Coal prices have been in a strong bullish trend in the past few months as demand continues to outpace supply. Prices have jumped by more than 120% in the past 12 months and analysts expect that this trend will continue. Besides, coal investments have declined in the past few years while demand is set to rise as the crisis in the energy market continues. Here are some of the best coal stocks to invest in.
Glencore (LON: GLEN) share price has jumped sharply in the past few months. This trend is mostly because the commodities that the company focuses on have all risen. They have also risen since Glencore has not caved to pressure to separate its coal business.
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Glencore is a good coal stock to invest in for several reasons. First, energy products division is the biggest segment for the company’s business. In 2021, the division made more than $121 billion. Second, Glencore is a fully diversified company that generates revenues across various segments. It mines and sells products like nickel, crude oil, and copper.
Further, Glencore recently agreed to pay a $1 billion fine in the United States. While this was a huge fine, it now means that the company can focus on growing its business.
Thungela Resources (LON: TGA) is one of the biggest pure-play coal companies. The company emerged from Anglo American, the giant mining firm. Anglo decided to spin-off the South African mining company in a bid to reduce its carbon footprint. At the time, Thungela was valued at just $231 million.
Since then, the Thungela Resources share price has jumped by more than 1,134%, bringing its total market cap to more than 1.7 billion pounds. Its stock has even outperformed that of Anglo American, signaling that the company made a mistake. Thungela is a good coal stock because of the diversity of its market in Asia, Africa, and Middle East.
BHP Group (LON: BHP) is the biggest mining company in the world with a market cap of over $171 billion. The Australian company is highly diversified since it generates its income from multiple sectors. For example, it makes most of its funds from its iron ore business followed by copper. Coal is the third-biggest part of the company.
The BHP share price has risen by more than 30% this year and by 47% in the past 12 months. There is a likelihood that the soaring coal and petroleum prices will keep pushing its stock much higher.
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