The Best ASX Mining Stocks to Buy

Australia is known the world over as a premier mining country. Australian mining stocks are in the top tier of the world’s producers of lithium, nickel, copper, gold, silver, and other metals and minerals.

The world runs on hard commodities that come from the earth. Australian investors are blessed with a wealth of stellar miners from which to choose, in virtually all commodity categories. Australian mining stocks are the subject of a cornucopia of investment analysis from industry experts and stock market analysts, enabling investor research.

There is no such thing as a “best” stock that meets the needs of all Australian investors. The choice depends on the individual investor’s strategy. Some are attracted to bargain, or value stocks, while others prefer stocks with high growth potential.

Market capitalisation is a measure of how market participants perceive the value of the stock. Demand for commodities rises and falls and large cap stocks are more likely to have the financial resources to weather the storm. Large market caps provide some safety for the risk averse.

For traders looking to invest in Australian mining stocks, we have selected some of the best buys by market cap.

In this article we will cover:

• The Best ASX Lithium Stocks
• The Best ASX Nickel Stocks
• The Best ASX Copper Stocks
• The Best ASX Gold Stocks
• The Best ASX Silver Stocks

Lets dive in!

The Best ASX Lithium Stocks

Not long ago Lithium was on fire with the perception demand driven by our insatiable appetite for battery-powered electronic devices and the anticipated shift from ICE (internal combustion engine) powered vehicles to battery powered vehicles, from cars and buses and trucks up to airplanes. Oversupply conditions and a slow fall of electric vehicle sales in the midst of high interest rates put the lithium price in a downward trend.

Here are two of the best lithium stocks on the ASX:

Allkem Limited (ASX: AKE)

In 2021, a leading hard rock producer on the ASX – Galaxy Resources Limited (ASX:GXY) merged with lithium from brine producer – Orocobre Limited (ASX:ORE).

The new company began trading on the ASX in late August of 2021 under the name and code – Allkem Limited (ASX:AKE) with a market cap of $7.8b. Two years later the company has merged again, this time with US-based lithium chemicals producer Livent Corporation. The new company trades on the ASX as Arcadium Lithium (ASX: LTM) and in the US as ALTM.Combining mining and refining resources should give the newly christened company a competitive advantage over time. Allkem got off to a great start, reporting solid Full Year 2022 Financial Results.

The newly formed entity listed in the midst of a global meltdown of lithium stocks following sliding lithium prices with the share price dropping 32.1% since listing on the ASX in December of 2023. From the ASX website:

Source: ASX

Arcadium is nearing completion of a new brine producing asset in Argentina – Sal da Vida – and has a new hard rock producing asset in development at James Bay in Canada with a processing facility in Japan. James Bay recently received final environmental approval to proceed with the project.

Pilbara Minerals (ASX: PLS)

Pilbara claims its wholly owned Pilgangoora Lithium-Tantalum Project is the largest independently owned hard-rock lithium operation in the world, with two mines in production. The company also holds a 70% stake in the Mt Francisco joint venture.

Pilbara is looking to expand into the entire lithium supply chain and has another joint venture in place, with South Korea’s POSCO – the POSCO-Pilbara JV Company to build a lithium hydroxide chemical processing facility to be located in South Korea.

Pilbara’s Full Year 2022 Financial Results showed a 647% increase in revenue and a 989% increase in net profit.

Both Allkem and Pilbara benefited from significant upward spikes in the price of lithium, which has now dramatically declined. Pilbara’s Half Year 2024 results reported on 22 February showed the disastrous impact of falling lithium prices – revenues declined 77% and underlying profit fell 78%.

Expert opinion on the future of lithium prices remains mixed, with both bulls and bears making their arguments. Year over year the Pilbara stock price is down 3.3%. From the ASX website:

Source: ASX

The Best ASX Nickel Stocks

Demand for nickel has broken out of its traditional use in stainless steels, vaulting into the latest holy grail of investing – critical battery minerals. The commodity may still be in hgh demand, but the price has collapsed, driving down the price of nickel miners. As of 19 Feebruary the price had fallen from a 2022 high of $50,000 USD per tone to $16,400 USD per tonne.

