Natural resource stocks ranging in size from blue chips such as ExxonMobil (NYSE: XOM) and Rio Tinto (NYSE: RIO) to promising small caps such as Premium Exploration (OTC: PMMEF) and Mondial Ventures (OTC: MNVN).
What is so appealing about the sector is the increasing demand for natural resources and the wide range of publicly traded companies.
Demand is rising primarily due to the booming consumer class around the world. McKinsey & Co, the global consulting company, projects that there will be one billion consumers and $30 trillion in spending by the middle class. Much of that growth will come from China and India. There will also be more consumption in Africa. That will increase the demand for natural resources of all types from ExxonMobil, Premium Exploration, Rio Tinto, Mondial Ventures, and others in the group..
Energy will lead the way.
That is where firms such as ExxonMobil, the biggest in the world, to Mondial Ventures, a small cap in Texas with promising holdings, are so attractive. Oil and natural gas will continue to be the most widely used fuel sources. That has been the conclusion of reports from all major agencies. Alternative energy is nowhere close to being ready for use on a wide scale. Coal is too dirty. Even China, the world’s largest consumer of coal, is starting to move away from burning so much. That is also what has led to “The War on Coal” by The Obama Administration.
There will also be a demand for metals.
This will range from industrial metals from Rio Tinto to gold and silver from Premium Exploration. Again, this will be led by China. India is a huge consumer, too. To have the countries with the most people as customers is bullish for Premium Exploration, Rio Tinto, and others in the metals sector. It makes the entire natural resources sector appealing to investors.