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Anglo American shows potential for hydrogen fuel in mining sector as EU publishes strategy roadmap, says JP Morgan

Hydrogen demand could support long-term platinum group metal demand but bring to higher capital expenditure

Anglo American PLC - Anglo American shows potential for hydrogen fuel in mining sector as EU publishes strategy roadmap, says JP Morgan

Anglo American PLC’s (LON:AAL) partnership with French energy services giant ENGIE to develop hydrogen-powered mine haul truck shows miners are “seriously considering the potential”, said JP Morgan.

Analysts said that prospects of using hydrogen as a fossil fuel alternative, both wider economy as well as within the global mining and steel sectors, is gaining traction with corporates, investors, and policymakers.

READ: Anglo American, Antofagasta and BHP targets hiked as Deutsche Bank turns positive on mining sector

Last week, the EU published a hydrogen strategy roadmap as part of its goal to reach carbon-neutrality by 2050, which includes commissioning 6 gigawatt of green hydrogen electrolysis capacity by 2024 and 80 gigawatt by 2030.

According to JP Morgan, this could be supportive of long-term platinum group metal demand from hydrogen fuel cells and a potential long-term risk to coking coal demand.

“Further development of fuel cell electric vehicle mining trucks could present significant implications for long-term sector capital expenditure (ie fleet replacement),” analysts added.

Quick facts: Anglo American PLC

Price: 2535 GBX

LSE:AAL
Market: LSE
Market Cap: £34.56 billion
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