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In this piece, we will take a look at the ten best aluminum and aluminum mining stocks to buy. If you want to skip our introduction to the aluminum industry, then check out 5 Best Aluminum and Aluminum Mining Stocks To Buy.

Aluminum is one of the most important metals in the world especially due to its unique properties that place it somewhere in between a metal and a non metal. This is because while aluminum has a high melting point which makes it suitable for use in a variety of cases, the metal is not the best conductor of electricity. Aluminum is also quite resistant to corrosion in most conditions, which makes it a durable choice for building structures that require both robustness and less weight such as airplanes. Additionally, aluminum isn't toxic either which makes it suitable for packaging edibles.

Looking at the global aluminum market as a whole, it was estimated to be worth $159 billion by the end of 2021 and $255 billion in the following year. From then until 2029, the industry is expected to grow at a compounded annual growth rate (CAGR) of 6.1% by the end of 2029 to be worth $255 billion by the end of the forecast period. The global aluminum industry, like other sectors, was disrupted during the coronavirus pandemic as large scale industry and manufacturing shut downs reduced the demand for the metal. A key benefit of aluminum is that the metal does not lose strength or consistency after recycling, which makes it quite suitable for use cases such as soft drink cans. Additionally, a key drive of global aluminum demand is expected to come from the automobile industry, due to the metal's light weight and strength – advantages that we have mentioned above.

Shifting gears to take a look at aluminum prices, there are several indexes that track the commodity. Aluminum prices typically correlate with the economy, since more construction and industrial production incentivize producers to expand their mining activities and produce more. There are different grades of aluminum and their prices often vary by quite a bit. For example, earlier this year when the London Metals Exchange (LME) decided to continue allowing Russian aluminum to be listed, prices of European 5083 aluminum were around $5,000 a metric ton while prices for Chinese aluminum stood at roughly $2,600.

We've taken a detailed look at the global aluminum production roadmap as part of our coverage of the 15 Largest Aluminum Producing Countries In The World. This data shows that there wasn't a single European country in the top five largest aluminum producers, and Chinese aluminum smelter output of 40 metric tons as of 2022 end was greater than the next 14 countries on the list. Therefore, it's natural for the prices to be low, as greater supplies often mean aluminum producers are able to spread costs across a large number of operational units. Global aluminum consumption stood at a strong 65.78 million tons last year, and it is projected to 78 million tons by 2029. Aluminum production requires investment as well, since as opposed to crude oil where the mined product is simply shipped to a refinery, aluminum is not available in its pure form. Instead, the metal is mined by digging up bauxite from roughly 15 meters below the Earth's surface.

Moving towards the corporate side of the industry, few standalone companies operate aluminum mines. Instead, large mining giants such as Rio Tinto Group (NYSE:RIO) typically produce the metal along with other mined products. However, since the market is unsaturated, firms that choose to exclusively focus on aluminum production often see greater cost savings and an enviable control of market share. One such example in the aluminum industry is the American firm Alcoa Corporation (NYSE:AA). Alcoa is one of the oldest companies in the world, which was set up more than a hundred years back in 1886. Its revenue for the four latest quarters sits at $11 billion, but intensely high production costs force the gross margin down to just 6.7%. So, for every $1,000 of aluminum that Alcoa mines, the firm is able to profit from just $67 of product. Its earnings performance has also fluttered recently, as out of the four latest quarters, the firm has beaten analyst EPS estimates in only two. Other pureplay aluminum companies are Kaiser Aluminum Corporation (NASDAQ:KALU) and Constellium SE (NYSE:CSTM).

As for the current state of aluminum business operations, here's what the management of Constellium SE (NYSE:CSTM) had to say during the firm's latest quarterly earnings call:

After a strong first quarter performance, our recordable case rate declined in the second quarter, leading to a rate of 1.9 per million hours worked for the first half of the year. This is a humbling reminder that while we always strive to deliver best-in-class safety performance, we need to constantly maintain our focus on safety to achieve the ambitious targets we have set. It is a never-ending task for our company and one we take very seriously. Turning to our financial results.

Shipments were 398,000 tons, down 6% compared to the second quarter of 2022 due to lower shipments in PARP and AS&I. Revenue of €2 billion decreased 14% compared to last year, as improved price and mix was more than offset by lower shipments and lower metal prices. Remember, while our revenues are affected by changes in metal prices, we operate a pass-through business model, which minimizes our exposure to metal price risk. Our value-added revenue, which reflects our sales, excluding the cost of metal was €785 million, up 11% compared to the same period last year. Our net income of €32 million in the quarter compared to a net loss of €32 million in the second quarter last year. As you can see in the bridge on the top right, adjusted EBITDA of €209 million in the quarter was up 5% compared to last year and is a new quarterly record for the company.

With these details in mind, we decided to take a look at some top aluminum stocks, with Crown Holdings, Inc. (NYSE:CCK), Alcoa Corporation (NYSE:AA), and Apollo Global Management, Inc. (NYSE:APO) ranking the highest.

10 Best Aluminum and Aluminum Mining Stocks To Buy

Kzenon/Shutterstock.com

Our Methodology

To compile our list of the best aluminum and aluminum mining stocks we first made a list of all the companies that either pureplay aluminum firms or work with the metal as part of their broader operations. They were then ranked by the number of hedge fund shareholders as of June 2023.

10 Best Aluminum and Aluminum Mining Stocks To Buy10. Kaiser Aluminum Corporation (NASDAQ:KALU)

Number of Hedge Fund Investors In Q2 2023: 11

Kaiser Aluminum Corporation (NASDAQ:KALU) is an American firm headquartered in Memphis, Tennessee. It makes and sells aluminum products for industrial and engineering use. Its shares are rated Hold on average by analysts which have also penned in a modest $2.28 share price upside based on the average price target.

During Q2 2023, 11 out of the 910 hedge funds part of Insider Monkey's database had held a stake in Kaiser Aluminum Corporation (NASDAQ:KALU). Out of these, the firm's biggest investor is Ken Fisher's Fisher Asset Management since it owns 163,710 shares that are worth $11.7 million.

