In this piece, we will take a look at the 13 best mining stocks to buy now. If you want to skip our analysis of the mining industry and want to jump to the top five stocks in this list, head on over to 5 Best Mining Stocks To Buy Now.
The global supply of mineral commodities from underground sources is crucial for numerous industries worldwide. In terms of volume, the most widely extracted commodities globally include iron ore, coal, potash, and copper. Leading in coal production are China, Indonesia, and India, while China also holds the third position as the largest producer of iron ore. Notably, the country also emerged as the primary mining country for various commodities, particularly in the case of rare earths, where it contributed to 70% of the global production in 2022, underscoring its increasing prominence in this sector.
Despite strong financial performance, mining revenue remained constant at $711 billion in 2022. However, increasing costs and economic uncertainties resulted in a squeeze on EBITDA margins, declining from 32% to 29%, as indicated by a recent analysis by PwC into the sector. The 20th edition of PwC’s annual review, titled “Mine: The era of reinvention,” focused on trends within the global mining industry, particularly examining the Top 40 mining companies. The report revealed a significant growth in market capitalization for these top companies, soaring from $400 billion in 2003 to an impressive $1.2 trillion in 2022.
One particular mineral, Gold, holds significant importance in the financial world, particularly due to its well-established relationship with the U.S. dollar. The correlation between gold prices and the value of the U.S. dollar is widely recognized. Changes in the dollar’s value tend to result in corresponding changes in gold prices. This relationship is grounded in the perception of gold as the ultimate safe-haven asset. Consequently, gold prices generally exhibit an inverse correlation with the U.S. dollar. Gold is often regarded as a key indicator of investor sentiment against the dollar. Notably, in the week ending December 22, gold experienced a second consecutive rise, attributed to the decline in the dollar and U.S. Treasury yields, fueled by growing expectations that the Federal Reserve will implement interest rate cuts early in the coming year.
The global mining market witnessed growth, increasing from $2022.6 billion in 2022 to $2145.15 billion in 2023, with a compound annual growth rate (CAGR) of 6.1%. However, the Russia-Ukraine war has impeded the prospects of a swift global economic recovery from the COVID-19 pandemic, particularly in the short term. This conflict has resulted in economic sanctions on multiple nations, a surge in commodity prices, and disruptions in the supply chain. These factors have contributed to inflation in both goods and services, impacting various markets worldwide. Despite these challenges, the mining market is anticipated to continue its growth trajectory, reaching $2775.5 billion in 2027, with a projected CAGR of 6.7%.
With that in mind, today we will explore some of the best mining stocks for potential investment, with prominent choices including Freeport-McMoRan Inc. (NYSE:FCX), Teck Resources Limited (NYSE:TECK), and Agnico Eagle Mines Limited (NYSE:AEM).
Drills extracting gold from a gold mine, revealing the company’s gold mining operation.
Our Methodology
In creating our selection of the best mining stocks to buy, we initially identified the forty largest mining companies globally, ranking them based on market capitalization. Subsequently, we assessed the number of hedge funds that had invested in their shares as of September 2023 using data from Insider Monkey’s database, encompassing 910 hedge funds. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
13. Sigma Lithium Corporation (NASDAQ:SGML)
Number of Hedge Fund Holders: 15
Sigma Lithium Corporation (NASDAQ:SGML) stands as a prominent Canadian mining enterprise specializing in the exploration and development of lithium deposits located in Brazil. The company boasts full ownership of the Grota do Cirilo, Genipapo, Santa Clara, and São José properties, which collectively cover 27 mineral rights across an expansive area of approximately 191 square kilometers.
In September, Sigma Lithium Corporation (NASDAQ:SGML) announced the successful production of 22,500 tonnes of battery-grade, carbon-neutral lithium, marketed as “Triple Zero Green Lithium.” This eco-friendly product is devoid of hazardous chemicals and tailings, aligning with sustainability…
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