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Considered a “native metal” due to its natural occurrence in nature as a usable metal, copper has been used by humans for thousands of years. Copper was also the first metal to be smelted from sulfide ores, the first metal to be cast into a mold and the first metal to be alloyed with another metal. That's a great reason to learn more about copper stocks.
Copper has unusually high thermal and electrical conductivity, which has made the metal ideal for electrical applications. As a result, copper has multiple uses in the emerging electrical vehicle (EV) industry including in charging stations, vehicles and other EV products and applications. Copper is also a constituent of various metal alloys and is used as a building material.
Because of its useful qualities, copper can be found in just about any device that relies on electricity, so demand for copper tends to rise when the economy expands. As the global economy emerges from the slump driven by the COVID-19 pandemic, the price of copper and its derivative products have increased based on higher anticipated consumption.
In addition, expectations of future inflation as a result of stimulus measures taken over the last year have risen, which can boost the price of hard assets like copper. This could make investing in copper mining stocks a prudent choice, both as an inflation hedge and for capital appreciation. Benzinga’s picks for the best copper stocks to invest in are highlighted below.
5 Best Copper Stocks to Invest in
1. Freeport-McMoRan (NYSE:FCX)
Phoenix, Arizona-based Freeport-McMoRan was originally incorporated in 1987 and is one of the world’s largest producers of copper. The company is a leading international mining company that specializes in the operation of large, geographically diverse and long-lived assets with notable probable and proven reserves of gold, copper and molybdenum.
The company’s extensive list of assets includes significant mining operations like the Morenci mineral district in Arizona, the Cerro Verde operation in South America and the Grasberg mineral district in Indonesia. The company also recently completed its Lone Star project in Arizona that is expected to produce approximately 200 million pounds of copper per year that will augment the 600 million pounds produced annually at its Cerro Verde operation.
2. Teck Resources (NYSE:TECK)
Founded in 1951 and based in Vancouver, Teck Resources is one of Canada’s leading mining companies. Teck develops mining and mineral properties primarily in North and South America. The company is organized into different segments focused on steelmaking and on mining coal, zinc, copper, lead, molybdenum, silver and other specialty metals.
Teck’s copper operations include the Highland Valley Copper mine in British Columbia, the Carmen de Andacollo copper mine in central Chile and the Quebrada Blanca copper mine in northern Chile. Teck also has an impressive pipeline of other copper projects in different stages of development.
3. COPPER MTN MNG CORP by Copper Mountain Mining Corp. (OTCPK:CPPMF)
Vancouver, Canada-based Copper Mountain Mining Corp. was founded in 2006 and specializes in exploring and developing mineral properties in Canada and Australia. As its flagship asset, the company owns 75% of the Copper Mountain mine in southern British Columbia that produces more than 100 million pounds of copper per year.
Copper Mountain is also in the development stage of its Eva Copper Project in Queensland, Australia. The Eva project is expected to add another 100 million pounds of copper to the company’s annual production. Copper Mountain is also developing a 210,000-hectare mining parcel in the Mount Isa region of Australia. As a copper company, it follows the global trends in copper production and the copper market.
4. First Quantum Minerals (OTCPK:FQVLF)
Vancouver, Canada-based First Quantum Minerals was founded in 1996 with the acquisition of the Bwana Mkubwa mining project in Ndola, Zambia. The miner has since grown to become one of the world’s top 10 copper producers and now operates worldwide with more than 20,000 employees.
First Quantum’s operating mines include Cobre Panama in Panama; the Enterprise, Sentinel and Kansanshi mines in Zambia; Guelb Moghrein in Mauritania; the Las Cruces mine in Spain; the Cayeli mine in Turkey; the Ravensthorpe mine in Australia; and the Pyhasalmi mine in Finland. Projects under development include the Taca Taca mine in Argentina and the Haquira mine in Peru.
5. Solaris Resources (OTCQB:SLSSF)
Originally named Solaris Copper, the Vancouver, Canada-based company changed its name to Solaris Resources in December 2019. Solaris is managed by the Augusta Group that has a track record of creating over CA$4.5 billion in exit transactions over the last 10 years.
Solaris Resources’ focus is on the acquisition, exploration and development of mineral properties, primarily in South America. The company’s largest mining asset is the Warintza property that covers 26,777 hectares in southeastern Ecuador. Other assets Solaris has an interest in include the Ricardo and Tamarugo properties in Chile and the Paco Orco project in Peru.
What are Copper Stocks?
Copper — a soft, ductile, malleable red-hued metal that is one of the most versatile and widely used metals of the modern era — was the first metal to be used by humans.
Copper is also widely used in the minting of coins and in industrial machinery such as heat exchangers. Copper salts have historically been used as pigments, while other copper compounds have been used as bacteriostatic agents and fungicides. Copper is also an essential mineral for all living organisms and is found in humans primarily in the liver, muscles and bones.
Because of copper’s use in infrastructure and construction, the price of copper is heavily influenced by the strength of the housing market and the growth rate of countries classified as emerging markets. Unlike other precious metals that mainly tend to appreciate in times of uncertainty, copper prices also increase in thriving economies, which makes copper stocks an attractive investment for market optimists.
Features to Look for in a Copper Stock
Here are a few factors to look for in the best copper stocks.
Proven Assets and Production
Because of the amount of copper available worldwide, most copper miners rely on their current and future production for an accurate evaluation of the company. For example, Freeport-McMoRan is one of the best stocks on our list because it operates large mining assets that have been proven to contain substantial reserves of copper and other valuable metals. Copper production, then, is an easy way to buy into this base metal instead of buying copper on the precious metals market.
As with any publicly traded company, the underlying fundamentals of the company have a strong bearing on whether its stock will appreciate in the future. A company’s operating income, revenue, debt burden and capital expenditures all make a difference and are reflected in the company’s stock price. Check if the stock pays a dividend and look at its earnings per share as useful fundamental indicators of the company’s overall financial health that should be taken into account when investing. In addition, geopolitical and natural disasters in the location of a company’s mines could significantly affect its stock price due to expectations of reduced production. If a copper producer in which you invest is losing value or the share price is not performing, don’t be afraid to exit that position.
While copper reserves can be found in the U.S., most large copper mines are located in South America. To obtain an interest in a foreign mining asset, companies must generally either obtain the approval of the government of the country where the mine is located or partner with a company located in that country that has or can buy the asset.
Best Online Brokers for Copper Stocks
Two of Benzinga’s copper stock picks (FCX and TECK) trade on the New York Stock Exchange (NYSE) and can be traded through any major U.S. stock broker. The other three stocks (CPPMF, FQVLF and SLSSF) trade in the over-the-counter (OTC) market, so you should check that your broker lets you access that market if you are interested in trading them.
Choosing mining stocks should come with advisor tools that make your life easier, information on each mining company, price targets and even information on copper prices on the worldwide market. When you choose the proper broker, you can more easily enter the copper market.
Is Now a Good Time to Invest in Copper Stocks?
A difference between copper and investment metals like gold is that copper has a myriad of industrial uses and generally has a high demand. As world economies begin to recover after the COVID-19 pandemic, copper and copper mining stocks have a decent chance to appreciate in value. The main risk is that demand for copper may decrease if the global economy weakens again, so now could be a good time to invest in copper stocks if your economic outlook remains favorable.
Frequently Asked Questions
Who owns the most copper?
Chile is home to the largest copper reserves in the world.
What are copper stocks?
Copper stocks are shares in companies that mine copper.
What are the best copper stocks?
You can find a list of the best copper stocks in the above article by Benzinga.