Along with Alcoa Corporation (NYSE:AA), Crown Holdings, Inc. (NYSE:CCK), and Apollo Global Management, Inc. (NYSE:APO), Kaiser Aluminum Corporation (NASDAQ:KALU) is a top aluminum stock.

9. Century Aluminum Company (NASDAQ:CENX)

Number of Hedge Fund Investors In Q2 2023: 15

Century Aluminum Company (NASDAQ:CENX) is another aluminum products company. It has operations in the U.S. and in Europe. The firm expanded its operations base earlier this year and saw activity in September when a Seattle based investment firm increased its stake in the company by 33%.

By the end of this year's second quarter, 15 hedge funds out of the 910 tracked by Insider Monkey had bought the firm's shares. Century Aluminum Company (NASDAQ:CENX)'s largest hedge fund investor among these is Ken Fisher's Fisher Asset Management through its $21 million stake.

8. Tredegar Corporation (NYSE:TG)

Number of Hedge Fund Investors In Q2 2023: 17

Tredegar Corporation (NYSE:TG) is an aluminum end product company that produces goods that are used in construction. Institutional investors hold almost 70% of the firm's shares, and given any jitters in the economy, the stock can become vulnerable since Tredegar Corporation (NYSE:TG)'s business is tied to the health of electronics production and other industries.

After digging through 910 hedge funds for their June quarter of 2023 investments, Insider Monkey discovered that 17 had invested in Tredegar Corporation (NYSE:TG). Mario Gabelli's GAMCO Investors is the company's biggest stakeholder since it owns $27.4 million worth of shares.

7. BHP Group Limited (NYSE:BHP)

Number of Hedge Fund Investors In Q2 2023: 23

BHP Group Limited (NYSE:BHP) is a global mining giant that engages in aluminum mining through its business divisions. Bullishness for natural resources seems to be on analysts' minds as they have rated the stock as a Strong Buy on average and penned a $7 upside for the shares. However, investment bank Goldman Sachs is going against the tide, as it downgraded the shares to Neutral in a July 2023 analyst note and reduced the price target.

As of June 2023, 23 out of the 910 hedge funds surveyed by Insider Monkey were the firm's investors. BHP Group Limited (NYSE:BHP)s largest shareholder out of these is Ken Fisher's Fisher Asset Management through its $1.1 billion investment.

6. Reliance Steel & Aluminum Co. (NYSE:RS)

Number of Hedge Fund Investors In Q2 2023: 26

Reliance Steel & Aluminum Co. (NYSE:RS) is an American metal products manufacturer that deals in aluminum, copper, and other materials. Keybanc maintained an Overweight rating on the shares in July 2023, and the shares are rated Buy on average.

23 out of the 910 hedge funds part of Insider Monkey's Q2 2023 database had bought Reliance Steel & Aluminum Co. (NYSE:RS)'s shares. Donald Yacktman's Yacktman Asset Management is the biggest investor among these due to its $338 million stake.

Crown Holdings, Inc. (NYSE:CCK), Reliance Steel & Aluminum Co. (NYSE:RS), Alcoa Corporation (NYSE:AA), and Apollo Global Management, Inc. (NYSE:APO) are some best aluminum and aluminum stocks to buy.

Click to continue reading and see 5 Best Aluminum and Aluminum Mining Stocks To Buy.

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A term sheet in circulation shows Stanmore Resources Ltd. is seeking to borrow a total of $1.1 billion for its acquisition of the Daunia coal mine, according to people familiar with the matter. The coal producer is also in talks to secure a $350 million bank loan, said the people, who asked not to be named because the matter is confidential.

Stanmore would fund the remainder of the purchase via equity, the people also said. The company declined to comment when contacted by Bloomberg.

Click here for more on the proposed terms

BHP announced earlier this year it planned to divest two of its coal mines in Queensland, Daunia and Blackwater, saying they’d struggle to compete for capital as the company changes tack.

Indonesian mining contractor PT Bukit Makmur Mandiri Utama and Stanmore made initial bids for at least one of them and private credit funds were considering jumbo loans to help with the financing, Bloomberg reported late last month.

Private debt has become an increasingly sought-after funding tool globally, as banks pull back amid a drop in investor risk appetite. Stanmore already relied on this type of lending in 2021 to partially fund its acquisition of BHP’s 80% stake in a coal operation joint venture with Mitsui & Co. in Bowen Basin, Queensland.

For BHP’s Blackwater mine, Bukit Makmur Mandiri Utama is in talks with two banks for a loan of as much as $750 million to back its bid, according to people familiar with the matter.

The Indonesian mining contractor is in separate talks with private credit funds and global banks for an acquisition loan, which would be held at the level of a special purpose vehicle, they said.

–With assistance from Harry Brumpton.

(Writes through to focus on private credit, adds Buma loan reference in final paragraphs)

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(Bloomberg) — Private credit funds are considering jumbo loans to help finance bids for coal mines that BHP Group Ltd. is seeking to offload in Australia, people familiar with the matter said.

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The funds are in talks to potentially underwrite financing of $2 billion to $3 billion for competing bids from Indonesian mining contractor Bukit Makmur Mandiri Utama Pt (Buma) and Australian coal producer Stanmore Resources Ltd., according to the people, who asked not to be identified speaking about private matters.

The mines are called Daunia and Blackwater in the northeastern state of Queensland. Buma and Stanmore have made initial bids for at least one of them, the people said. A deal for both mines could be valued at about $5 billion, and the remainder of the financing could be arranged by banks, the people added.

Demand for private credit in Asia and globally has been picking up lately, as the $1.5 trillion market worldwide steps in to help finance deals where banks have often pulled back. In the second quarter globally, 34 new funds raised $71.2 billion, more than double the previous three months, according to data from research firm Preqin. In Asia, where the asset class is still growing from a lower base, firms raised $1.4 billion, up from $180 million in the first quarter.

BHP announced its divestment plan in February for Daunia and Blackwater, which it co-owns with Mitsubishi Corp.

Both Buma and Stanmore have made it through to the next round of bidding, the people said. Whitehaven Coal Ltd. is also still in the running for the mines among others, according to the people.

