New Dividend Cycle in 2021 for Australia's Rare Earth Miners

Australia's rare earth miners may usher in a new round of dividend cycle in 2021 as the tight supply as well as the inflation and falling the U.S. dollar. According to ACB News. Ben Cleary, portfolio manager at investment management firm Tribeca Investment Partners, said that the tight supply of mining is expected to continue for many years.

Australian abundant rare earth element deposits image

On January 7, the price of copper, usually regarded as an indicator of global economic growth, hit an 8-year high. On January 8, the spot price of iron ore (1046, -18.00, -1.69%) rises to more than US$170 per ton, pushing Australia's S&P/ASX 200 index to a 10-month high.

Don Hamson, founder and managing director of Plato Investment Management, said that miner investors, such as rare earth miners benefit from the recovery of the mining industry and will receive a generous dividend in 2021.

rare earth mineral deal inked by US and Australia image

Hamson said that BHP, Rio Tinto and Fortescue are mining iron ore at a price of US$12 or US$14 per ton, with huge profit margins. Even after the most recent spike in iron ore prices, Fortescue still provides a total yield of 10%, which is comparable to the level of the four major banks in their heyday.

It is expected that after Biden takes over as president of the United States, Australia's lithium, copper, nickel and rare earth miners are expected to benefit from major policy changes in the newly formed US government.

Stephane Andre, portfolio manager of Alphinity Investment Management, said that copper prices will be boosted by the impact of green infrastructure and rising demand for electric vehicles.

Lynas to move upstream processing of rare earths image

Besides lithium, copper, nickel and rare earth miner investors, Cleary of Tribeca Investment Partners, an investment management company, said that the uranium market may also usher in a bull market in 2021.