Mining for Investment Opportunities

Mining companies get a lift from President Biden. See which companies we're keeping an eye on in the sector.

President Biden gave a much-needed lift to the mining companies last week when he use the Defense Production Act to support the domestic production of battery minerals.

Why it matters: Companies engaged in mining, processing, and recycling minerals in the US can now get access to a US$750-million fund administered by the Defense Department.

United States Steel (X) serves the automotive, construction, appliance, energy, containers, and packaging industries. The company makes high value-added steel products, including its proprietary XG3 advanced high-strength steel.

  • U.S. Steel has an annual raw steelmaking capability of 26.2 million net tons.
  • Adjusted EBITDA is anticipated to be $1.3 billion, setting a new all-time record for the first quarter.
  • Adjusted diluted EPS for the quarter is expected to be in the range of $2.96 to $3.00.4

Alcoa Corp. (AA) is a global leader in the production of aluminum, bauxite, and alumina products. The company has bauxite reserves at seven global mines.

  • Alcoa generated revenue of $12.15 billion in the FY2021, an increase of 31% YoY compared to the previous year.
  • Its net income came in at US$429 million or US$2.26 diluted EPS compared to the net loss of US$170 million or US$0.91 diluted EPS.

The bottom line: The benchmark SPDR S&P Metals & Mining ETF (XME) returned 37.49% gains YTD, while the benchmark S&P 500 index fell 4.40% in the same period.

Demand for raw materials and minerals shows no signs of slowing down. Manage this volatile market with defined outcomes: X, AA

Source: CNBC

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