Stanmore is no stranger to private credit. In November 2021, it tapped $625 million from private credit funds managed by Varde Partners, Canyon Capital Advisors, Farallon Capital Asia Pte, and other credit funds to partially fund its acquisition of BHP’s 80% stake in a coal operation joint venture with Mitsui & Co. in Bowen Basin, Queensland.

The other bidder Buma is already a contractor at the coal mine Blackwater, under a A$540 million contract.

Stanmore, Buma, and Whitehaven declined to comment. BHP didn’t respond to a request for comment on the auction timeline and who made it to the next round of bidding.

–With assistance from James Fernyhough, Rob Verdonck and Davide Scigliuzzo.

(Retops and adds context throughout)

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By Tom Westbrook and Dhara Ranasinghe

SINGAPORE/LONDON (Reuters) – Investors looking for clues about the state of China's economy beyond official data are seeing red warnings flash across a range of informal gauges, prompting many to back out of global assets exposed to the slowdown.

The selling is sucking the wind out of stock markets from London to Bangkok and weighing on China proxies from the Australian dollar to New Zealand dairy prices and shares from luxury goods giant LVMH to miner BHP and casino Las Vegas Sands.

As the post-pandemic period has failed to bring a sustained recovery in consumer spending, or to thaw the near-frozen property market, most analysts now figure the world's second-largest economy is going to miss its 5% growth target this year.

Beneath the headlines, investors are even gloomier with higher-frequency and more arcane data from a shrinking current account surplus to ballooning deposits and soft surveys pointing to a deep-seated confidence problem.

"It's pretty weak," said Sat Duhra, a portfolio manager at Janus Henderson who devises a macro score for countries by tracking seven factors including PMI surveys, real exchange rates, current accounts, growth estimates and liquidity.

"PMIs have been weak, GDP is being revised downward. It's a tricky situation," he said. "And I don't see any point, at this point, in taking a bullish view on China when all of these things are going on."

His fund invests in China, but away from economically sensitive sectors such as banks, property or industrials.

Beyond China, which is the largest trading partner of most of its neighbours and other big economies, souring demand is beginning to take a toll.

New Zealand's Fonterra, the world's biggest dairy exporter, has cut its farm gate milk price forecast twice in a month citing "reduced demand from key importing regions." It previously noted that the largest slowdown was in China.

Last week BHP Group posted its weakest annual profit in three years and manganese-focused spinoff South32 said profit fell by nearly two thirds. New Zealand's a2 Milk Co warned of weak growth in China's infant formula market.

Shares of BHP, S32 and a2 fell.

Seema Shah, chief global strategist at Principal Global Investors in London, sees the slowdown biting in Europe, where investors tend to connect the fortunes of German manufacturers with the those of their Chinese customers.

"We have become a bit more gloomy on Europe," she said, noting China also poses a risk to U.S. equities.

RETREAT

This year's run of bad indicators has wrong-footed investors, who had been positioning for companies such as BHP and currencies such as the Australian dollar and Thai baht to rally as China emerged from the COVID-19 pandemic in a blaze of spending.

Instead, Chinese visitors to top destination Thailand, for example, are barely a third of pre-pandemic levels, the baht is stalled and in Asia only Hong Kong's Hang Seng has fallen further than Thai stocks' 6.5% drop.

Even in Japan, the stock market success story of the year so far, portfolio manager Zuhair Khan at UBP Investments says he's shorting or avoiding companies reliant on China sales.

The scale of the problem, with data showing consumer and producer prices falling and youth unemployment running over 20%, indicates an aggressive policy response is needed, and quickly, he said, something that is so far yet to arrive.

To be sure, although they too have lately retreated, stocks of companies such as casino-operator Las Vegas Sands and luxury-goods seller LVMH are up 11% and 16%, respectively, this year, against a 10% gain for world stocks, and some investors remain bullish.

"We expect group travel to resume in late 2023 and support Chinese spend on luxury goods globally," said Prashant Bhayani, Asia chief investment officer at BNP Paribas Wealth Management.

But it's now a waiting game for valuations to reflect more realistic assumptions.

"The China reopening as a thematic has played out to some extent. However, I think more importantly, it has fallen short of initial expectations," said Jagdeep Ghuman, a portfolio manager for U.S. asset manager Nuveen.

"It’s (now) very much on a case by case basis, driven by valuations. Overall we have seen that reset of expectations play out in the market and so there has been volatility in the shares of these companies."

(Reporting by Tom Westbrook and Rae Wee in Singapore, Dhara Ranasinghe in London and Summer Zhen and Xie Yu in Hong Kong. Editing by Sam Holmes)

Key Insights

Institutions' substantial holdings in BHP Group implies that they have significant influence over the company's share price
45% of the business is held by the top 25 shareholders
Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of BHP Group Limited (ASX:BHP) can tell us which group is most powerful. With 49% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

Let's take a closer look to see what the different types of shareholders can tell us about BHP Group.

See our latest analysis for BHP Group

ownership-breakdownWhat Does The Institutional Ownership Tell Us About BHP Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in BHP Group. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at BHP Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth

BHP Group is not owned by hedge funds. BlackRock, Inc. is currently the company's largest shareholder with 7.1% of shares outstanding. The second and third largest shareholders are State Street Global Advisors, Inc. and The Vanguard Group, Inc., with an equal amount of shares to their name at 5.1%.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of BHP Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own less than 1% of BHP Group Limited. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own AU$60m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public– including retail investors — own 47% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that BHP Group is showing 2 warning signs in our investment analysis , and 1 of those is concerning…

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Toronto, Ontario–(Newsfile Corp. – August 24, 2023) – Honey Badger Silver Inc. (TSXV: TUF) ("Honey Badger" or the "Company") is pleased to provide an update on its ongoing exploration work at its wholly owned Plata Silver Project, Yukon. The project is located in eastern Yukon, adjacent to Snowline Gold Corp.'s Rogue Project. Field work completed this year was undertaken by a crew contracted from Archer Cathro & Associates (1981) Limited and included prospecting, geological mapping, and geochemical sampling. A total of 308 soil and 56 rock chip samples were collected and are being assayed. Assay results will be released when they have been received and interpreted. The objective of this year's field program was to further define the exploration targets at Plata and to define drill targets for future testing.

