Fund Managers Bet on Mining Supercycle; Mexico Weighs Risks

Global mining ETF assets more than doubled to US$87.4 billion by March 2026, as major fund managers including BlackRock and Fidelity position for a commodity supercycle driven by AI infrastructure, electrification and defense spending, dynamics that directly affect Mexico, home to ten mining companies generating combined revenues exceeding MX$517 billion and a sector that attracted US$34.47 billion in FDI between 1999 and 2024. Despite ranking 7th globally in mineral potential, Mexico's 53rd-place policy score in the Fraser Institute's 2025 survey,  reflecting stalled concessions, extended permitting and regulatory uncertainty since 2023 amendments.

Mining exchange-traded funds saw their total assets surge to US$87.4 billion by the end of March, more than twice the US$37 billion recorded a year prior, per ETFGI data compiled for Reuters. The shift is redirecting metal-sector capital flows on a global scale and drawing fresh attention to producing nations such as Mexico, where high mineral reserves coexist with an unresolved regulatory environment.

The 1Q26 brought US$8.24 billion in net inflows into mining funds, a US$10.8 billion reversal from the same period in 2025, when the Trump administration's sweeping tariff announcements drove US$2.52 billion out of the sector. Oil and gas and agriculture have also attracted higher inflows, marking one of the sharpest rotations toward hard assets in recent history.

Supercycle Thesis Gains Ground Among Major Fund Managers

Evy Hambro, Portfolio Manager, BlackRock, told Reuters that institutional money is moving away from richly valued technology equities toward commodities and physical assets, a transition he characterized as "the early stages of a commodity supercycle." The divergence is visible in market performance: Morningstar's US Technology Index dropped 9% in the 1Q26, while BHP and Rio Tinto, the two largest miners by market value, each reached record share price highs.

Hambro tied the structural demand argument to the growing capital requirements of grid modernization, data center construction, EV adoption, and charging infrastructure, summarizing the dynamic as a rise in "the material intensity of GDP." He distinguished the current cycle from China's urbanization-led metals boom of the 2000s, arguing that demand is now distributed across AI deployment, energy transition and defense procurement, a composition he described as "much more robust and resilient."

Taosha Wang, Lead Portfolio Manager,Fidelity, went further, stating the supercycle is already underway, with the Iran conflict accelerating government prioritization of supply security. Net inflows into oil and gas funds approached US$6 billion in the 1Q26, per ETFGI.

Copper drew US$198 million in fund inflows in March alone. Anix Vyas, Portfolio Manager, Harding Loevner, pointed to the metal's dual role in industrial and digital infrastructure. "Copper is very much in demand, aluminum very much in demand, even more so now, as the Iran crisis unfolds." He noted that diversified producers like Rio Tinto are positioned to capture demand across both categories.

Charlie Aitken, Group Investment Director, Regal Partners, which held AU$21 billion (US$15.05 billion) under management at the end of March, framed the copper opportunity in starker terms: "Copper is at the intersection of everything and critically undersupplied. There is no doubt in my mind that copper prices could double or triple over the next decade and owning copper producers will deliver multiples of the spot price growth."

Valuations in the sector have not kept pace with the inflow momentum. Mining equities currently trade at 7 to 8 times EV/EBITDA, roughly half the 14 times recorded during the 2008–2010 cycle peak. Yet the sector's structural weight remains limited ,the five largest miners hold just 0.4% of the MSCI ACWI Index, against 16.8% for the top five technology firms, a concentration gap that leaves metals markets exposed to outsized price swings as capital continues to flow in.

Mexico: Geological Appeal, Policy Drag

Against this backdrop, Mexico's mining sector presents a complicated picture for international capital. Ten companies account for the bulk of the country's mining output, with combined annual revenues exceeding MX$517 billion (US$29.74 billion), according to Expansión's ranking of the 500 most important companies in Mexico. The sector generated a GDP of nearly MX$940.69 billion in the 3Q25 from metallic and non-metallic mineral activity, excluding oil and gas, and employs approximately 265,000 people.

Americas Mining Corporation, the holding company controlled by Germán Larrea Mota, tops the ranking with revenues of MX$227.23 billion, consolidating copper, silver, molybdenum, zinc and gold operations through subsidiaries including Southern Copper Corporation and Asarco LLC. Industrias Peñoles ranks second with revenues of MX$121.9 billion. Fresnillo PLC, also part of Grupo BAL and the world's largest primary silver producer, follows with revenues of MX$64.09 billion. Newmont Minera Peñasquito, operating in Zacatecas, reported revenues of MX$42.56 billion.

Between 1999 and 2024, the sector accumulated US$34.47 billion in FDI, with Canada as the leading source, followed by the United States. 

Mexico climbed to 36th place in the Fraser Institute's 2025 Annual Survey of Mining Companies, up from 49th the previous year, driven largely by mineral potential, the country ranked 7th globally on the Best Practices Mineral Potential Index, leading Latin America. Policy performance, however, remains a drag. Mexico ranked 53rd out of 68 on the Policy Perception Index, trailing Chile at 24th and Brazil at 29th. All survey respondents for Mexico identified security and political stability as major deterrents to investment.

Since regulatory amendments introduced in May 2023, the sector has operated under extended permitting cycles, tighter state supervision and stalled concession grants. Pablo Méndez, Managing Partner, EC Rubio, notes that many companies have responded by redirecting capital toward brownfield expansion at established mines rather than pursuing new deposits.

Laura Díaz, Partner, DBR Abogados, warns that compliance timelines remain misaligned with operational realities. "Before investing, companies must clearly understand the legal status of the concession, existing permits, fiscal obligations, community relations, water rights, and environmental compliance," she said. Federal authorities have signaled a more pragmatic approach in 2026, including announcements on resuming geological exploration in Sonora, Durango and Sinaloa,  three states that, alongside Zacatecas and Chihuahua, account for the largest share of accumulated mining investment in the country.