5 Non-Ferrous Metal Mining Stocks to Watch Despite Industry Concerns

Industry Overview - The Zacks Mining - Non Ferrous industry is facing challenges due to weak demand in China, which is impacting metal prices, alongside inflated costs, labor shortages, and supply-chain issues [1][4][5] - Despite these challenges, the demand for non-ferrous metals is expected to be supported by the energy-transition trend, which could buoy the industry in the long run [1][6] Current Market Conditions - Copper prices have been negatively affected by weak demand in China, although recent stimulus measures may provide some support [4] - Uranium prices are currently around $79 per pound, the lowest since November 2023, but a 12% year-over-year improvement in production guidance from Kazatomprom indicates sufficient supply in the near term [4] - Gold prices are near record highs of $2,660 per ounce, driven by geopolitical tensions and central bank purchases, while silver prices have also risen but may face demand challenges due to manufacturing sector contraction [4] Labor and Cost Challenges - The industry is experiencing a shortage of skilled labor, leading to increased wages and potential production disruptions [5] - Escalating production costs, including electricity, water, materials, and freight expenses, are significant concerns for industry players [5] Future Demand Drivers - The demand for non-ferrous metals is expected to remain high due to their essential roles in transportation, electricity, construction, telecommunications, and renewable energy [6] - The push for electric vehicles and infrastructure upgrades under the U.S. Infrastructure Investment and Jobs Act will further drive demand for metals like copper and nickel [6] Industry Performance - The Zacks Mining - Non Ferrous industry has outperformed both the Zacks Basic Materials sector and the S&P 500 over the past 12 months, with a collective gain of 43.5% compared to 11.6% and 33.9% respectively [9] - The industry currently trades at a forward 12-month EV/EBITDA ratio of 7.80X, lower than the S&P 500's 14.45X and the Basic Materials sector's 6.58X [10] Notable Companies - Centrus Energy: Recently secured a $1.8 billion contingent supply agreement for low-enriched uranium and began production of High-Assay Low-Enriched Uranium at its new plant [10][11] - Freeport-McMoRan: Focused on expanding reserves and improving production efficiency, with significant copper production expected from its operations in North and South America [12][13] - Lundin Mining: Increased its stake in the Caserones copper mine, adding 25,000 tons of copper to its production profile, and is involved in joint ventures to progress major projects [15][16] - Coeur Mining: Achieved operational milestones at its Rochester mine, with production targets of 4.8-6.6 million ounces of silver and 37,000-50,000 ounces of gold [17][18] - Ero Copper: Successfully produced its first saleable copper concentrate at the Tucumã Project, with plans to double copper production by 2025 [19][20]