Tru Datt: The ASX resources sector looks strong in 2025 and here are three stocks that show why

Investment manager Emanuel Datt believes Australia’s resources sector is emerging as a strong opportunity in 2025 and narrows in on three stocks.

ASX ressies could be in for a super 2025. Pic via Getty Images

• Emanuel Datt believes Australia's resources sector is emerging as strong investment opportunity in 2025

• He says resources sector is inefficiently priced, presenting  opportunities for investors who understand nuances

• Australia's status as a premier mining jurisdiction adds another layer of appeal for local investors 

• Datt's three top ressie/energy stock picks for 2025 are… read on …

Welcome to Tru Datt, a Stockhead exclusive featuring the insights and opportunities of Emanuel Datt – founder and chief investment officer at Datt Capital, a Melbourne-based investment manager focused on identifying growth and special situation investments. 

Emanuel Datt believes Australia’s resources sector is emerging as a strong investment opportunity in 2025, offering a blend of inefficiency-driven alpha potential, global demand alignment and natural hedging benefits.

Datt said the sector holds appeal especially for investors looking beyond the ASX100 stocks.

"The resource sector remains one of the most inefficiently priced markets, presenting significant opportunities for investors who understand its nuances," he said.

"By applying global themes to local markets, skilled managers and investors can generate consistent alpha over time."

Datt believes inefficiency in the sector stems from its complexity and lack of institutional focus, especially in smaller-cap companies, creating opportunities for active investors to uncover hidden value.

"Natural resources are essential to daily life and underpin global economic progress," Datt said.

"Global population growth, urbanisation and rising prosperity in developing economies are driving increased demand for minerals and energy."

Australia is a premier mining jurisdiction

Australia’s status as a premier mining jurisdiction adds another layer of appeal for local investors. He said the country’s resource sector, largely export-driven and denominated in US dollars, acts as a natural hedge against domestic economic fluctuations.

Datt pointed to Australia’s resilience during the 2020 trade tensions with China, where sectors like wine and barley suffered under tariffs.

"Despite the geopolitical standoff, Australian iron ore and coking coal producers thrived, underscoring the sector’s robustness," he noted.

Datt has identified several areas poised for growth, including oil producers who benefit from disciplined capital management, gold and precious metals that offer a hedge against inflation and geopolitical instability, lithium and copper which are critical to the renewable energy transition and EV production, and industrial metals that support the broader economic and industrial development.

Sector valuations are favourable right now, both relative to other industries and historical averages.

Long-term global trends bolster outlook

Datt said long-term global trends, such as the shift toward renewable energy and electric vehicles, further bolster the outlook for key materials like lithium and copper.

"Transitioning to renewable energy and building the required infrastructure will demand significant input from the resource sector," he said. "This creates a long-term runway for growth in areas like lithium, copper and other industrial metals."

The supply side also supports a positive outlook. Cautious mining investment and oil companies prioritising debt reduction have created tighter supply conditions across key resource categories.

"Producers in the resource sector typically maintain strong balance sheets, giving them the flexibility to navigate volatility and seize opportunities," Datt added.

While some short-term challenges remain, Datt said he was optimistic about the sector’s future.

"For investors, resource exposure offers a way to diversify portfolios while capitalising on global trends. It’s a sector that combines strong fundamentals with significant long-term potential."

Datt's ASX resource and energy stock picks for 2025

Datt likes three resources and energy stocks on the ASX for 2025.

Santos (ASX:STO)

"With diversified assets, long-term LNG contracts, and a strong production portfolio, Santos enjoys stable cash flows that are prudently managed via its capital allocation framework," Datt said.

"The company enjoys direct exposure to what may be structurally stronger energy prices over time and a relatively modest valuation."

Adriatic Metals (ASX:ADT)

"Adriatic Metals owns the world-class Vares silver project in Bosnia, with exceptional grades of silver, zinc, and other critical metals, positioning it as a low-cost, high-margin producer," Datt said.

"The project is ramping up production, offering significant near-term cash flow potential."

Predictive Discovery (ASX:PDI)

"Predictive Discovery’s flagship Bankan gold project in Guinea is a significant, high-grade gold resource with the potential to become a tier-one gold production asset in West Africa," Datt said.

"With strong project economics, and a supportive mining jurisdiction, Predictive Discovery is well-positioned for long-term value creation."

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.

Originally published as Tru Datt: The ASX resources sector looks strong in 2025 and here are three stocks that show why