IGO Limited (ASX: IGO)

IGO’s mission statement is to mine the metals needed for a clean energy future. IGO’s primary focus is its three Australia-based nickel mining operations. The company also holds a 49% interest in a lithium joint venture project with privately held Tianqi Lithium, as well as a 25% interest in another joint venture with ASX listed lithium miner, St. George Mining Limited (ASX: SGQ).

IGO bore the brunt of declining prices of both the commodities it mines – lithium and nickel. Half Year 2024 financial results showed a 19% decline in revenues, a 53% fall in net profit after tax, and an 21% drop in dividends paid.

The share price is down 43.1% year over year, but a ten year chart paints a different picture. From the ASX website:

Source: ASX

Nickel Industries (ASX: NIC)

Nickel Industries holds interests of between 70% and 80% in four different nickel mining operations in Indonesia. The stock price is down 18% year over year. Despite its smaller market cap, the company is a consistent dividend payer. The calendar year 2022 was not kind to share market investors as inflation roared, interest rates rose, and recession fears took center stage at times. From the ASX website, the five-year share price movement chart shows the gradual collapse from the highs of 2022:

Source: ASX

Nickel’s Full Year 2022 Financial Results posted record levels of production and record profit, up 18.9% while revenues rose 88.4%.

The price of nickel fell from 2022’s $50,000 per tone to $16,400 per tonne in response to a supply increase out of Indonesian mines. The FY 2023 results at Nickel Industries reflected the drop, with revenue up 54.5% and profit after tax down 15.8%.

The Best ASX Copper Stocks

Copper has long been considered a bellwether for the economy, given its use in so many industrial applications. While not uniformly classified as a critical battery mineral, copper’s role has long past evolved beyond electrical wiring and plumbing into use in electronic components of all types as well the electrical grid itself, electric vehicles, and renewable energy delivery systems.

Australian investors have two of the world’s largest copper mining companies listed on the ASX – BHP and Rio Tinto.

BHP Group (ASX: BHP)

With a market cap of $223 billion dollars, BHP is the largest stock on the ASX. The company bills itself not as a mining company, but as a provider of the essential resources needed for global growth and a transition to cleaner energy.

The company has operations virtually in every corner of the world, producing copper, iron ore, nickel, metallurgical coal, and potash. BHP is a prolific dividend payer and has bounced back from challenging times repeatedly over the last decade. From the ASX website:

Source: ASX

The share price is down 8.3% year over year. Full Year 2022 financials showed a 13% increase in revenue from operations and a 173% increase in profit.

BHP’s FY 2023 results reflected the declines in the multiple commodities the company mines. Revenues fell 17% while profit fell 58%. Half Year 2024 results provided no relief to beleaguered investors – revenues up 6% but profit fell 86%. BHP has acquired Oz Minerals, an ASX listed pure play copper producer.

Rio Tinto Group (ASX: RIO)

Rio’s mission statement is to find better ways to produce what the world needs. The company has operations in eight countries around the world, producing iron ore, aluminum, copper, lithium, borates, diamonds, and salts.

While BHP has decided to stay out of the lithium market, Rio has a demonstration plant in the US state of California to recover lithium from waste rock. Like BHP, Rio’s share price performance over the last decade shows the company’s resilience in recovering from troubled times. From the ASX website:

Source: ASX

Year to date the stock price is down about 11.6%. Rio’s Full Year 2022 and 2023 Financial Results reflected the challenging conditions commodities markets. . In FY 2022 net cash from operations fell 36% while net profit after tax dropped 41.%.In FY 2023 net cash from operations fell 6% while net profit dropped 19%. By contrast, the full year 2021 results during an upbeat commodities market showed a 60% increase in net cash from operations and a 116% rise in profit after tax.

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The Best ASX Gold Stocks

Historically, gold has attracted investor interest as a safe haven in troubled times. Interest rates have risen to combat inflation, and the prospect of aninent recessionstill looms large in the eyes of some experts, but the supposed recession appears to be on hold at the moment.

Acquisition activity is generally a welcome sight for investors in a specific sector, so the successful attempt by the world’s largest gold miner – Newmont Mining (NYSE: NEM) – to acquire the largest gold producer on the ASX by market cap – Newcrest Mining (ASX: NCM) should have piqued investor interest in investing in the best ASX gold stocks.

