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Global finance: Metals & Mining has proven to be particularly sensitive to geopolitical changes. How do you guide your customers through this landscape?
Ilan Bahar: In the volatile environment they are experiencing today, it is important that our customers focus on long -term macro fundamentals. For example, energy transition and electrification trends do not disappear and the need for critical minerals is not reduced. We believe that the fundamentals of supply and demand in the longer term will persist through this period of volatility, the high demand pursuing a long -term bullish cycle for key products that support the energy transition.
The prices of gold and silver test peaks of all time while precious metals continue to be considered as natural coverage of a broader dislocation of the market. Thus, for our customers, it is important not to leave in the short term and reactionary decision -making altering their long -term strategic priority to strengthen the value of shareholders.
GF: Global Metals Dealmaking slowed down last year, but BMO has always provided impressive results in this sector. Is your in-depth expertise in the industry the key differentiator, or do additional elements contribute to your success?
Bahar: BMO remained firm in his commitment to the sector. Next year, we will organize the 35th edition of our annual Metals Global Metals, Mining & Critical Minerals. We are proud to say that this is the main conference in the world of the sector, giving the tone to the calendar year for business customers and the community of institutional investors. We are proud of knowledge of the deep sector of our organization and the strength of our customer relationships throughout the goods complex.
GF: Does the current macroeconomic backdrop suggest a possible increase in the activity of mergers and acquisitions in metals and mining in the future?
Bahar: We have in fact seen a reasonable quantity of consolidation among junior and intermediary producers where the industrial logic of the combination is strong and creates synergies. The combination offers increased exposure to current metal prices, and the opportunity arises to become greater and more relevant to investors in the sector.
The size provides additional liquidity and, in theory, more attention from investors. Consolidation with large capitalization in gold space has been extremely active in recent years, which has led to some clear leaders in gold industry – Newmont, Agnico and Barrick in North America – and we now see the next wave of consolidation between intermediaries and juniors.
We expect the producers to consider strengthening their longer -term development pipelines thanks to anterior stage acquisitions to use solid cash positions for future development and, where the occasion exists, to structure accredited transactions, since businesses at the previous stage exchange significant assessment reductions to producers. We have recently seen notable transactions in silver space, driven by a relative rarity value of primary silver assets.
GF: Agencies and government companies focus on essential minerals and rare elements, recognizing their role in the implementation of the AI revolution. Have you widened your offers in this space?
Bahar: We are listening to macroeconomic factors that will stimulate the increased importance of critical minerals for the global economic engine. The simplest demonstration of our commitment was the change of brand of our conference in 2023 to specifically include critical minerals in the name, but also by devoting part of the agenda. In addition to our commitment to research on actions, we have investment bankers focused on critical minerals stationed around the world, from our offices in Toronto, New York, London, Beijing, Vancouver and Melbourne.
GF: Sustainable finance has historically followed Boom and Boust cycles. Does the current cycle represent a fundamental change in this model?Bahar: Several sustainable technologies have now obtained a cost advantage over the technologies in place; Renewable power has the lowest marginal cost for electricity production, and energy efficiency technologies now have a positive current value for many investments. These changes – combined with continuously carbon -free electricity -free differential demand and improvements in the electrical network – mean that we see persistent demand for these technologies despite political uncertainty in certain jurisdictions, and a long -term continuous need for metals and minerals that support these investments: copper, uranium and critical minerals.