ESG Standards Adherence Gives Metals Producer Edge in Attracting Investors

During the first quarter of this year, the stock of Press Metal Aluminium Holdings Bhd rose 18%, which made it the top performer on the benchmark stock index in Malaysia. The company’s focus on ESG standards has made it popular among investors.

Press Metal’s plants are powered using hydropower, an approach that has improved greatly amid higher metal prices. The company hopes that its products, which are manufactured with a smaller carbon footprint, will be high in demand.

This is happening at a time when the Top Glove Corporation, which is the largest rubber glove manufacturer in the world, is struggling to meet the environmental, social and governance criteria. The company exports its gloves to 195 countries.

Rising interest in ESG factors by investors and the international decarbonization agenda have put Press Metal, which is the largest smelter of aluminum in Southeast Asia, in a rather beneficial spot. Currently, China is working on meeting its carbon neutrality goal by 2060, which leaves the country’s producers of aluminum that still use coal caught, in the government’s crosshairs.

In a report, Hong Leong Investment Bank analyst Low Jin Wu stated that Press Metal’s hydro-run smelter used renewable energy to produce aluminum, which sat well with both ESG-centric investors and clients.

Fortress Capital Asset Management’s investment director Chua Zhu Lian noted that when it came to ESG criteria, Press Metal came first because of its tactical decision to have hydro-power as its power backbone as well as the company’s location in Sarawak. The director added that the scarcity of low-carbon producers of aluminum across the globe was also a factor in the company’s popularity.

Since October 2021, the company’s shares have doubled, making it the eighth-largest company in Malaysia’s stock gauge, by market value, which puts it ahead of Top Glove. A year ago, Press Metals was among the bottom-five firms while at some point in October, Top Glove almost became Malaysia’s most-valued company.

However, since 2021 began, Top Glove’s shares have dropped 24%, with vaccine rollouts reducing its appeal even further. Additionally, towards the end of March, the U.S. Customs and Border Protection staff at all ports of entry in the U.S. began seizing disposable gloves produced by the company over forced labor allegations, which only made things worse.

This move is bound to affect the company as well as two of the country’s key industries — gloves and palm oil — which are currently fighting harsh scrutiny over poor labor practices.

The good run being enjoyed by Press Metal is likely to serve as an encouragement to other mining companies, such as Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2), which are committed to best practices such as adhering to all health, environmental and community protection standards before, during and after their operations.

NOTE TO INVESTORS: The latest news and updates relating to Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) are available in the company’s newsroom at https://ibn.fm/EXN

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