Newmont Mining (ASX: NEM)

A new ASX “gold rush” appears to have started, with multiple ASX gold miners seeing double digit share price increases in early March of 2024.

Newmount – now the world’s largest gold miner – is up 11.4% since 1 March, a welcome result for Newmount investors shocked by the company’s $2.5 billion dollar loss in FY 2023 financial results.

Since listing the share price is down 16.2%. From the ASX website:

Source: ASX

Northern Star Resources (ASX: NST)

With a market cap of $16.5 billion dollars, Northern Star ranks second among ASX gold stocks. The company’s share price performance over the last decade compared to the third largest ASX gold miner, Evoultion Mining (ASX: EVN) suggests Northern Star may be the best ASX gold stock. From the ASX website:

Source: ASX

The company began its climb in the ranks of ASX gold miners in 2010, with its first major acquisition – the Paulsen mine in Western Australia. Northern Star continued its aggressive acquisition strategy, with the company maintaining its pledge to pursue attractive acquisitions to this day.

Half Year 2024 continued the company’s solid FY 2023 full year results, with revenues up 15% and underlying net profit after tax up 287%.

Year over year the Northern Star share price is up 35.4%.

The Best ASX Silver Stocks

Silver is also considered a safe haven investment but does not match the allure of gold. The result of investor preference for gold is lower liquidity for silver investors. Silver is thinly traded but it is cheaper for retailers to buy and has industrial applications in a variety of green technologies, including electric vehicles and devices as well as solar panels.

Silver Mines Limited (ASX: SVL)

Silver Mines is the only pure play silver miner listed on the ASX. The company’s share price is up 176.7% over five years. From the ASX website:

Source: ASX

The company is the sole owner of the Bowden Silver Project in New South Wales, reportedly the largest undeveloped silver deposit in Australia, with a feasibility study in place. Silver Mines recently completed an $8 million dollar share purchase plan. Drilling is underway at the Bowden Project.

South32 Limited (S32)

South32 has a market cap of $13.3 billion dollars. It operates in Australia, South Africa, and South America with a highly diversified asset base. The company’s Cannington Mine in Queensland is one of the largest silver and zinc mines in the world.

Year over year the stock price is suffering from the challenging conditions in the commodities sector, down 35.4%. Since listing on the ASX in 2015 following a spin off from BHP the stock price is up 36.5%. From the ASX website:

Source: ASX

In FY 2023 the company saw declining revenues and a profit loss following positive results posted in 2022. Half Year 2024 resuilts continud the trend with a 14% decline in revenue and a 92% fall in profit after tax. The share price got a boost as the company shed its metallurgical coal assets to support its strategy of focusing on minerals critical to the green energy transition, along with the announcement of a $2.5 billion dollar approval for the Hermosa project in the US state of Arizona.

Market Capitalisation provides a measure of safety when seeking the best stocks. A large market cap tells the potential investor other market participants regard the stock highly. While ASX mining stocks are among the best in the world, junior miners face the gauntlet of expense after expense bring a mining prospect into production.

FAQs

How do you Invest in Junior Mining Stocks?

You can invest in Junior mining stocks by purchasing shares through a regulated broker. Junior mining stocks are new or smaller companies looking to develop a natural resource deposit. They are riskier than investing in major mining companies as they tend to have lower amounts of capital and shorter histories. Their popularity with Australian investors comes from the fact that their value can increase dramatically if they hit upon a large deposit of the resource they are mining. However there is no way to know how much of the natural resource is contained in the deposit, so their value can easily drop should the deposit not live up to expectation. Investors should always do their due diligence and have a risk management plan in place.

Which Companies are Mining Lithium?

Lithium is a commodity that is used in the manufacture of batteries. Demand for lithium has grown in recent years due to increasing sales of electric vehicles. Australian companies that mine lithium include Allkem Limited and Pilbara Minerals.

When is the Best Time to Buy Gold Stocks?

Gold stocks are companies whose value is closely tied to the price of gold, though their stock price is affected by other factors as well. Gold is an asset that is traditionally seen as a safe haven in times of uncertainty. Typically the price of gold rises in periods of high inflation and recession. On average the price of gold tends to climb during January and February before dropping off during the Spring and Summer months and climbing again in the Autumn. You should always do your own research before deciding to invest and never risk more than you can afford to lose.