BHP: 3 Mining Companies Extracting Profits From Green Metals

The shift to renewable energy and Electric Vehicles (EVs) has skyrocketed demand for green metals like lithium, cobalt, and nickel. Mining companies focusing on these resources are capitalizing on the global push for cleaner energy solutions. The increasing adoption of EVs and energy storage systems has driven demand for these metals, creating significant opportunities for mining firms.

Given this landscape, investors might consider investing in three fundamentally stable mining stocks: Southern Copper Corporation (SCCO), Rio Tinto Group (RIO), and BHP Group Limited (BHP) for potential gain.

In a global scenario, governments are implementing policies to reduce carbon emissions, fueling investments in green technologies and propelling growth in the sector. Additionally, corporates are creating a pathway to sustainability in mining by adopting approaches that integrate IoT in smart mining, building circular economies, and shifting to renewable energies.

Similarly, technological advancements that include AI and Machine Learning, 3D printing, automation and robotics, drones and aerial surveying, blockchain for ethical sourcing, and biotechnology for waste management also help clear the way out for mine workers and corporations. Companies that adopt eco-friendly mining technologies are likely to gain a competitive edge, addressing both operational efficiency and environmental accountability.

Moreover, the global market for the green mining industry is anticipated to reach $16.9 billion by 2029, exhibiting a CAGR of 7.4%, driven by key factors such as growing environmental legislation and regulatory pressures, rising green finance, and rapid integration of renewable energy in mining operations.

Given this positive outlook, let us delve into the fundamentals of three Industrial – Metals stocks, beginning with the third.

Stock #3: Southern Copper Corporation (SCCO)

SCCO is an integrated producer of copper and valuable by-products. It operates the mining, exploring, smelting, and refining facilities in Peru, Mexico, Argentina, Chile, and Ecuador. Its operating segments include Peruvian operations; Mexican open-pit operations; and Mexican underground mining operations.

2024 STOCK MARKET OUTLOOK

On November 21, backed by its strong financials, the company declared to its shareholders a quarterly dividend of $0.70 per share and a stock dividend of 0.0062 shares per share of common stock.

SCCO pays an annual dividend of $2.78, which translates to a yield of 2.97% at the prevailing price levels. Its four-year average dividend yield is 4.50%. The company’s dividend payments have grown at a CAGR of 5.8% over the past five years.

SCCO’s sales for the third quarter (ended September 30, 2024) increased 17% year-over-year to $2.93 billion. The company reported an operating income of $1.45 billion, indicating a 35.6% growth from the prior year quarter. SCCO’s adjusted EBITDA came in at $1.68 billion, up 30.5% year-over-year, while its net income per share grew 43.8% from the prior-year quarter to $1.15.

The consensus revenue estimate of $2.87 billion for the fiscal fourth quarter (ended December 2024) represents a 25.2% increase year-over-year. The consensus EPS estimate of $1.11 for the same quarter indicates a 94.9 % improvement year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimate in three of the trailing four quarters.

The stock has gained 14.7% over the past year to close the last trading session at $93.78.

SCCO’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

SCCO has an A grade for Quality and a B for Stability. It is ranked #10 out of 31 stocks in the Industrial – Metals industry. Click here to see the additional ratings for SCCO (Growth, Value, Momentum, and Sentiment).

Stock #2: Rio Tinto Group (RIO)

Headquartered in London, the United Kingdom, RIO engages in exploring, mining, and processing mineral resources worldwide. The company operates through four segments: Iron Ore; Aluminum; Copper; and Minerals.

On December 12, RIO approved a $2.5 billion investment to expand the Rincon project in Argentina, the company’s first commercial-scale lithium operation, to 60,000 tonnes per year. The project uses direct lithium extraction (DLE) technology, a process that supports water conservation, reduces waste, and produces lithium carbonate more consistently. This investment will help RIO to strengthen its commodity portfolio.

In the same month, RIO entered into a partnership agreement with the Swedish investment company Vargas, Mitsubishi Corporation, and other international and local industry partners to study low-carbon aluminum projects in Finland. This partnership should strengthen the company’s global leadership in low-carbon aluminum.

For the six-month period that ended on June 30, 2024, RIO’s consolidated sales revenue increased marginally year-over-year to $26.80 billion. The company’s operating profit amounted to $8.26 billion, reflecting a 14% rise from the previous year’s quarter. In addition, its profit after tax reached $5.89 billion, and EPS came in at $3.56, reflecting increases of 19.1% and 13.3% year-over-year, respectively.

Analysts expect RIO’s revenue and EPS for the fiscal year ended December 2024 to be $52.73 billion and $6.86, respectively.

RIO shares have declined marginally intraday to close the last trading session at $58.19.

RIO’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

It also has a B grade for Value, Stability, Sentiment, and Quality. Within the Industrial – Metals industry, it is ranked #5. Click here to see RIO’s ratings for Growth and Momentum.

Stock #1: BHP Group Limited (BHP)

Based in Melbourne, Australia, BHP is a global resources company specializing in producing various commodities, such as iron ore, copper, nickel, potash, and metallurgical coal. The company operates through three segments: Copper; Iron Ore; and Coal.

On December 4, BHP signed a new Memorandum of Understanding (MOU) with HBIS Group to collaborate on decarbonizing the steel value chain. In the new MOU, using BHP’s Pilbara iron ores in commercial-scale DRI-EAF steel production will continue to be optimized. BHP aims to establish best practices and scalable solutions that continue aligning with its climate goals.

On October 31, BHP announced the signing of a multi-year Global Framework Agreement with ABB, a leading global technology company. This strategic collaboration will enable opportunities for both companies to collaborate in support of project delivery, operations and maintenance, and operational decarbonization.

In the fiscal year which ended June 30, 2024, BHP’s revenues increased 3.4% year-over-year to $55.66 billion. Its underlying EBITDA came in at $29.02 billion, up 3.8% from the previous year’s quarter. The company’s profit after taxation from continuing and discontinued operations amounted to $9.60 million, and its earnings per ordinary share stood at $1.56.

Street expects BHP’s revenue for the fiscal year (ending June 2025) to be $52.22 billion. Moreover, its EPS estimate is expected to be $4.36 for the same period.

Shares of BHP have declined marginally intraday to close the last trading session at $48.18.

It’s no surprise that BHP has an overall rating of B, equating to a Buy in our POWR Ratings system. It has a B grade for Value, Stability, and Quality. Out of 31 stocks in the same industry, BHP is ranked #4.

Beyond what is stated above, we’ve also rated BHP for Growth, Momentum, and Sentiment. Get all BHP’s ratings here.

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BHP shares were trading at $48.44 per share on Wednesday afternoon, up $0.26 (+0.54%). Year-to-date, BHP has declined -0.80%, versus a 0.34% rise in the benchmark S&P 500 index during the same period.