The Company's CEO, Dorian L. (Dusty) Nicol, commented, "We remain very excited about the exploration potential at our Plata Project. Our confidence in Plata's potential has been fueled by recent announcements by Snowline Gold Corp. from their Rogue Project, adjacent to Plata. Our geologic mapping this year continues to identify mineralization in a geologic setting similar to Rogue, associated with structures that provided pathways for mineralizing fluids from intrusions. We look forward to receiving the assay results from this season's sampling so that we can interpret them and plan the next steps of work. Meanwhile, the field crews have mobilized to our Groundhog and Clear Lake projects."

Multiple new zones of mineralization were observed during the program, associated with previously identified soil geochemical anomalies. Mineralization observed comprised sulphides and iron oxides associated with silicification and quartz-veining. Field observations will be collated with assay data when they become available. This will lead to recommendations for the next phase of work on this project.

The map below shows the location of the Company's Plata Project in relation to Snowline Gold Corp.'s Rogue Project, where significant gold mineralization is being discovered, including a drill intercept of 553.8 metres of 2.48 g/t Au, beginning from surface (Snowline Gold News Release dated August 3, 2023). Mineralization at Rogue is associated with Cretaceous-age intrusive rocks that comprise the Tintina Belt of gold deposits, including the Fort Knox in Alaska and Eagle deposits near Mayo in Yukon. The geologic setting at Plata is similar, with evidence of intrusive rocks of the same age and fracture and vein style mineralization.

Figure 1: Plata Silver Project

To view an enhanced version of this graphic, please visit:https://images.newsfilecorp.com/files/3204/178355_8fb5f3b804ea1bef_001full.jpg

Technical information in this news release has been approved by Heather Burrell, P.Geo., a senior geologist with Archer, Cathro& Associates (1981) Limited, and Qualified Person (QP) for the purpose of National Instrument 43-101.

About Honey Badger Silver Inc.

ON BEHALF OF THE BOARD

Dorian L. (Dusty) Nicol, President & CEO

For more information please visit our website www.honeybadgersilver.com or contact Ms. Michelle Savella for Investor Relations | msavella@honeybadgersilver.com | +1 (604) 828-5886

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/178355

(Bloomberg) — BHP Group Ltd., the world’s biggest miner, missed analysts’ forecasts as its full-year profit slumped, with China’s struggling economy weighing on demand for iron ore and other commodities.

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Twelve months after posting its highest-ever profit as prices soared, the deteriorating economic outlook in the world’s biggest metals consumer has seen BHP’s earnings from iron ore, copper, coal and nickel recording double-digit percentage declines. Inflation, particularly in labor costs, also put pressure on profits, the company said Tuesday.

BHP’s plunging earnings mirror those posted by iron ore rival Rio Tinto Group last month, with miners holding their breath for an upswing in China’s economy since Beijing abandoned “Covid Zero” restrictions last November.

A slew of recent data suggest steel and iron ore demand could contract for the rest of the year, with the Chinese property market still in a trough, and authorities are unwilling to encourage massive building despite the slowdown reflected in July’s industrial output.

Read More: Solving China’s Steel Demand Mystery: Energy Daily

China’s near-term outlook was “contingent on the effectiveness of recent policy measures,” Chief Executive Officer Mike Henry said in a statement Tuesday, adding he expected “buoyant growth in India with strong construction activity underpinning an expansion in steelmaking capacity.”

BHP’s underlying attributable profit from continuing operations fell to $13.4 billion in the 12 months to June 2023, the Melbourne-based company said in a regulatory filing. It will pay a final dividend of 80 cents per share, compared with $1.75 the year before.

Still, BHP said it expects China steel production to reach more than 1 billion tons this calendar year, as it did last year. But in the medium term, “China’s demand for iron ore is expected to be lower than it is today as it moves beyond its crude steel production plateau and the scrap-to-steel ratio rises,” it said in the report.

Henry said on a media call Tuesday that he expected China’s economy to “pick up toward the back end of this year.” New-start property development was the biggest drag on steel demand, but “there’s many parts of the Chinese economy that are actually running quite well,” including green technology and the automotive sector.

BHP has put “future facing commodities” copper, nickel and potash at the center of its growth plans, driven by population growth, urbanization and the clean energy transition. Henry said capital expenditure would increase to around $10 billion in the current financial year, up from $7.1 billion last year, as the company invests more in these minerals.

The miner said it’s studying increasing annual iron ore production from its Australian operations to 330 million tons a year, up from 257 million tons now. BHP gave no update on the progress of the sale of two coal mines in Australia’s Queensland state.

(Updates with steel production forecast in seventh paragraph; iron ore expansion plans in ninth)

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Arm IPO

SoftBank-owned (9984.T) chip designer Arm is set to list on the Nasdaq (^IXIC) in the US and will list under the ticker symbol “ARM.”

The UK-based company made the filing to IPO on Monday but didn’t provide a projected share price in its paperwork.

Arm was bought by SoftBank in 2016 in a $32bn (£25bn) deal.

The company develops central processing unit (CPU) products and related technology, and also provides other chips and software development tools.

CPUs are hot property as many of the world’s leading semiconductor companies rely on them to develop their products — and Arm's customers already include Apple (AAPL), Alphabet (GOOG), and Mercedes-Benz (MBG.DE).

“The starting gun being fired on the IPO of Nvidia’s peer Arm on Nasdaq, having snubbed London as a listing destination, may help provide further fuel for the momentum behind the artificial intelligence story,” AJ Bell investment director Russ Mould said.

Microsoft (MSFT)

Microsoft has submitted a restructured proposal to the CMA for approval of its Activision Blizzard (ATVI) deal under UK law after its original $69bn deal was rejected by competition authorities.

In its new proposals, Microsoft will no longer buy the rights to Activision’s games stored in the cloud. Instead, Activision’s games such as Candy Crush will be sold to games publisher Ubisoft (UBI.PA) who will supply the content to Microsoft and its competitors.

That new development means, Microsoft won’t be able to release Activision Blizzard’s games exclusively on its own cloud streaming service, Xbox Cloud Gaming, opening up this offering to the wider market.

