Zinc, Lead May be Good Long-term Investments

MoneyWeek reported that based on the current rates of discovery and production, lead and zinc will be in the shortest supply in the next 10 to 15 years. That means now may be the time to start thinking about investing in those metals.

As quoted in the market news:

But the discovery-to-production ratio for zinc is 0.7. And for lead, it’s 0.5. That points to a huge shortfall. Discovery rates won’t even match current production, let alone maintain future supplies.

This means more money will have to be spent on exploration – and with more success at finding metal this time. Trouble is, there is no appetite for exploration investment at present. Too many people have had their fingers burned.

Sure, all it will take is for a couple of winners to emerge, and the appetite for risk will bounce back. But – and here’s the vicious circle – someone will have to fund those winners in the first place.

What’s most likely to encourage investment is that lead and zinc prices will rise, due to the pending shortages. Rising metal prices usually lead to more investment in exploration. And so the boom-bust cycle that has blighted mining for all eternity continues to turn.

Click here to read the full MoneyWeek report.