Mining Stock Picks for December

Submitted by J. Frank Sigerson as part of our contributors program.

Mining Stock Picks for December

The year is almost over, and the time is ripe for investors looking for last-minute ventures. Those looking to diversify their portfolio are probably having a hard time choosing which commodities to invest in, given the movement in the market and the status of both energies and metals.

Still, there are always opportunities for those who keep their eyes open. Amidst an impending nickel deficit and an oversupply of coal, some companies have stood out and continue to perform well. Here are some stock picks in the mining sector:

Among Sydney miners, Barron’s Asia recommends picking Rio Tinto PLC (NYSE:RIO) over BHP Billiton Limited (NYSE:BHP). BHP might be the bigger company, but a part of its annual revenue of $73 million comes from oil — about 30% of it. With the current supply glut of oil affecting base prices all over the world, it is predicted that BHP might suffer more loss in the coming months.

Rio Tinto, meanwhile, is reaping the advantages because they are using diesel. When the price of oil drops, so does diesel, which means that the cost of producing iron ore decreases, too. According to Paul McTaggart of Credit Suisse, for Rio Tinto, what was once a $5 per ton cost of diesel can fall by $1.50 per ton, which would be beneficial, especially now that the prices of iron ore has dropped from $180 to $70 a ton. McTaggart adds, “Rio is making money hand over fist . . .  Why would anyone in his right mind shut down capacity or sell parts of their iron-ore business with such high margins?”

Speaking of being profitable, Amur Minerals Corporation (AIM:AMC) in the far eastern Russia is all set to move forward with its Kun-Manie project in Amur Oblast. The company’s license application was recently approved by the Ministry of Natural Resources, and is just waiting for authorization from the country’s prime minister. This news propelled the stock to new levels. Proactive Investors UK declared it as one of the market movers in the past week, with closing prices rising to as much as 28%.

Says Robin Young, Chief Executive Officer of Amur Minerals: “We are pleased to inform our shareholders that the licence conversion process continues to move forward with the support of the Russian authorities. Having received approvals from all the required agencies, speaks to the desire of the Russian Government, in accord with Amur, to move this project onto the next phase.”

Morgan Stanley adds another Russian name to the list, per a report from Yahoo! Finance: AK Alrosa OAO (MCX:ALRS), which specializes in diamonds, from exploration to production. It doesn’t seem to have been affected by the current Russia-Ukraine conflict, and in fact has improved even while the ruble is weak.

There is also Oasis Petroleum Inc. (NYSE:OAS), which the analysts at Credit Agricole upgraded as a “buy.” The company acquires and develops oil and natural gas, and is based in North Dakota and Montana. Per Stafford Daily, the company has long been trading bullishly, and that it has now given a sell signal.

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Sources:

http://online.barrons.com/articles/top-mining-stock-pick-rio-tinto-over-bhp-billiton-1417841048
http://www.proactiveinvestors.co.uk/companies/market_reports/75145/market-movers-j-sainsbury-anglo-american-ms-carnival-milestone-amur-minerals-0000.html
https://finance.yahoo.com/news/morgan-stanleys-top-international-mining-183749132.html
http://stafforddaily.com/hot-stocks-penn-west-petroleum-ltd-usa-nysepwe-whiting-petroleum-corp-nysewll-oasis-petroleum-inc-nyseoas/33311/