The mining sector is a significant contributor to the London Stock Exchange, and it has many constituent companies — far too many for me to cover them all here.

This feature will be over two or three parts, but even then, I can only cover a small chunk of the businesses.

I focus here on companies with a market cap over £100 million and that also seem especially interesting. By that I mean maybe they have seen rapid growth, are big dividend payers, seem undervalued by the markets or are into a growth area, such as Lithium.

Anglo American 

Anglo American’s main stock listing is on the London Stock Exchange, but it has a secondary listing on the Johannesburg Stock Exchange. It is the world’s largest producer of platinum, but also produces gold.

Anglo American is a South Africa focused miner which produces diamonds, coal, base and ferrous metals, industrial minerals, timber and coal.

According to an entry on Wikipedia, it is responsible for 0.59 per cent of global industrial greenhouse emissions, but has a target to be carbon neutral by 2040.

At the time of writing, shares stand at an eight-year high. Five years ago, the company made a heavy loss, which in turn had a knock-on effect on dividends. That year aside, Anglo American has traditionally been a strong dividend payer, although the combination of a good share price performance and a cut in dividends resulting from a performance impairing effect of Covid-19 has meant that the dividend yield is currently lower than average for the company. 

Anglo Asian Mining

By the standards of this sector, Anglo Asian Mining has a modest market cap of £149 million, but despite its modest size (for a miner), I have included it here because of the spectacular share price performance over the last five years. Shares have increased 30-fold since 2015.

The company mines copper and gold in Azerbaijan — and has benefited from recent rises in the gold price. To an extent, its future performance will be gold price related.  

In 2015, the company made a pre-tax loss of  $8.9 million. In 2019, it made a $30 million profit. This write-up provides good detail on the company.

Antofagasta 

Antofagasta is a Chilean based miner of copper. Shares currently sit at a ten-year high, and indeed have trebled over the last five years. Profits have grown at a nice pace too.

Recently, the company announced plans to commit to responsible mining.

To an extent at least, the company’s longer-term prospects are dependent on something it has little control of, namely the copper price. Copper is currently at an eight-year high, and China account for half of global demand for copper.

Anglo Pacific 

Do Anglo Pacific shares represent an opportunity for income investors? I say this because the company ticks most of the boxes — decent profit growth, very appealing dividend yield, and yet the share price has not kept pace with profit growth — helping create this apparently high yield. Sure, it has taken a Covid related knock and projected profit for this year is down significantly — more than reversing growth seen over the last half-decade. But the company expects strong recovery in 2021.

Atalaya Mining

I think one of the benefits of this series is that it may help investors discover stocks they might not have otherwise known about, and at least give them pause for thought.

What I like about Atalaya Mining is its growth. 

Five years ago, it made a 15 million euros loss; last year pre-tax profits hit 37 million euros. Furthermore, its latest quarterly results (to the end of September 2020) showed a big jump on last year. 

It is also moving into solar, too.

Bacanora Lithium 

Let’s face it; Lithium is a growth commodity. We can be sure that demand for Lithium will multiply several-fold over the next few years, in tandem with growth not only in electric vehicles, but also as demand for lithium-ion batteries expand with increased use of renewable energies, creating the issue of intermittent energy supply. 

It is difficult to say for sure what will happen to the lithium price, because we don’t know how rapidly supply will rise. But to keep pace with demand, supply will have to increase at quite a canter. 

Bacanora Lithium is focused on a major lithium project in Mexico.

All prices are approximate figures taken from 11 December 2020.

These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees.