Zacks
The Zacks Analyst Blog Highlights Glencore, Teck Resources, Sibanye Gold, Alpha Metallurgical Resources and Taseko Mines
Zacks Equity Research
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For Immediate Release

Chicago, IL – April 21, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Glencore plc GLNCY, Teck Resources Ltd. TECK, Sibanye Gold Ltd. SBSW, Alpha Metallurgical Resources, Inc. AMR and Taseko Mines Ltd. TGB.

Here are highlights from Wednesday’s Analyst Blog:

Time to Dig for Mining Stocks?

Mining stocks have come into focus of late because of the war in Ukraine and sanctions on Russia that are limiting the normal flow of minerals around the world. That's particularly true because Russia is a big exporter.

But mining is generally not considered to be a high-growth sector. In fact, it is a major pollutant, which is why governments across the world are taking policy decisions to curtail output, or at least setting and implementing sustainability goals.

The main issue with mining is the amount of energy (mainly fossil fuels) it uses, which has a huge environmental impact. This is made worse by the fact that good deposits with significant ore availability are getting harder to find. When the ore is not available in sufficient quantities, miners require even more energy to extract it.

The growing costs of mining, when coupled with the high cost of equipment, often makes the extraction of such ores unviable. Only things like precious metals and rare earths may be worth extracting because they fetch a very high price and are therefore able to absorb higher costs.

Precious metals like gold, silver and platinum are often treated as a safe haven for investors in uncertain economic situations such as now. The Fed is focused on lowering inflation, which is being exacerbated by a number of factors including a still-hot housing market, supply chain disruptions, constraints in semiconductor supply, a very tight labor market and still-high amounts of cash that entered the economy via the Fed's rescue plan for COVID 19.

This is being achieved through monetary policy, mainly interest rate increases. But there's also the fear that a sharp response from the Fed could trigger a recession, and this is the main factor driving demand for precious metals right now. And as always, the increased demand from investors is pushing up prices.

As far as rare earths are concerned, they are essential for technological progress, including toward a greener future. Some of the latest technology uses these substances in significant quantities. But rare earths, as the name indicates, are hard to extract because they occur in traces. Moreover, they aren't available at all in many places. So there's a global drive (led by China) to secure the sources of these materials.

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