“By no longer purchasing the rights to Activision’s cloud games, Microsoft is hoping that this will appease the CMA and address its concerns over competition, potentially allowing the tie-up to cross the line this time. The deal has divided regulators globally, with Microsoft winning the antitrust greenlight in the EU while facing hurdles in the US and the UK," Victoria Scholar, head of investment at Interactive Investor, said.

“When the CMA blocked the deal in April, Microsoft’s president Brad Smith described it as the tech giant’s ‘darkest days’ of working with the UK and said the decision was ‘bad for Britain.’ While today’s update is a step in the right direction towards regulatory approval, it is not a done deal just yet. Next, the CMA said it will ‘carefully and objectively assess the details.”

BHP (BHP.L)

Australia’s biggest mining company BHP, which shifted its primary listing to Australia in 2022, has cut its dividend in half and reported its lowest annual profit in three years — a 37% fall to $13.4bn.

The company noted lower commodity prices and inflationary pressures.

However, BHP said commodity demand has remained relatively robust in China and India “even as developed world economies have slowed substantially”.

“China’s trajectory is contingent on the effectiveness of recent policy measures. We expect buoyant growth in India with strong construction activity underpinning an expansion in steelmaking capacity. More broadly, there is increased recognition of the importance of critical minerals and strategies across the globe to incentivise investment in supply and demand, which provides opportunities and challenges," BHP said.

BHP also said it is continuing with efforts to sell the Daunia and Blackwater coking coal mines in Queensland, Australia.

“The relatively muted reaction on the part of investors to this news reflects an acceptance that last year was something of a one-off as the invasion of Ukraine led to a short-term bump in commodity prices. Today’s results from BHP reflect a move back to something like reality,” Mould said.

Nvidia (NVDA)

Shares in Nvidia closed up nearly 9% at the end of trading in the US on Monday ahead of the US software company’s latest earnings release on Wednesday.

The tech giant, which makes graphics processing units (GPUs), had its stock boosted after HSBC analysts lifted their price target for the company’s stock from $600 to $780 on an increasing sales forecast for fiscal 2024.

It also comes after Morgan Stanley analysts recently said that Nvidia’s stock is the firm’s top pick following its most recent earnings report.

Nvidia, which is now valued at over $1tn (£786.9bn), has seen its shares surge nearly 200% so far this year due to the company positioning itself as a key player in the artificial intelligence (AI) sector.

However, strategists at Morgan Stanley also recently highlighted that the AI bubble could be nearing a peak.

Watch: Zoom stock pops on earnings beat, guidance raise

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Anglo American plc (LON:AAL) is about to trade ex-dividend in the next four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Anglo American investors that purchase the stock on or after the 17th of August will not receive the dividend, which will be paid on the 26th of September.

The company's next dividend payment will be US$0.55 per share, on the back of last year when the company paid a total of US$1.29 to shareholders. Looking at the last 12 months of distributions, Anglo American has a trailing yield of approximately 4.7% on its current stock price of £21.51. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Anglo American

If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. Anglo American paid out 75% of its earnings to investors last year, a normal payout level for most businesses. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. Over the past year it paid out 169% of its free cash flow as dividends, which is uncomfortably high. We're curious about why the company paid out more cash than it generated last year, since this can be one of the early signs that a dividend may be unsustainable.

Anglo American paid out less in dividends than it reported in profits, but unfortunately it didn't generate enough cash to cover the dividend. Were this to happen repeatedly, this would be a risk to Anglo American's ability to maintain its dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividendHave Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're discomforted by Anglo American's 7.0% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Anglo American has delivered 4.8% dividend growth per year on average over the past 10 years. Growing the dividend payout ratio while earnings are declining can deliver nice returns for a while, but it's always worth checking for when the company can't increase the payout ratio any more – because then the music stops.

Final Takeaway

Is Anglo American worth buying for its dividend? It's definitely not great to see earnings per share shrinking. The company paid out an acceptable percentage of its income, but an uncomfortably high percentage of its cash flow over the past year. It's not the most attractive proposition from a dividend perspective, and we'd probably give this one a miss for now.

Although, if you're still interested in Anglo American and want to know more, you'll find it very useful to know what risks this stock faces. Case in point: We've spotted 3 warning signs for Anglo American you should be aware of.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

July 31 (Reuters) – The following are the top stories in the Financial Times. Reuters has not verified these stories and does not vouch for their accuracy.

Headlines

– BHP expects Indian steelmaking boom to drive its coal business

– UK's nuclear power ambitions for 2050 lack clear plan, say MPs

– UK government cuts cost of polluting in latest anti-green move

– UK needs to step up engagement with Africa on security, says foreign secretary

Overview

– BHP Group's chief commercial officer Vandita Pant has said the rapid expansion of India's steel industry is expected to boost the miner's coal business significantly.

– The British government's goal to more than triple its nuclear power generation capacity by 2050 lacks of a strategic plan to achieve it, according to a report by lawmakers on the House of Commons science, innovation and technology committee.

– The UK government has made it cheaper to pollute in Britain compared with the European Union, by watering down reforms to the carbon market, including offering more allowances than expected to polluting industries.

– British foreign minister James Cleverly has said that the country needs to increase its engagement with African nations on "genuinely sustainable security measures", acknowledging that some countries have turned to the Wagner group to meet an "unfulfilled need".

(Compiled by Bengaluru newsroom)

Toronto, Ontario–(Newsfile Corp. – July 31, 2023) – Honey Badger Silver Inc. (TSXV: TUF) ("Honey Badger" or the "Company") announces that Dorian L. (Dusty) Nicol has been appointed as the Company's interim Chief Executive Officer ("CEO"), replacing George Davis. Nicol has been serving as Honey Badger's Chief Operating Officer.

Chad Williams, the Company's Non-Executive Chairman, said, "We are grateful that Dusty has agreed to step into this role. His track record in evaluating mineral deposits and as a corporate executive will be invaluable to Honey Badger as it positions itself for growth in the silver space. Honey Badger has been very active in searching for value-accretive transactions and also preparing for exploration on its prospective existing silver projects while the sentiment in the silver mining sector remains exceptionally weak. We want to be in a position of strength for what we believe will be an inevitable important rise in the price of silver. We look forward to providing news on this front shortly. I have voluntarily agreed to defer 100% of my cash compensation indefinitely until the silver market improves so that Honey Badger can be as financially strong as possible in the interim. We sincerely thank George for his services and wish him the best in his future endeavors."

