Hobson: Mining Investing's Golden Rules

THE WEEK: Morningstar columnist Rodney Hobson looks at the investing case for copper and gold miner Antofagasta, whose shares have fluctuated around 900p in the last two years

Rodney Hobson 26 April, 2019 | 10:08AM

Mining

Assessing mining companies as investment opportunities is something of a minefield. Rarely if ever does a metal or mineral exist in isolation so you have to work out the potential returns from two or more products. Then there’s the amount of ore in the ground to consider and its quality. You may have only a sketchy idea how far or how wide a seam will run. And all that is before you even start to think about the price that the product can command.

Mining companies commendably produce complex tables of ore grades and production with each quarterly update but you need a degree in metallurgy to understand them. However, it is possible to make a decent stab of it by following the golden rule: is the company doing better or worse than at the same stage last year?

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Antofagasta PLC742.40 GBX-0.19
The Royal Bank of Scotland Group PLC103.05 GBX-3.69

About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.

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