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Summary
- Mining stocks have delivered decent returns as they leveraged upon rising commodity prices, remained unfazed by Covid-19 disruption.
- Most countries might implement expansion plans on their path to recovery. This consequently would provide an overall boost to the mining sector.
Almost every commercial product that we use today is made up of elements that are extracted from the earth. Hence, mining is considered as the utmost important industry. Also, it is crucial to know that mining is a risky business and exploitation of mineral resources could have a major impact on the environment.
Mining groups are exposed to geopolitical risks with respect to key operation assets along with volatility in commodity pricing. Another major challenge that the mining companies come across is in finding lucrative geological areas to stake a claim. Also, it takes a lot of capital investment, time, and legal compliance to develop an asset for mining operations.
A lot of commodities are now a part of the global supply chain. The pandemic has weighed down heavily on the global economy. Most countries might implement expansion plans on their path to recovery. This consequently would provide an overall boost to the mining sector.
In this article, we would put our lens through some mining stocks which have sound potential and plans for 2021.
Also read: How is ESG impacting mining companies?
Copyright © 2021 Kalkine Media Pty Ltd.
- Jubilee Metals Group Plc (LON:JLP)
Despite the challenges of the COVID-19 pandemic, the AIM-listed metal processing company Jubilee Metals Group exceeded the management’s expectations by delivering tremendous operational growth during the H2 2020. The mining company delivered a 123 per cent increase in its PGM and chrome earnings during H2, outperforming its strong growth trajectory in H1 2020.
Jubilee has secured more than 288 million tonnes of copper and cobalt in Zambia to strengthen its asset base. Over the course of the next few years, Jubilee is expected to expand its overall Copper capacity to 25 000 tonnes per year. The miner is also expected to target other geographical areas and metals.
In the past one year, JLP shares have delivered a staggering return of 286 per cent. Shares of JLP traded at GBX 15.60 on 19 February 2021 at GMT 10:36 AM+1.
- Sylvania Platinum Ltd (LON:SLP)
PGMs (platinum group metals) miner Sylvania Platinum has delivered a strong performance in the second quarter of FY2021, with record net revenue and higher net profit. During the second quarter of 2021, the Company reported higher net revenue of $43.7 million (Q1 FY2021: $41.5 million), along with a higher net profit of $20.3 million (Q1 FY2021: $20.1 million).
Sylvania Platinum has delivered a solid performance during the second quarter of 2021 and is on track to achieve a set production target of around 70,000 ounces for FY2021. The company’s operations were not materially impacted by the Covid-19 pandemic.
In the past one year, SLP shares have nearly doubled the investor’s money, delivered a double-digit return of 96 per cent. Shares of SLP traded at GBX 117.50 on 19 February 2021 at GMT 10:50 AM+1.
Also read: Bacanora Lithium Raises $62 Million For Mexico Project
- Rio Tinto Plc (LON: RIO)
Rio Tinto specialises in iron ore, aluminum, copper mining. For the FY2020, the company delivered a strong operational performance in the Pilbara, reflecting strong demand from Chinese Market. The sales revenue for the period increased to $44,611 million in 2020. Driven by higher prices, the underlying EBITDA increased by 13 per cent, and net cash generated from operating activities was up by 6 per cent year-on-year in 2020.
Rio Tinto has shown great resilience, with a strong focus on capital discipline and value over volume approach. In FY2020, the strong commodity prices helped the Company to deliver strong ROCE (Return on Capital Employed) and adjusted EBITDA. Rio Tinto maintained its five-year pay-out track record and has approved a total dividend of 557 cents. RIO has increased focus on project development, strengthening ESG credentials and operational excellence.
In the past one year, RIO shares have delivered a double-digit return of 48 per cent. Shares of RIO traded at GBX 6,266 on 19 February 2021 at GMT 11:12 AM+1.
