Investing in picks and shovels

by Angel Sanz

Investing in picks and shovels

The 1848-1855 California Gold Rush attracted thousands of fortune seekers. While some found a few nuggets, many went away empty-handed, having lost a lot of money. However, pickaxe and shovel sellers did pretty well out of those caught up in the gold fever. Although this was a less enticing prospect than discovering a vein of gold, these traders made big profits.

Merchants do better than prospectors

Today we are in the midst of a 30-year transition towards decarbonising our economy, which makes “transition metals” look like a particularly attractive investment opportunity – as the sellers of picks and shovels of yesteryear did. Indeed, current investors are on the hunt for gold. i.e. the future market leaders in electric vehicles, battery manufacturing, wind energy, public electricity utilities or solar panels. But what all these sectors have in common is a huge need for transition metals, which could provide the real big wins of the move to decarbonisation.

Metals vital to the transition

One such essential metal is lithium, which is used in laptop batteries, smartphones and electric vehicles, as well as energy storage. Lithium is found in mines and in brine deposits and lithium-rich salts. Rare earth elements, such as neodymium, dysprosium and praseodymium, are used to make the permanent magnets needed for EVs and wind turbines. They can be found in small amounts all over the world, but China is the country that is most active in mining and refining them. Several companies based in North America and Australia are also major suppliers. Uranium, meanwhile, is increasingly being used as a replacement fuel for coal, fuel oil and natural gas in nuclear power plants. A number of the biggest uranium suppliers are in Canada. Copper will directly benefit from the increasing electrification, as it is needed for enhancing the electricity grid, wiring EVs and connecting wind turbines to the grid.

China plays an important role in refining and supplying these transition metals, but bedfore rushing in, investors must take into account the risks attached to investing in a country without fully reliable legal and economic structures. Countries with less government intervention and a more stable legal system are likely to be a better bet.

The recently passed US Inflation Reduction Act, which supports clean energy financing, as well as forthcoming EU regulations promoting the adoption of cleaner energy technologies, will increase demand for transition metals. As a result, investing in the ‘picks and shovels’ of the energy transition – which should continue over the next 30 years – may be the way to go.


Article published in Le Temps, 6 February, 2023

Investir dans les pelles et le pioches


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Antonio Mira

Antonio Mira joined NS Partners in 2006 as Group Chief Financial Officer. He heads the corporate functions and is involved in coordinating and implementing the decisions of the Executive Committee.
An experienced bank auditor, Antonio started his career in 1995 with Arthur Andersen, where he worked for some 7 years before joining Ernst & Young in 2002 as a Senior Manager.
Antonio is a Swiss chartered accountant and a Business graduate of Lausanne University (HEC).

Sébastien Poiret

Sébastien Poiret joined NS Partners in 2008 and manages funds of hedge funds and private client mandates. He also oversees the development of the Group’s offices in Mauritius.

Prior to joining NS Partners, he served as a Trader, Head of Manager research and Portfolio Manager in the USA and Switzerland for a single hedge fund (1998-2004) and for Optimal (2004-2008), Grupo Santander’s fund-of-hedge funds operations.

Sébastien holds a Bachelor’s degree in Corporate Finance from the ESPEME Business School (EDHEC Group) and an MBA in Finance and Economics from the Institute of Business Administration, both in Nice.

Abir Oreibi

Abir Oreibi joined the Board of the NS Partners Group in 2018, where she brings her truly international perspective and rich experience.
Among many other ventures, Abir set up’s first European office. After living and working in Shanghai, Hong Kong, Bangkok and London, she now lives in Geneva, where she is CEO of Lift Events, an organization that identifies technology trends, their business and social impact through the organization of events and open innovation programs. Issues related to the challenges and opportunities created by new technologies as well as the strategic responses from organizations are at the heart of Lift’s activities.
Abir holds a BA in Political Sciences from the University of Geneva. She is an investor, and member of advisory and innovation boards.

Romain Pidoux, CAIA

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Romain Pidoux joined NS Partners in 2011 and heads the Group’s Risk Management.
He started his financial career in 2005 as Head of Quantitative Analysis for a Swiss Family Office, selecting funds and managing portfolio allocation. In 2008, he switched to the alternative world and joined Peak Partners as hedge funds analyst.
He is a Chartered Alternative Investment Analyst (CAIA) and holds a Master’s degree in international relations from the Graduate Institute of International Studies at Geneva University.

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