Best Mining Stocks to Buy

Mining Stocks

The job of mining companies is to find, extract, and process deposits of valuable minerals and materials such as:

• Gold, silver, platinum, and palladium.
• Industrial metals like iron ore, copper, aluminum, nickel, lithium, cobalt, and zinc.
• Construction materials such as sand, crushed stone, and limestone.
• Energy materials, including coal, oil sands (bitumen), and uranium.
• Fertilizers like boron, potash, and phosphate.

Here is the list of top mining companies.

1. Barrick Gold

Barrick Gold is one of the largest gold miners in the world, which is in operations in more than a dozen countries. It's also a leading copper producer.

Barrick Gold is different from other precious metals companies in its focus on Tier One mining assets as:

• Produces more than 500,000/year.
• Has a minimum of 10 years of productive life remaining.
• Provides total cash costs per ounce in the lower half of the industry cost curve.

Tier One mines continue producing a relatively steady supply of low-cost gold and copper. This helps Barrick to continue making money when prices are low.

2. BHP Group BHP Group is a diversified resources company. It operates mining assets that extract and process ore, with a focus on copper, iron ore, coal, nickel, zinc, and potash.

BHP also has a stronghold in the petroleum business that produces, although it’s getting out of the fossil fuel business. The company is expanding its coal interests, and its oil business is merging with Woodside Petroleum in a deal that should close in 2022. After the merger BHP will transform into a pure-play mining company.

While BHP Group produces several commodities, it primarily aims in being a low-cost producer. It does that by efficiently operating large mines and using technology such as autonomous vehicles to reduce costs. The mining company's focus on minimizing expenses also helps to shut down the impact.

3. Rio Tinto Rio Tinto is also a diversified mining company. It is a leading producer of the three most-consumed industrial metals -- iron ore, aluminum, and copper. Rio Tinto also mines a variety of other metals and minerals, including boron, salt, diamonds, and titanium.

Like BHP Group, even Rio Tinto aims to be a low-cost producer of metals and minerals. It's able to keep low costs by operating mining assets that are integrated and large-scale. Rio Tinto's investments in new technologies, such as autonomous vehicles, lower costs and increase productivity.

Rio Tinto has proven its ability to earn even during weak market conditions. It has a strong balance sheet and routinely sells non-core mines to make cash for better opportunities. For example, it offered to buy the outstanding shares of copper miner Turquoise Hill Resources) that it didn’t already own in 2022. The company regularly expands its best mines and aggressively repays the debt. Rio Tinto is another mining company that pays dividends to shareholders and repurchases their shares throughout the economic cycle.

Should you buy mining stocks?

Mining companies have sufficient money to invest in new mines and expansion projects during periods of economic expansion. However, the long lead times required to finish projects often cause problems for mining companies. Projects developed during high times usually don’t come online until after the cycle changes, which affects returns.

Investors in mining stocks should also pay to look up to the amount of carried by a mining company. Companies with more debt often struggle during economic downturns, while companies with low production costs give more profit and are least likely to rely heavily on debt to fund growth.

Investors should play safely and focus on the top mining companies. They have proven that they can generate profit regardless of economic conditions.