About Honey Badger Silver Inc.

ON BEHALF OF THE BOARD

Chad Williams, Non-Executive Chairman

For more information please visit our website www.honeybadgersilver.com or contact Ms. Michelle Savella for Investor Relations | msavella@honeybadgersilver.com | +1 (604) 828-5886

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/175402

Anglo American (LON:AAL) First Half 2023 ResultsKey Financial Results

Revenue: US$15.7b (down 14% from 1H 2022).
Net income: US$1.26b (down 66% from 1H 2022).
Profit margin: 8.1% (down from 20% in 1H 2022).
EPS: US$1.04 (down from US$3.03 in 1H 2022).

earnings-and-revenue-growth

All figures shown in the chart above are for the trailing 12 month (TTM) period

Anglo American EPS Misses Expectations

Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 21%.

Looking ahead, revenue is forecast to grow 1.6% p.a. on average during the next 3 years, while revenues in the Metals and Mining industry in the United Kingdom are expected to remain flat.

Performance of the British Metals and Mining industry.

The company's share price is broadly unchanged from a week ago.

Risk Analysis

Before we wrap up, we've discovered 3 warning signs for Anglo American that you should be aware of.

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Barclays (BARC.L)

Banking giant Barclays (BARC.L) posted a first-half profit that was in line with expectations on Thursday, coming in at £4.6bn ($5.95bn). The average analyst forecast came in at £4.5bn.

In the same quarter a year ago pre-tax profits were sitting at £3.7bn.

It announced a share buyback of £750m for Q2 – a number which beat analyst expectations of £575m.

Its consumer and credit card business propped up numbers as it battles with dipping revenues in its investment bank during a down period for corporate dealmaking.

Personal Banking income increased 19% to £2.5bn, driven by higher interest rates, partially offset by factors it called "mortgage margin compression and lower current accounts deposit volumes in line with wider market trends and cost of living pressures."

Shell (SHEL.L)

Energy giant Shell (SHEL.L) has felt the sharp end of falling energy prices in the first half of 2023, as its second quarter profits fell 56% to $5bn (£3.86bn). This missed analysts expectations.

It announced a $3bn share buyback programme – a decrease from its $3.6bn programme in the previous quarter. It increased its quarterly dividend by 15% to $0.331 per share.

It explained that adjusted earnings are lower than in Q1 2023 due to "lower prices and trading & optimisation results."

Most Read from Bloomberg

Nuclear “must be part of the conversation” in Australia, Laura Tyler, chief technical officer at the world’s biggest miner, said in an interview on Wednesday.

“To make sure we have that safe, reliable energy mix, we need to be able to mix it up” with nuclear complementing wind, solar, batteries and other sources of electricity, she said. “Everything needs to be on the table.”

The bulk of BHP’s earnings come from its Australian iron ore and coal mines, but the company also produces uranium, the fuel for nuclear reactors, at its Olympic Dam site in South Australia.

After being shunned due to safety concerns, nuclear energy is enjoying a resurgence in global popularity due to a shortage of natural gas following Russia’s invasion of Ukraine. The need to decarbonize electricity grids and the development of smaller and cheaper reactors is also making it more attractive.

Read More: Global Energy Crisis Spurs a Revival of Nuclear Power in Asia

Australia has never had nuclear power and there’s been a prohibition on its use in place since the 1990s. The Labor government supports the ban, arguing the country’s wealth of renewable resources means it’s not needed.

However, the opposition Liberal-National coalition wants it overturned, on the grounds that wind, solar and batteries can’t provide reliable baseload power to replace coal plants that are being phased out.

BHP aims to get to net zero across its operations by 2050, but warned last week that its emissions might rise in the short term.

Most Read from Bloomberg Businessweek

(Bloomberg) — Iron ore rallied along with copper after Chinese Premier Li Qiang said that growth has picked up this quarter and more stimulus was in store, boosting the outlook for consumption in the biggest metals importer.

Most Read from Bloomberg

China will roll out more practical, effective measures to expand domestic demand and stoke market vitality, Premier Li told the World Economic Forum in Tianjin. Iron ore, used to make steel, surged by almost 4%.

In addition, Mike Henry, head of BHP Group Ltd., the world’s largest miner, urged the Chinese government to provide more help for the housing market, acknowledging recent data had been patchy. “We do think there’s room for a little bit more policy that is supportive,” he told reporters in Brisbane.

Industrial metals rallied at the start of the year as China reopened after Covid Zero was ditched, but the upswing stalled this quarter as manufacturing and the property market disappointed. While the central bank cut policy rates this month to aid the economy, investors expect more steps will follow, although it’s unclear if they’ll be enough to significantly revive growth.

“Once again, unbridled expectations of further stimulatory interventions are running rife,” said Atilla Widnell, managing director at Navigate Commodities Pte, “We fully expect intermittent upside price shocks to emanate from overly optimistic China and iron ore bulls, though bears will likely use this as an opportunity to sell.”

Iron ore traded 3.8% higher at $113.15 a ton in Singapore at 2:17 p.m., while steel futures in China also climbed. On the London Metal Exchange, copper gained 0.9% to $8,466 a ton as aluminum, zinc, lead, tin and nickel all rose more than 1%. For nickel, the day’s gain came after it closed on Monday at the lowest level since July 2022.

Copper’s upside potential was also in focus after an especially bullish, long-term forecast from billionaire Robert Friedland, who said that prices could ultimately rally tenfold as the global mining industry struggled to meet accelerating demand given the energy transition.

Most Read from Bloomberg Businessweek

(Bloomberg) — BHP Group Ltd. Chief Executive Officer Mike Henry has warned too much government intervention in global critical minerals supply chains could undermine efforts to fight climate change.

Most Read from Bloomberg

The boss of the world’s biggest mining company said it was “understandable” that nations were scrambling to secure domestic supply of the metals needed in renewable energy and electric vehicles, but warned against an excessively domestic focus and over-reliance on the “sugar hit” of state-provided subsidies.

