Investing in to the mining sector has both its disadvantages and advantages. Below we explain how best to invest wisely in the mining markets along with 3 of our top picks for 2023, plus a company we advise investors to familiarize themselves with urgently.
Disadvantages
As with any investment made in the financial markets there is always risk involved due to their volatile nature and unpredictability. This in particular has been the case over the past few years with the outbreak of Covid 19 which wiped trillions of Dollars from the world’s stock markets.
When such market losses occur, the companies being traded upon them will also experience comparable losses to their market values.
This has been, and always will be the case, which is why shrewd judgement should be applied when making investments in to these markets.
Advantages
Most, if not all, mining companies are engaged in the production of commodities that are required to sustain the world in which we now live, such as precious metals, non-precious metals, coal, oil, gemstones, lithium, limestone etc.
Because of this, mining related stock investment values are usually less affected by market volatility. This is due to the core materials being mined will protect them from certain influences that are causing the markets to drop.
For example, when market values decline due to geo-political tensions or inflation, investors will turn to gold as a safe-haven investment. Therefore, companies who mine gold will have their market values supported by virtue of this. Similar examples apply to various other reasons why markets may drop but mining companies’ values retain little unchanged.
Managing such investment risk is why many investors will identify a mining investment based on the commodity being mined in conjunction with the current cause of any market volatilities.
OUR 2023 TOP 3 PICKS
BHP Group Ltd. (ticker: BHP)
BHP Group is a diversified resources company and operates fully integrated mining assets that extract and process copper, iron ore, coal, nickel, zinc, and potash. Its mining assets span the globe.
BHP Group combines its low-cost operations with a strong balance sheet, which it strengthens by routinely selling its least-profitable mines and non-core assets.
BHP Group’s cash on hand for the year ending December 31, 2022 was USD $15.476 billion
Freeport-McMoRan Inc. (ticker FCX)
Freeport is an American mining company based in Phoenix, Arizona and is the world's largest producer of molybdenum and is one of the world’s major copper producers.
The mining company’s revenue in the third quarter of 2022 grew 58% year over year to USD $6.08 billion, owing to higher copper prices and increased production.
Freeport-McMoRan Inc’s cash on hand for the year ending December 31, 2022 was USD $8.068 billion
Rio Tinto Limited (ticker RTNTF)
Rio Tinto Limited is the second largest mining company in the world, and is quite different from the other two companies mentioned.
Rio Tinto mines a wide variety of products ranging from iron ore to aluminum, copper, uranium, and even diamonds. Although it does mine gold and copper also, their focus is towards lithium and iron ore mining where the company see the most significant growth potential.
Rio Tinto Limited’s cash on hand for the year ending December 31, 2022 was USD $15.35 billion.
*ONE TO WATCH*
Karbonate Minerals Corp. (ticker TBA)
Karbonate Minerals Corp is a Canadian mining company formed in 1996 and based in Toronto, Canada. It mines precious metals in 7 countries and primarily focuses on its gold mining activities.
The company’s mining methods has established them as one of the sector’s most ethical and environmentally friendly mining operations and they are currently carrying out expasions of 4 of their sites, plus the company’s first European project on the horizon.
Karbonate Minerals Corp. are our ‘One to Watch’ as they are currently engaged in 4 rounds of private placement funding which will result with them being listed on the NYSE later this year whereupon the company’s value, due to their market exposure, is expected to increase significantly over a very short period.
Karbonate Minerals’s cash on hand for the year ending December 31, 2022 was USD $87.911 million.
DISCLAIMER: Today's Mining News is not an investment, legal or tax advisor or a broker/dealer. All investment or financial opinions expressed by Today's Mining News on the website https://www.todaysminingnews.com are from the personal research and/or experience of the site owner and/or its employees and are intended as informational material only. It is important to do your own analysis/research before making any investment based on your own personal circumstances. Today's Mining News recommends that, if needed, you seek independent advice from a registered professional.
