7 Best Mining Stocks : The shift in energy production and transportation away from fossil fuels and towards less carbon-intensive methods will not be possible without “green metals.”
Lithium, copper, nickel, cobalt, iron, and rare-earth elements are among the metals that are used in wind and solar farms in order to transmit the electricity generated there to the electrical grid. They are also utilised in the batteries of electric cars and as a means of storing energy for times when the sun or wind aren’t present.
“Minerals are essential components in many of today’s rapidly growing clean energy technologies, from wind turbines and electricity networks to electric vehicles,” according to the International Energy Agency. “Demand for these minerals will grow quickly as clean energy transitions gather pace.”
The need isn’t solely driven by the increase in electric car and low-carbon energy production facilities being built worldwide. Additionally, compared to conventional internal combustion engines or the generation of electricity from coal or natural gas, these uses demand a greater quantity of these metals.
According to McKinsey & Co., demand is predicted to exceed supply for the majority of energy transition materials by 2030. “Across a range of minerals and rare earth metals … supply is dwarfed by the collective demand from the energy transition and other uses,” said the firm.
The rising demand for green metals will be a boon for producers. The following list of seven mining companies, along with their year-to-date performance and dividend yields, will be significant players in the energy transition:
Exxon Mobil Corp. (XOM)
Putting an oil and gas production behemoth at the top of the list may seem strange, but Exxon Mobil is venturing into lithium mining. Lithium is a vital metal for grid-level and electric vehicle batteries, and it’s one of the green metals that will likely become scarce in the near future.
This month, the company announced its intention to extract lithium-rich saltwater beneath southwest Arkansas through oil and gas drilling techniques. The metal will subsequently be extracted from the brine and processed into material suitable for batteries.
The company says it is exploring growth opportunities in lithium globally and plans to start production in 2027. It plans to produce enough lithium by 2030 to fuel a million electric cars annually.
Naturally, the company is not giving up on the fossil fuel industry. It recently announced a massive acquisition of West Texas fracking giant Pioneer Natural Resources Co. (PXD) and began production at a third project offshore from Guyana.
The business is also well-funded to invest in energy transition technologies like green hydrogen and carbon capture and storage. The company is undoubtedly going to be involved in the energy transition, especially in light of its ambitions regarding lithium.
Livent Corp. (LTHM)
This company may be of interest to investors seeking a more pure play on lithium, given the rising global demand for the metal and the growing production of electric vehicles.
In addition to producing lithium hydroxide, carbonate, and chloride, it has a six-year supply agreement with General Motors Co. (GM) that will begin in 2025. Additionally, Livent has an 11-year contract with Ford Motor Co. (F) to supply lithium hydroxide.
The business is joining forces with Allkem Ltd. (OTC: OROCF), which operates a hard-rock lithium operation in Australia, a lithium hydroxide conversion facility in Japan, and lithium brine operations in Argentina.
Livent recently announced that Arcadium Lithium, the combined group’s holding company, has received all required regulatory approvals for the merger. Livent and Allkem plan to close the deal in January.
Fortescue Metals Group Ltd. (OTC: FSUGY)
Producing iron ore, this Australian business is well-positioned to meet the essential demands of the energy transition.
Iron ore is a vital component of steel, which wind farms need a lot of. The towers that hold up the blades and nacelles that transform blowing air into electricity are mostly made of steel. This is particularly true for wind farms that are offshore, as their turbines are much larger than those that are on land.
The United States, which has long been a pioneer in onshore wind energy, is only now entering the offshore fray, opening up a new market for steel used in offshore wind farms. Even though Fortescue sells the majority of its iron ore to China, producers of iron ore benefit from any development that raises the demand for steel globally.
Steel is also utilised in electrolyzers, which produce “green hydrogen” when they run on renewable energy and convert water into oxygen and hydrogen. These electrolyzers are found in electric cars.
By 2030, Fortescue plans to have transformed into a business that can generate enough green hydrogen and other resources to completely remove carbon from its operations. Fortescue will be able to start selling green hydrogen as a result of the transition, adding another revenue stream that might act as a buffer against fluctuating iron ore prices.
The steel industry, one of the sectors where reducing greenhouse gas emissions is more difficult than in the automotive or technology sectors, will use green hydrogen more and more. Carbon emissions can be decreased by using hydrogen instead of coal when making steel. Also, if that
Although the changes will cost the company billions of dollars, Fortescue may end up becoming a major producer of green hydrogen and iron ore, two ingredients used in the production of steel.
Hydrogen has the potential to reduce the company’s fuel costs and set it apart from mining rivals in the eyes of environmental, social, and governance, or ESG, investors. Additionally, shareholders may gain if the company decides to spin off its green hydrogen business in the future.
Vale SA (VALE)
Being the largest producer of iron ore in the world gives Vale an advantage over other companies in the steel industry during the energy transition. However, it also yields cobalt, nickel, and copper, all of which are essential for the world to lessen its dependency on fossil fuels.
Despite iron ore being its primary source of income, the company is also one of the world’s largest producers of nickel. Apart from its application in stainless steel, nickel finds its way into electric cars, energy storage systems, wind farms, and solar farms.
Vale invested close to $300 million in expanding and maintaining its nickel operations during the third quarter. Its nickel segment generated more than $1 billion in net operating revenues during the quarter, second only to its iron operating revenues.
Glencore PLC (OTC: GLNCY)
Cobalt, which can withstand extremely high temperatures, is used to make the batteries that power our phones, tablets, and laptops and store solar energy. It is also spearheading the electric vehicle revolution and the use of renewable energy.”
That’s what the Glencore website says. The business must be aware. It is the largest mining company in the world for cobalt. Nearly 44,000 metric tonnes of the metal were produced by the company from its own mines last year, an increase of 40% over 2021.
The marketing, or trading, division of Glencore procures commodities from other businesses and distributes them to clients worldwide. Glencore is a significant player because it also mines copper, one of the metals most widely required for the energy transition.
Freeport-McMoRan Inc. (FCX)
Copper is one of the most significant metals involved in the energy transition.
It connects renewable energy projects to the grid and upgrades it to a more distributed model instead of one that depends on centralised power plants. It is utilised in solar and wind farms. It’s essential for electric cars as well.
One of the biggest producers of molybdenum and copper in the world, Freeport-McMoRan is also a major player in the energy transition. Molybdenum is used in nuclear power, wind and solar energy, carbon capture and storage, and steel alloying.
The company produced over one billion pounds of copper in the third quarter, averaging $3.80 per pound, which is an increase from $3.50 per pound in the same period in 2022.
MP Materials Corp. (MP)
Numerous devices, including TVs, LED lights, and smartphones, use the 17 rare-earth elements. These components are essential to the country’s shift to an environmentally friendly economy because they are also utilised in wind turbines and electric cars.
Providing around 15% of the world’s rare-earth supply, MP Materials claims to be the biggest manufacturer of rare-earth materials in the Western Hemisphere.
The company claims that MP Materials produced the most rare-earth oxides in concentrate in U.S. history last year, producing close to 43,000 metric tonnes of the oxides. In addition, it sold a record 43,198 metric tonnes of oxides, bringing in a record $527.5 million in revenue—a 59% increase over the previous year.
Within four years, the company hopes to increase oxide production by 50% with what CEO James Litinsky describes as a “modest incremental investment.”