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Highlights
- Mining giants listed on the LSE are losing value after the signing of the COP26 agreement this year at Glasgow, which pledged to phase out of coal.
- Shares of several mining giants such as Evraz, BHP, Antofagasta, and Anglo American fell.
- The decision of the BoE Governor to keep interest rates low despite high inflation also impacted the market.
Fossil fuels are the focal point of the climate crises and coal has been a major point of concern. No new coal-fired power plants should be built and at least 40% of the existing 8,500 plants should be shut down by 2030 to achieve the 1.5C goal, this was discussed at the COP26 UN Climate Change Conference hosted by the UK in Glasgow.
With a stark future ahead, coal is losing its importance, and thus mining stocks are being abandoned by investors. On the first day of trading on the LSE (Monday) since the signing of the COP26 agreement, several mining giants such as Evraz, BHP, Antofagasta, and Anglo American, saw a decline in their value. In contrast to the falling FTSE100 index, the French Cac and the German Dax went up.
Why are investors dumping mining stocks?
Apart from the talks at the COP26, the comments of Bank of England Governor Andrew Bailey also impacted the market due to his decision of maintaining record low interest rates even though inflation is touching record highs. The interest rates are expected to rise in December, and due to already being factored in the current price, the UK markets won’t be impacted much.
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Let’s briefly take a look at some of the affected UK mining stocks.
Evraz plc (LON: EVR)
Evraz plc is a multinational steel making and mining company. The current market cap of the FTSE-100 listed company stands at £8,798.82 million and it has given a return of 62.47% in 1 year. Its 5-year average dividend yield is 10.7%. Evraz plc’s shares were trading at GBX 601.80 at 9:24 AM 16 November 2021 (GMT).
BHP Group PLC (LON: BHP)
BHP Group PLC produces iron ore, copper, and nickel. The current market cap stands of the FTSE100-listed company stands at £40,623.59 million and it has given a return of 18.13% in 1 year. Its 5-year average dividend yield is 5.3%. BHP Group PLC’s shares were trading at GBX 1,926.20 at 9:26 AM 16 November 2021 (GMT).
Rio Tinto plc (LON: RIO)
Rio Tinto plc is the second-largest metals and mining corporation after BHP. The current market cap of the FTSE-100 listed company stands at £56,335.49 million and it has given a negative return of 4.83% in 1 year. Its 5-year average dividend yield is 5.6%. Rio Tinto plc’s shares were trading at GBX 4,505.50 at 9:30 AM 16 November 2021 (GMT).
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Antofagasta plc (LON: ANTO)
Antofagasta plc is a Chilean-based copper mining group, which is mainly involved in transport. The current market cap of the FTSE-100 listed company stands at £14,393.51 million and it has given a return of 28.55% in 1 year. Its 5-year average dividend yield is 2.7%. Antofagasta plc’s shares were trading at GBX 1,445.50 at 9:36 AM 16 November 2021 (GMT).
Anglo American plc (LON: AAL)
Anglo American plc is a UK-based mining company contributing to 40% of the global platinum production. It also produced iron ore, copper, nickel etc. The current market cap of the FTSE-100 listed company stands at £38,434.20 million and it has given a return of 36.99% in 1 year. Its 5-year average dividend yield is 3.4%. Anglo American plc’s shares were trading at GBX 2,868.00 at 9:42 AM 16 November 2021 (GMT).
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