The document discusses the potential for long-term investments in Australian mining stocks, particularly in the context of increasing global demand for strategic minerals like lithium, nickel, and gold. It highlights major companies such as Pilbara Minerals and Rio Tinto, noting the impact of geopolitical factors and the Inflation Reduction Act, which could facilitate a shift from dependence on China to stronger ties with the US and its allies. Overall, Australian mining stocks are positioned as promising investments due to their strong fundamentals and growth potential.

1. By: www.ProfitableInvestingTips.com

2. Successful long term investors look beyond
current market fluctuations. They invest in
stocks that have long term intrinsic value
based on strong fundamentals. In this regard,
we are looking at Australian mining stocks as
long term investments. The largest stocks in
this group are BPH, Rio Tinto, Fortescue
Metals Group, Newcrest Mining, and South32.

3. However, there are dozens more like Pilbara
Minerals with their lithium mining operations.
As the US, EU, and their allies move to
maintain access to strategic mineral supplies
and processing, Australia stands out. For
example, more than fifty percent of the
lithium mined in the world comes from “down
under.”

4. Why Invest in Australian Mining Stocks?

5. Investment in mining stocks gives the investor
exposure to commodities like nickel, copper,
lithium, iron ore, gold and even rare earth
strategic minerals. Many Australian mining
stocks have had strong growth and
profitability. As the US, EU, Japan, and others
seek to secure their sources of everything
from aluminum and cobalt to lithium and
zinc, Australia is a natural choice with its vast
reserves and strategic alliance with the US,
Japan, and India in the “Quad.”

6. Geopolitical Risk Versus Opportunity

7. A short term risk with mining stocks is that the
minerals they mine are commodities. Commodity
prices rise and fall with the economy and
geopolitical factors like China’s use of its
economic clout to reward or punish its trading
partners. In the short term mining stocks can
offer profitable investments if one times the
market correctly. Over the long term they offer
long term growth and security. In the case of
Australia, they currently send much of their
production to China but do not need to so long
as other markets are available.

8. Mining Company Benefits from the Inflation
Reduction Act

9. The New York Times reports that Pilbara
Minerals, which is the dominant lithium
mining operation in Australia, is looking to
set up processing operations within Australia
instead of sending ore to China for
processing. While this may be expensive to
develop, money is available from the US
through the Inflation Reduction Act. This law
enables the US to provide subsidies and loans
to countries with free trade agreements with
the US, like Australia.

10. This will help Australia break its dependence on
China and firm up supplies to the West that do
not flow through China. Australia and the US
recently signed a critical minerals agreement that
will further facilitate this sort of pivot from China
back to Australia and to allied nations. The point
is that there will be money available to help
Australian mining companies pivot to supply the
US and its allies in preference to China and this is
likely to generate long term profits for these
companies.

12. Track Records of Australian Mining
Investments

13. Pilbara Minerals was founded in 2005 and was
a penny stock trading in the Australian
market until it rose above a dollar a share
(AUD) in 2021. Today it trades at $4.99 AUD
with a P/E ratio of 8.4. It does not pay a
dividend. Meanwhile, the second biggest
mining company operating in Australia is the
multinational, Rio Tinto. It is an English and
Australian company that trades on the
London and Melbourne exchanges with ADRs
available on the NYSE.

14. A Rio Tinto ADR share traded for $10 in 1990
and trades for $58.99 today. It has a P/E ratio
of 7.74 and a dividend yield of 15.41%. The
stock started the year at $77 before falling to
its current price. These two companies are
bookends of the mining company investment
opportunities in Australia.

15. Pilbara is new, growing, and shows promise.
Rio Tinto has been around for 150 years and
generates a 15% dividend yield from its many
mining operations across the globe. You can
sort through the dozens of Australian mining
stocks or you can use one of the several
Australian mining stock ETFs available for
long term exposure to this investment niche.

17. For more insights and useful information about
investments and investing, visit
www.ProfitableInvestingTips.com.