It is “new year, new me” in the broader sense when it comes to mining stocks. Most traders consider “mining” as an old industry. Things like precious metals, gold, silver, etc.; the “boring” metals that hedge against inflation is usually somewhere on the list. However, mining could be getting a facelift going into the new year.
Mining Stocks 30-Second Overview
- 2022 could bring an entirely new meaning to the idea of mining stocks
- While precious metals may still be one hedge against inflation, it isn’t the only place investors are looking
- Energy metals and rare earths have also come into focus as global economies reopen and redo their infrastructure
- Today we look at a few mining stocks to watch for January
This “facelift” has everything to do with overhanging trends persisting from 2021. Namely, reopening trends will have energy metals and rare earths in focus. Whether it’s the latest photovoltaic panels used for new solar farms or zeolite becoming the newest energy metals looked at by EV companies, there are likely some new areas of interest when it comes to mining stocks. Today we’ll look at a few hot names to watch heading into the first month of 2022.
Mining Stocks To Watch Right Now
1. Lithium Americas (NYSE: LAC)
The title said it all today. Lithium stocks, electric vehicle stocks, and many renewable energy stocks have been on fire recently. Lithium Americas is right in the middle of this surge. Since mid-December, LAC stock has managed to climb from around $27 to highs this week of over $31, boosted by more excitement in companies like Tesla (NASDAQ: TSLA) and Rivian (NASDAQ: RIVN) making headlines over the last few weeks.
Starting the year, Tesla hit the ground running this year after reporting better than expected production numbers for the fourth quarter in 2021. The company said it produced over 13,100 units of its Model S/X and more than 292,700 of its Model 3/Y. The biggest win was with 3/Y production coming in much higher than 2020’s Q4 figures of just 163,660 units. In total, production increased to more than 305,000 vehicles for the quarter, which was significantly higher than that of 2020’s 179,757.
With that, it’s no wonder why lithium stocks are a focus right now. Lithium Americas, specifically, the company is advancing two projects. These include its Cauchari-Olaroz project in Jujuy, Argentina, and Thacker Pass project in Nevada, U.S. In addition to this, its acquisition of Millennial Lithium in November brings a complementary brine project onto its portfolio. Since this deal is expected to close this month, that may be another potential catalyst to keep track of.
2. MP Materials (NYSE: MP)
Ever heard of Neodymium, Yttrium, Cerium, Terbium, Scandium, or Erbium? These are just a few that fall into the “rare earths” mining category. MP Materials focuses on neodymium-praseodymium oxide. It’s a major ingredient in high-strength magnets used in many different applications, specifically electric vehicles. Motors, pumps, power mirrors, seats, drivetrains, and even steering wheels might use these magnets.
The company recently signed a deal to construct a U.S. magnet factory. In addition, MP will enter a long-term agreement with General Motors (NYSE: GM) to supply U.S.-sourced and manufactured rare earth alloy and magnets for powering more than a dozen models. These models use the GM Ultium battery platform.
MP Materials Chairman & CEO James Litinsky, in a December 9 press release, said, “This is a momentous occasion for the reshoring of the American supply chain, and we are grateful for GM’s confidence, commitment, and leadership.”
Looking ahead, the company is scheduled to present at the Morgan Stanley Auto 2.0 Conference this week. So if MP stock is on your list right now, keep January 5th in mind. MP participates in a panel discussion starting at 10:30 AM ET.
3. Allegheny Technologies Inc. (NYSE: ATI)
Allegheny is another one of the mining stocks gaining ground over the last few weeks. Ever since reaching 52-week lows of $13.85 at the end of November, the stock has managed to bounce back strongly. Allegheny specializes in high-performance materials, including metals used in aerospace, defense, and automotive and electrical energy.
The company is coming off of a banner third quarter, as Allegheny experienced strong growth based on these most recent performance results. The latest saw sales jump to $726 million and net income attributable to ATI of $48.7 million. These sales were an increase of 18% compared to Q2 2021.
“Our Specialty Rolled Products business accelerated its production rates to pre-strike levels to take advantage of strong demand and favorable pricing in most end-markets, especially energy and industrial applications…Showing ongoing signs of recovery, commercial aerospace continues to expand unevenly across our product portfolio. Jet engine forgings demand remained strong, bolstered by our 2021 share gains. Demand for our jet engine specialty materials was mixed, varying by customer and product largely due to uneven supply chain inventory levels and customer order patterns,” said Robert S. Wetherbee, Board Chair, President, and CEO.
Going into 2022, analysts at KeyBanc and Wolfe Research set price targets at $21 and $18, respectively.
“New” Mining Stocks To Watch For 2022
We’re not just talking about precious metals anymore. The go-to for some seasoned investors has typically been gold or silver. But with the advent of electric vehicles, renewable and alternative energy, and carbon neutralization initiatives, other mining opportunities are coming to light.
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