3 nickel and zinc stocks you can start accumulating now

Highlights

• The US Geological Survey (USGS) has proposed the inclusion of base metals like nickel and zinc on the United States’ critical minerals list.
• The inclusion of these base metals might prove positive for the mining companies as the US government would always want to keep sufficient reserves of these metals.

The US Geological Survey (USGS) has proposed the inclusion of base metals like nickel and zinc on the United States’ critical minerals list. The list has a total of 50 base and precious metals, and it uses a different methodology to determine which minerals and metals are very important for the US economy.

Nickel is on the critical mineral list because the US imports over half of its annual nickel consumption. Moreover, nickel is one of the key components in electric vehicle batteries, which has boosted its domestic demand. In addition, the domestic nickel production is limited with only one operating mine in Michigan, which can lead to single point domestic supply failure. This combination of factors has led to nickel being included in the critical list.

3 nickel and zinc stocks you can start accumulating now

The base metal zine was on the list as well, as the US is dependent on imports for its domestic consumption. The US imported 710,000 tonnes of zinc representing 83% of domestic consumption. The global supply chain disruption and increased production from China has led to its inclusion in the list.

The inclusion of these base metals might prove positive for the mining companies as the US government would always want to keep sufficient reserves of these metals either by importing or boosting domestic production to avoid any catastrophic events.

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Let us look at three FTSE listed mining stocks that operate in nickel and zinc extraction along with other industrial metals:

Glencore Plc (LON: GLEN)

The company operates as a diversified metal and mining company producing different industrial metals from its various mining sites worldwide. In the nine months to 30 September 2021, the company reported zine production of 855,800 tonnes which was in line with the 2020 comparable period. It is planning to ramp up the production at Zhairem mine, which will further boost the zinc production. Nickel production was at 71,100 tonnes, which was lower by 13% than 2020 because of planned maintenance at Murrin mine and certain operating issues at Koniambo mine. However, the company has kept its full-year production guidance unchanged.

Glencore Plc’s current market cap is £47,942.1 million, while its current dividend yield stands at 2.8% as of 16 November 2021.

BHP Group Plc (LON: BHP)

The company does the exploration and production of various industrial metals like copper, iron ore, nickel, and other metals. It also operates in the petroleum and coal production business. The company reported nickel production of 17.8 kt for the quarter ended 30 September 2021 and has kept its full-year production guidance unchanged at 85-95 kt. The quarterly production volume was lower due to planned maintenance activity across its different mines. The company also does the production of other metals and has kept its full-year production guidance unchanged.

BHP Group Plc’s current market cap is £40,623.5 million, while its current dividend yield stands at 11.3% as of 16 November 2021.

Fresnillo Plc (LON: FRES)

FTSE100 listed company does exploration and production of gold, silver, zinc, and other metals. The company reported 44,736 tonnes of zinc production in the first nine months of 2021, which was in line with previous guidance. In addition, higher prices of precious and base metals in the international market continue to benefit the metal and mining-related companies in terms of revenue and profitability.

Fresnillo Plc’s current market cap is £7,087.4 million, while its current dividend yield stands at 2.6% as of 16 November 2021.