If you’re looking ahead at 2022 thinking about how to play inflation, it may not surprise you that mining has become a bit more popular lately. Generally speaking, when things get volatile or uncertain in the stock market, safe havens like precious metals start to shine brighter. But as other industries have evolved, so has mining, and it isn’t only about the latest gold or silver deposits at some undiscovered location.
The rise of the electric vehicle industry has opened a seat at the table for things like lithium and antimony. Meanwhile, alternative energy trends have placed a spotlight on uranium and graphite. Of course, you’ve got your precious metals that aren’t going away anytime soon, so, yes, gold and silver are still in the picture. However, my point is that when it comes to the best mining stocks for the new year, it may not be what the masses might assume.
In today’s article, we’ll look at a handful of mining stocks to watch for January. You’ll see some of the overreaching industry trends and gain a better understanding of what this traditionally “boring” industry may have in store for an exciting new year.
Best Mining Stocks To Watch For January 2022
|Company||Current Share Price|
|Freeport-McMoRan Inc. (NYSE: FCX)||$41.83|
|MP Materials Corp. (NYSE: MP)||$45.63|
|Lithium Americas Corp. (NYSE: LAC)||$29.67|
Freeport has successfully extended its reach across continents and industries as an international mining company. It has built a diversified asset base of copper, gold, and molybdenum reserves. With the significant rise of interest in electric vehicle manufacturing, copper has been in high demand. That’s because EVs typically use twice as much copper as internal combustion engines.
FCX stock could be one of the top mining stocks to watch next year if you’re betting big on EVs. The company produces more than 1 billion pounds of copper annually in the US. In its last quarterly report, the company also said that the market outlook for the metal is “extraordinarily positive.”
Aside from beating expected profit figures, Freeport also announced an up to $3 billion share repurchase program and declared quarterly dividends for 2022 of $0.15 per share. “With the recent achievement of our net debt target, strong execution of operating plans, and favorable market conditions for our products, we are pleased to commence implementation of our performance-based payout framework,” said Chairman and Chief Executive Officer Richard Adkerson in comments back in November.
FCX Stock Forecast
As far as analysts are concerned, the outlook appears bullish based on price targets. Over the last few weeks, Wolfe Research, Stifel, and Morgan Stanley set price targets of $47, $48, and $34 respectively. Though Morgan Stanley’s target is lower than current trading levels, this was issued as an increase to its former PT.
MP Materials Corp.
Another hot area of the mining industry is rare earth materials. For use in everything from semiconductors to photovoltaic cells, these materials include some of the more exotic metals that most haven’t likely heard of. Neodymium, Yttrium, Cerium, Terbium, Scandium, Erbium; these are just a few to name. MP has put a particular focus on neodymium-praseodymium oxide. This is a major ingredient in high-strength magnets. Where would these be used? High-strength magnets are used in many different applications. For electric vehicles specifically, you may find them in motors, pumps, power mirrors and seats, drivetrains, and even steering wheels.
In fact, to this exact point, MP recently inked a deal to build a U.S. magnet factory and enter a long-term agreement with General Motors (NYSE: GM). The Deal with GM will see MP supply U.S.-sourced and manufactured rare earth alloy and magnets for powering more than a dozen models. These models will also use the GM Ultium battery platform.
“MP Materials has built an exceptional magnetics team and important commercial relationships that will accelerate our mission to restore the full rare earth supply chain to the United States,” said MP Materials Chairman & CEO James Litinsky in a December 9 press release. “This is a momentous occasion for the reshoring of the American supply chain, and we are grateful for GM’s confidence, commitment, and leadership.”
MP Stock Forecast
If you’re looking for where to set your expectations, recent analyst coverage might help. Right now, Jefferies and BofA Securities have set lofty targets. The two firms have Buy ratings on the stock and targets of $55 and $52, respectively.
Lithium Americas Corp.
Lithium Americas is one of the top-performing stocks on this list. Year-to-date, shares of LAC stock are up more than 120%, thanks to a surge of EV interest. The company’s unique positioning in North and South America has allowed it to capitalize on surging demand for lithium. While it is still considered a development stage company, LAC is far from its former penny stock make-up. It may be hard to imagine, but at one point in 2020, shares traded as low as $1.92.
EV demand has given rise to growing interest in the entire supply chain with raw materials included. Right now, Lithium Americas is advancing two projects: the Cauchari-Olaroz project in Jujuy, Argentina, and Thacker Pass project in Nevada, U.S. Furthermore, with the November acquisition of Millennial Lithium, a complementary brine project now comes into the picture. Since this deal is expected to close in January, that may be another potential catalyst to keep track of.
LAC Stock Forecast
Heading into 2022, analysts are bullish on LAC stock. Most recently, Piper Sandler and B. Riley adjusted their price targets. In addition to their Neutral and Buy rating, the firms lifted targets to $32 and $44 from $22 and $25 respectively.
Best Mining Stocks To Watch For 2022
With inflation captivating headlines and rate increases prompting caution for next year, mining stocks have come back into focus. Where precious metals may have their time to shine as a hedge, progress is being made elsewhere. This could give rise to an entirely new niche of the industry to capitalize on.
Midam Ventures, LLC | (305) 928-8939 | 1501 Venera Ave, Coral Gables, FL 33146 | email@example.com