“Governments striving to secure their own critical mineral supplies must ensure they don’t undermine the outcome the world needs to achieve – where in fact a combination of pragmatic international cooperation and competition can jointly accelerate the energy transition,” Henry said a conference in Brisbane on Tuesday.

Australia Cautious on Chinese Investment in Vital Lithium Sector

Henry’s warning comes as global competition for minerals such as lithium, nickel, cobalt and rare earths continues to heat up as nations and industry rush to meet ambitious emissions reduction goals. China controls a large chunk of supply chains of these minerals, which has worried the US, Europe and other economies.

The US Inflation Reduction Act, legislated last year, set aside almost $400 billion to subsidize clean energy, and the US has set up partnerships with allies, including key miner Australia, to build critical mineral supply chains that exclude China.

While Henry didn’t explicitly criticize these efforts in his speech, he said any moves to mimic the new law in a smaller country like Australia would be “a losing proposition.”

“What governments here – federal and state – should focus on are those things within their control to make investment fundamentally more attractive,” he said.

Meanwhile, Henry also urged the Chinese government to provide more support for the struggling housing market, which is a major driver of steel demand, acknowledging recent economic data from the nation was “a little patchy.”

China Economy Gloom Worsens With Weak Consumer Spending Data

“We do think there’s room for a little bit more policy that is supportive of housing and housing new starts,” he told reporters after the speech. Still, he remained optimistic about the outlook for steel and iron ore demand, saying: “Our expectation remains that the second half will be stronger than the first.”

(Updates with Henry’s China housing comments from penultimate paragraph)

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Mining’s biggest companies are already using artificial intelligence for a variety of purposes such as improving safety and efficiency. The mineral exploration company, through AI, discovers rare earth metals needed to power electric vehicles (EV). If KoBold is successful over time, this could be a big win for its investors — and for the EV industry.

(Bloomberg) — BHP Group Ltd. is warning its carbon emissions will rise in the short term, with rapid technological advances and industrial collaboration needed if the mining giant is to reach its goal of net zero emissions by 2050.

Most Read from Bloomberg

The world’s biggest miner is on track to meet its target of a 30% reduction in operational emissions by 2030 at a cost of around $4 billion, it said Wednesday. Still, it expects a “near-term increase in emissions from production growth” from current levels, Graham Winkelman, the group’s head of carbon management, said in an investor briefing.

Carbon reduction technologies “must advance quickly from where it is now” and needs to include collaborations “with our vendors and industry,” BHP said in a presentation. The Melbourne-based company’s path to net zero would be “non-linear,” it added, with emissions rising before falling again by the end of the decade.

What It Would Take to Make Steelmaking Greener: QuickTake

The major iron ore, coal and copper producer plans to reduce its operational (Scope 1 and 2) greenhouse gas emissions by at least 30% on 2020 figures by 2030, and reach net zero in those emissions by 2050. Those targets don’t include “Scope 3” emissions, including those from end-users such as steelmakers and other customers.

The admission of short-term increases in emissions from BHP comes even as its environmental targets remain less ambitious than those of its peers. Rio Tinto Group, which is a bigger emitter, aims to reduce its Scope 1 and 2 emissions by 50% by 2030 from a 2018 baseline, while Fortescue Metals Group Ltd. is aiming to reach net zero by that year.

Around 75% of the $4 billion that BHP plans to spend on decarbonization by 2030 will be spent on replacing diesel use in haul trucks. It favors battery-powered haul trucks over hydrogen power because they are more than twice as efficient, Anna Wiley, the vice president of planning and technical in the company’s Australian minerals division, said on the conference call.

‘Dynamic Charging’

BHP will trial “dynamic charging” at its mines in Western Australia and Chile, allowing trucks to be charged while they are still in operation. It said its unfinished Jansen potash mine in Canada, which is due to start producing the fertilizer ingredient in 2026, would use 80% electric haul trucks from day one.

The company’s Australian iron ore mines are not connected to the grid and are powered by purpose-built gas generators. A switch to electric haul trucks will see power demand surge, and BHP plans to build 500 megawatts of renewables and storage to meet growing demand and decarbonize its electricity emissions, it said. It will also explore options for plugging into to a wider regional grid.

BHP’s coal mines in Queensland are the single biggest emitters in its Australian operations, producing almost half its pollution. Around a third of that comes from methane escaping from the coal seams, Wiley said.

It aims to capture about 50% of that methane and use it to generate electricity or sell to third parties, and said it was “exploring” options for the rest, adding that carbon offsets would likely be needed.

Still, of the $4 billion it plans to spend on decarbonization by 2030, BHP allocated a negligible amount to methane, with diesel, electricity and gas emissions the main targets. The company’s Western Australian iron ore division will be the biggest recipient of decarbonization investment between now and 2030, followed by the Escondida copper mine in Chile, it said.

(Updates with haul truck plans in 6th, 7th paragraphs)

Most Read from Bloomberg Businessweek

(Bloomberg) — Woodside Energy Group Ltd. gave the go-ahead for a $7.2 billion oil field off Mexico, the Australian producer’s first major fossil fuel investment since acquiring BHP Group Ltd.’s petroleum business last year.

Most Read from Bloomberg

The Trion oil field, a joint venture with state-owned oil company Petroleos Mexicanos, will be Mexico’s first offshore deepwater oil project, according to Woodside. It has estimated resources of 479 million barrels of oil equivalent, and first production is expected in 2028, the Perth-based company said Tuesday.

Woodside, Australia’s biggest oil and gas producer, has come under intense pressure from activists and shareholders for its fossil fuel expansion plans, but has said new projects are necessary and can be consistent with global emission reduction goals. The company in February said it would review potential acquisitions in the Gulf of Mexico after reporting its highest-ever profit thanks to surging prices and the integration of BHP’s former energy unit.

“We have considered a range of oil demand forecasts and believe Trion can help satisfy the world’s energy requirements,” Chief Executive Officer Meg O’Neill said in a statement, adding two-thirds of the Trion resource was “expected to be produced within the first 10 years after start-up.”

Woodside inherited a 60% stake in Trion from BHP and will invest $4.8 billion in the project, subject to clearance from Pemex and regulatory approval expected in the fourth quarter. The field’s floating production unit will have capacity to produce 100,000 barrels of oil a day.

