What are politically stable jurisdictions for mining operations?

Politically stable jurisdictions for mining typically refer to countries with strong rule of law, consistent regulations, and respect for property rights. For mining companies, this means places like Canada, Australia, and the United States, where there's little risk of sudden government interference, asset seizure, or arbitrary tax changes. These areas provide greater operational certainty and protect shareholder interests, making them more attractive for long-term investment.

Why does geopolitical risk matter for mining and resource stocks?

Geopolitical risk directly impacts mining companies because their physical assets (mines and processing facilities) can't be relocated if a political situation deteriorates. In unstable regions, mining operations face threats like nationalization, sudden tax increases, corruption demands, permit revocations, or even violent conflicts. These events can cause production disruptions, write-downs of assets, or complete loss of investments. Mining companies in stable regions avoid these risks, potentially leading to more predictable operations and returns.

What is a royalty company in the mining sector?

A royalty company provides upfront financing to mining companies in exchange for a percentage of future revenue or production from the mine. Unlike traditional miners, royalty companies don't operate mines or face direct operational costs and risks. They essentially function as specialized finance companies for the mining industry, collecting ongoing payments when mines produce. This business model offers investors exposure to precious metals and other commodities with potentially lower risk than owning mining operators directly.

How do commodity cycles affect these mining stocks?

Commodity cycles are the natural price fluctuations of raw materials like gold, copper, or zinc based on global supply and demand. When prices rise (up-cycle), mining companies typically see higher revenues and profits without necessarily increasing production. When prices fall (down-cycle), profits can decrease rapidly. The mining stocks in this collection are still exposed to these commodity price movements, but their operations in stable regions mean they face fewer additional complications during down-cycles and can more reliably capitalize on up-cycles.

17 handpicked stocks

Stable Suppliers

A carefully selected collection of mining and resource companies operating in politically stable countries. These stocks offer exposure to essential commodities while avoiding the uncertainties of volatile regions, handpicked by our professional analysts.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 18