The Mining Industry Sees Big Gains
Recovering From the Pandemic
Many industries are still reeling from pandemic-related setbacks, but the mining industry seems to be a leader on the road to recovery.
The world’s largest mining companies control the production of copper, platinum, iron ore, and other resources. Most of these miners do not have substantial amounts of debt, and are focusing on paying out cash to shareholders instead of investing in high risk projects or takeovers.
Dividend Payouts and Positive Earnings
BHP (BHP), the world’s largest mining company, has recently seen its profits hit a seven-year high. The British-Australian company announced yesterday that it will pay dividends of $5.1 billion. Glencore , another mining titan, announced recently that it will reinstate its dividends with a $1.6 billion payout.
Investors are cheering news of dividend payouts and positive earnings reports. As a result, mining shares are on the rise.
Looking Ahead
Prices for a number of natural resources are surging. The price of iron ore, which is used to make steel, has climbed by 85% over the past year. Similarly the price of copper, which is an important component of electronic devices and household appliances, has spiked by 80% compared to March lows.
China’s economy is recovering from the pandemic and Chinese demand for metals is rising. Analysts expect that there will be significant government spending on infrastructure in the US, Europe, and other parts of the world as governments work to help their economies regain strength. This spending will likely cause demand for natural resources to rise even more.
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