Woodside is also developing the vast Scarborough gas field off the coast of Western Australia and plans other oil and gas projects. It also intends to invest in clean hydrogen manufacture.

The company has been the subject of numerous shareholder resolutions from climate activists. One of its directors received the lowest support in a decade in April and 49% of shareholders rejected its climate report last year.

Most Read from Bloomberg Businessweek

(Bloomberg) — A total of 19 trains carrying coal to Australia’s flagship export hub for the fuel were disrupted after a protester suspended themselves from two poles over rail tracks.

Part of a rail line in Kooragang, close to the Port of Newcastle in New South Wales state, was halted for more than four hours from 7 a.m. local time Monday, according to the Australian Rail Track Corp., which manages the network.

A 22-year-old woman was arrested at the scene after law enforcement removed the structure from the tracks, New South Wales police said in a statement.

Australia’s status as the world’s No. 2 coal exporter has long been a focus for activists who argue the nation’s sales of the fossil fuel are a key contributor to global emissions. While Prime Minister Anthony Albanese has legislated more ambitious national climate targets, his government has also shown support for a coal sector forecast to generate about A$128 billion ($88 billion) in export earnings this fiscal year.

Blockade Australia’s demonstration at Kooragang was “a response to Australia’s destruction of the climate,” the campaign group said in a message posted to Twitter. Two separate protests also took place Monday near the Port of Melbourne and Port of Brisbane, the organization said.

Newcastle Coal Infrastructure Group, which handles coal exports for producers including BHP Group Ltd., Yancoal Australia Ltd. and Whitehaven Coal Ltd., didn’t immediately respond to a request for comment.

BHP declined as much as 1.1% in Sydney by 1:08 p.m., as Whitehaven fell as much as 3.9% and Yancoal by as much as 2.8%.

More stories like this are available on bloomberg.com

Here are three stocks added to the Zacks Rank #5 (Strong Sell) List today:

Anglo American plc NGLOY is a mining company. The Zacks Consensus Estimate for its current year earnings has been revised 16.8% downward over the last 60 days.

Enerplus Corporation ERF is an oil and gas exploration and development company. The Zacks Consensus Estimate for its current year earnings has been revised 17% downward over the last 60 days.

First Busey Corporation BUSE is a bank holding company for Busey Bank. The Zacks Consensus Estimate for its current year earnings has been revised 9.2% downward over the last 60 days.

View the entire Zacks Rank #5 List.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Enerplus Corporation (ERF) : Free Stock Analysis Report

First Busey Corporation (BUSE) : Free Stock Analysis Report

Anglo American (NGLOY) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

A handful of mining stocks were at the bottom of the FTSE 100 index on Monday as concerns over the prospect of a global economic slowdown continued to weigh on the minds of investors.

Anglo American (AAL.L), Antofagasta (ANTO.L), Fresnillo (FRES.L), Rio Tinto (RIO.L) and Endeavour Mining (EDV.L) were among the companies at the bottom of the basket, at the time of writing, as metal prices remained under pressure due to demand fears.

“A stronger dollar, weakening global manufacturing activity and a weaker-than-expected economic recovery in China have weighed on metals commodities lately, as well as on mining stocks,” Piero Cingari, independent macro analyst, told Yahoo Finance.

“Despite that I’m optimistic about gold miners for the second half of the year. There are many players (one is Newmont (NEM)) trading at heavily discounted valuations compared to the current price of gold. I think the market is awaiting the results of this quarter before reversing the trend,” he added.

Cingari also said he’s “slightly less bullish on copper miners” until there’s more policy stimulus to be seen in China.

Metal prices outlook

The latest slump in mining stocks comes after the World Bank recently projected metal prices to fall by 8% in 2023, and a further 3% in 2024.

It also highlighted in its recent commodities report that the first quarter of this year reflected optimism on a strong China recovery with the bank’s metals and minerals price index rising 10%.

However, it noted how that sentiment changed and most prices receded from their January highs by the end of the quarter.

It said a recovery in production is expected to lower aluminium prices (ALI=F) by 11% in 2023, while copper prices (HG=F) are forecast to fall 4%, compared with last year – and by a further 6% in 2024. Meanwhile, it forecast nickel prices to drop by about 15% in 2023.

“In the longer term, however, the energy transition could significantly lift the demand for some metals, notably lithium, copper, and nickel,” said World Bank lead economist Valerie Mercer-Blackman – and as also recently reported by Yahoo Finance.

Year-to-date performance

Matt Britzman, an equity analyst at Hargreaves Lansdown, shared with Yahoo Finance an overview of how mining stocks have performed for the year-to-date.

“2023 has seen a reversal of fortunes for many of the largest miners in the FTSE 100. The mix of higher interest rates, sticky inflation, and growing concerns about potential recessions across the globe means the prices of key commodities have come down. Earlier in the year, we saw the effect when many of the largest miners reported falling profits at full-year results.

“But it's worth taking a step back and remembering we're coming off the back of a period of booming prices. 2021 and 2022 saw record prices for several key commodities, like copper, iron ore and coal, as global economies came out of lockdown periods and war broke out in Ukraine, sending energy markets into turmoil. The picture has changed, as is the life of a miner, and rising costs along with weaker economic growth have weighed on the sector,” he said.

Britzman also noted how “riding the cycle” is “part and parcel of investing” in a cyclical sector, and said it's more important to focus on the longer-term growth drivers – of which there are many.

“The energy crisis seen over 2022 and a global push toward net-zero by 2050 both support the same message – a need to decarbonise, lower costs, and boost resilience. Reaching those targets means rethinking how we live and work, whilst improving technologies to enable that," he added.

"That means a shift in the demand dynamics for a host of metals needed to expand renewable energy sources, evolving battery technology, and build green infrastructure. There's an opportunity there for a host of companies in the sector."

The analyst also highlighted how the picture for gold (GC=F) has been somewhat different with its price rising over the past 18 months to reach record highs as investors and central banks piled cash into the asset, seen as a safe haven in difficult times.

“That'll be a tailwind for gold miners, and one that's likely to continue over the year as uncertainty looks set to remain,” Britzman concluded.

Watch: Markets in 3 Minutes: Fed and PBOC Matter More Than ECB and BOJ

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