Editor’s Note
Mining stocks are inherently cyclical, moving with broader economic tides. While this volatility presents risks, leading companies like Rio Tinto, BHP, and Barrick Gold—which prioritize operational efficiency—can offer investors a potential blend of dividend income and long-term growth.
Mining stocks are cyclical, with demand and prices fluctuating with the economic cycle.
Key mining stocks include Rio Tinto, BHP Group, and Barrick Mining, focusing on low-cost, efficient operations.
Investing in top mining companies can offer dividends and growth, despite industry volatility.
Mining stocks are publicly traded companies that find, extract, and process the raw materials that power the global economy. These materials range from precious metals like gold, silver, platinum, and palladium to industrial metals such as copper, iron ore, aluminum, and nickel. The mining industry also produces construction materials, energy resources, and key agricultural inputs like fertilizers.
Because these resources are essential for building products, infrastructure, and technology, demand tends to rise when the economy is growing, pushing prices higher. But mining is a cyclical business. When economic activity slows, demand for raw materials often falls, and mining stocks can decline sharply.
That cyclicality makes stock selection especially important. Investors need to focus on mining companies with the financial strength and asset quality to weather downturns and benefit from long-term demand. Here’s a closer look at how mining stocks work and which ones stand out today.
Barrick Mining (B +5.68%) is one of the largest gold miners in the world, with operations in 18 countries. It’s also a leading copper producer.
One thing that sets Barrick apart from other mining companies is its focus on Tier One mining assets. It defines a Tier One mine as one that:
Produces more than 500,000 ounces per year.
Has at least 10 years of productive life remaining.
Delivers total cash costs per ounce in the lower half of the industry cost curve.
Tier One mines produce a relatively steady supply of low-cost gold and copper, enabling Barrick to continue making money when prices are low.
Barrick’s Tier One mines can generate lots of cash, allowing it to pay an attractive base dividend payment. It complements that base payout with a quarterly performance dividend payment that fluctuates with its cash balance.
It also invests money to explore and develop new mines and expand existing ones to grow its production. Those projects have Barrick on track to grow its gold-equivalent production 30% by the end of the decade.
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Freeport-McMoRan is one of the world’s leading copper producers. It has mines in Indonesia, South America, and the U.S. Its mines also produce gold and molybdenum, a mineral primarily used to strengthen steel.
The company is investing heavily to expand its copper business. It’s spending more than $1 billion to develop and implement new leaching technologies to maximize the recoveries at its existing mines. Freeport is also working towards a potential $3.5 billion project to expand its Bagdad mine in Arizona. The company is also evaluating potential large-scale expansions of its Lone Star (Arizona), El Abra (Chile), and Grasberg (Indonesia) mines.
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Anyone can invest in mining stocks. Here’s a step-by-step guide on how to add one to your portfolio:
Open your brokerage app
