2025-12-16 03:26Summary of Mining Equities Conference Call Industry Overview - Sector Performance: In 2025, mining equities outperformed equity benchmarks, primarily driven by gold and copper, while ferrous metals and energy remained flat or declined [1][15] - 2026 Outlook: Expectations for copper, aluminium, and lithium to outperform due to supply constraints and energy transition, with a cautious view on traditional end markets in developed economies [2][15] Key Commodities Insights Copper - Market Dynamics: The medium-term outlook for copper remains bullish, with expectations of market tightness in 2026 due to limited growth in global mine output and a deficit in refined output [3][4] - Investment Opportunities: Freeport is highlighted as a top pick due to its discounted valuation and expected production recovery at the Grasberg mine [4][23] Aluminium - Demand vs Supply: The outlook for aluminium is mixed; while demand holds up, supply constraints are expected, particularly from China and developed markets [5][24] - Investment Recommendation: A buy recommendation for Norsk Hydro is reiterated, with expectations of stable operations and potential cash returns [8][24] Gold - Market Sentiment: Gold remains a consensus macro trade, with equities delivering strong returns in 2025. However, valuations are less compelling than at the start of the year [9][22] - Top Picks: Barrick and Newmont are identified as top picks, with potential for further catalysts in 2026 [10][22] Iron Ore - Price Forecast: The medium-term outlook for iron ore is bearish, with prices expected to stabilize around $100/t in the short term and decline to $90/t by 2027 due to increased supply from Simandou [11][20] Coal - Market Conditions: Met coal prices have risen above $200/t due to demand and supply disruptions, while thermal coal remains stable at $110/t [12][20] Diversified Miners - Performance Comparison: Vale outperformed in the bulks sector, while RIO and BHP performed in line with benchmarks. A preference for RIO over Vale and BHP is noted due to better growth prospects [13][25] Earnings and Price Target Changes - Adjustments: Earnings estimates and price targets have been adjusted based on commodity price forecasts, with notable upgrades for copper miners like FCX and KGHM [28][29] Conclusion - Investment Strategy: The report emphasizes a selective investment approach in mining equities, focusing on commodities with strong fundamentals and potential for price gains, particularly copper, aluminium, and gold [2][15][22]