understanding the differences between broad mining exposure and targeted strategic-metals strategies remains essential.
A Structural Shift Within a Cyclical Industry
Mining has traditionally been closely linked to the economic cycle, with commodity prices influencing companies’ revenues and investment decisions. That relationship remains, but Valentino sees a changing structural backdrop.
Metals are essential inputs for electric vehicles, electricity grids, data centers and defense technologies. These applications are reinforcing the sector’s strategic role, even as demand remains sensitive to policy choices, technological developments and economic conditions.
Supply, however, cannot respond immediately. According to the estimates cited by Valentino, the average time between discovering a mineral deposit and bringing it into production is almost 17 years. Investment decisions made today may therefore take well over a decade to translate into additional output.
Mining’s growing strategic importance does not remove its cyclicality: it adds longer-term industrial and security considerations to an already volatile market.
Supply Constraints Extend Beyond New Mines
Whether supply can keep pace with demand depends on the metal concerned and the assumptions underpinning future consumption.
Valentino distinguishes between scenarios based on policies already being implemented and those assuming governments deliver all their announced commitments. These scenarios describe different possible demand trajectories based on distinct policy assumptions; they are not forecasts.
Heavy rare earths and, over a longer horizon, copper stand out in his assessment as areas where supply could face particular pressure. Yet developing deposits is only part of the challenge. For rare earths in particular, separation, metallization and magnet manufacturing capacity must also be financed, permitted and built.
Recycling, substitution and improvements in production processes could ease some of these constraints. Slower adoption of electric vehicles or changes in public policy could also reduce projected demand.
The question is therefore not simply whether more minerals will be needed, but how quickly entire supply chains can adapt—and which companies will be able to translate that adjustment into sustainable earnings.
Diversification Requires More Than Extraction
China’s position in rare earths illustrates the importance of looking beyond mining alone.
According to the figures cited by Valentino, China accounted for 69% of rare earth mine production in 2025. He also puts its share of global refining capacity at 93%. This concentration leaves other economies dependent on processing infrastructure as well as access to raw materials.
For Europe, building a more resilient supply chain consequently requires investment across several stages: extraction, separation, refining, magnet production and recycling.
Valentino points to mechanisms such as long-term purchase agreements, strategic stockpiles and price-support arrangements as ways to support alternative capacity. Their purpose is to help projects develop in markets where pricing uncertainty and competition can complicate investment decisions.
Diversification nevertheless comes with trade-offs. New infrastructure takes time, and sourcing outside established supply chains may involve higher input costs. Greater resilience is therefore a gradual undertaking, with outcomes dependent on financing, execution and policy continuity.
Valuations Tell Different Stories Across the Sector
The investment case is not uniform across mining companies.
Valentino highlights differences between established diversified producers and smaller businesses focused on rare earths and strategic metals. The latter may offer exposure to emerging industrial needs, but often have more limited current earnings and higher valuations.
According to the data supplied by VanEck, its global mining ETF, GDIG, had a portfolio-level trailing price-to-earnings ratio of 15.5 as of 30 October 2026, compared with 24.7 for its rare earth and strategic metals ETF, REMX.
These figures illustrate different portfolio characteristics rather than establishing which strategy will deliver stronger returns. Higher valuations can leave companies more exposed if growth or profitability falls short of expectations.
Inflation adds another consideration. Valentino notes that resource equities have historically performed better relative to US bonds during periods of elevated inflation. However, inflation also increases miners’ operating and development costs, and historical relationships do not guarantee future performance.
Two Distinct Approaches to Metals Exposure
VanEck’s two strategies address different parts of this investment universe.
The VanEck S&P Global Mining UCITS ETF (GDIG) provides broad exposure to the global mining value chain. According to VanEck, the fund holds more than 180 companies and is weighted toward larger producers across areas including copper, gold, aluminum, steel and diversified metals.
The VanEck Rare Earth and Strategic Metals UCITS ETF (REMX) offers more concentrated exposure to companies involved in mining, refining or recycling strategic materials. Its universe extends beyond rare earths to metals such as lithium, cobalt and tungsten.
With 32 holdings and its ten largest positions representing 61.8% of the portfolio on 30 October 2026, REMX also carries greater concentration and more exposure to smaller companies. Some holdings are listed in China, meaning the strategy should not be viewed as removing China-related exposure.
The distinction is between broad participation in the mining cycle and a more targeted investment in strategic-metals supply chains.
Both remain exposed to commodity prices, equity markets, currency movements and political or regulatory developments. For Valentino, their potential role in a portfolio depends on investors’ objectives, risk tolerance and existing allocations, including overlaps with China and energy-transition investments.
Mining’s strategic relevance may be increasing, but investment outcomes will still depend on costs, project delivery, valuations and the ability of individual businesses to turn demand into profits.
