FTSE 100 Miners Ride the Iron Ore Boom

An iron price boom has helped swell the coffers of the likes of BHP, Rio and Anglo, but can their recent strong run be sustained if China is slowing down?

James Gard 19 July, 2019 | 8:52AM

Mining

China, the biggest driver of global commodity demand, has just reported the slowest quarter of growth for 27 years. Does this mean that investors should steer clear of FTSE mining companies like Rio Tinto (RIO), BHP (BHP), Anglo American (AAL), which supply raw materials in vast quantities to the country?

Setting aside China’s faltering growth story, it’s hard to ignore the chunky yields on offer by the biggest names: share prices of the FTSE 100 mining giants have had a strong year but yields are still between 3.5% and 5% for Rio, BHP and Anglo. Company cash positions are strong after years of belt-tightening – JPMorgan Natural Resources manager Neil Gregson says the miners, which have istorically been cyclical bets, can now be considered as “boring” dividend payers.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Anglo American PLC1,217.60 GBP0.00
BHP Group PLC1,241.20 GBP0.00
BlackRock World Mining Trust plc261.18 GBP-2.55
JPM Global Natural Resources A (dist)EUR8.41 EUR2.89
Rio Tinto PLC3,761.00 GBP0.00

About Author

James Gard  is content editor for Morningstar.co.uk

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