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Mining Sector Offers Attractive Investment Opportunity

  //stocks-investing.news-articles.net/content/202 .. or-offers-attractive-investment-opportunity.html
  Published in Stocks and Investing on Wednesday, January 28th 2026 at 15:02 GMT by The Globe and Mail
      Locales: CANADA, AUSTRALIA, CHILE

Toronto, Ontario - January 28th, 2026 - A confluence of escalating commodity prices, persistent geopolitical instability, and historically low valuations is creating a uniquely attractive investment opportunity in the mining sector, according to Stuart McMillan, Head of Equity Research at Canaccord Genuity. In a recent analysis, McMillan argues that the risk-reward profile for mining stocks is "extremely positive," offering investors a potential haven amidst broader market uncertainties.

The mining sector has experienced a challenging period over the past two years, hampered by macroeconomic headwinds and a lack of significant investment. This downturn, however, has created a situation where valuations are currently depressed, offering a potentially lucrative entry point for investors. McMillan believes this undervaluation is a temporary anomaly that will be corrected as fundamental market forces come into play.

Copper Leading the Charge

Driving this potential rebound is the increasing demand for critical metals, particularly copper. As the world transitions towards renewable energy sources and electric vehicles, the demand for copper - a vital component in these technologies - is projected to surge. Solar panel infrastructure, wind turbines, and electric vehicle batteries all rely heavily on copper, creating a long-term structural demand that surpasses current supply levels.

"It's a pretty straightforward equation," explains McMillan. "Demand for copper and other base metals is going to continue to rise, supply isn't going to keep pace, and that's going to support higher prices." This anticipated price increase isn't limited to copper; other base metals vital for green technologies and infrastructure development are also expected to benefit from this trend.

Geopolitical Factors Fuel Demand

Beyond demand-side pressures, geopolitical risks are further bolstering the case for mining investments. The ongoing conflict in Ukraine, along with broader supply chain disruptions, have highlighted the vulnerability of relying on single-source suppliers for critical resources. This has prompted governments worldwide to prioritize securing domestic access to essential minerals, a trend expected to accelerate in the coming years.

This push for supply chain resilience translates directly into increased demand for domestically produced metals and minerals, offering a significant advantage to mining companies operating in politically stable jurisdictions like Canada. The strategist notes a historical pattern: during times of geopolitical uncertainty, investors often gravitate towards commodities as safe-haven assets.

A Multi-Year Cycle

McMillan foresees the beginning of a multi-year cycle characterized by increased commodity demand and tightening supply. He anticipates that this dynamic will drive significant earnings improvements for mining companies as commodity prices climb and supply constraints persist. While short-term volatility is inevitable, the long-term outlook appears decidedly optimistic.

"We're at the beginning of a multiyear cycle," McMillan states. "I think there's a lot of room for mining stocks to rally."

Navigating the Risks

Despite the positive forecast, potential investors should be aware of the inherent risks. McMillan cautions that a severe global recession could dampen commodity demand, negatively impacting mining company profits. A significant economic downturn could overwhelm the positive effects of supply constraints and geopolitical factors. However, he believes the current valuation levels already incorporate a degree of recessionary risk, making the upside potential particularly compelling.

Canadian Mining Companies Well-Positioned

The outlook is particularly favorable for Canadian mining companies. Canada possesses abundant mineral resources, a stable political environment, and a well-developed regulatory framework. This combination positions Canadian firms to capitalize on the growing global demand for critical minerals and benefit from the trend towards secure supply chains.

It is important to note that Canaccord Genuity is a division of IGM Financial Inc., which also owns The Globe and Mail.