According to a new report from VanEck, Australian mining stocks are rallying amid growing global demand for local resources.
Anna Wu, Senior Associate, Cross-Asset Investment Research at VanEck, said looking ahead, there are several signs that suggest this momentum could continue.
Macro environment turned increasingly supportive
According to the report, resource companies are typically pro-cyclical.
This means historically, they outperform the broader market in an environment of stronger growth and rising commodity demand.
In Australia, improving GDP growth outlook alongside recovering imports from China could be good news for the sector.
Critical mineral miners, including producers of rare earths, uranium, and copper, could see further upside. This comes as the global economy is navigating a chapter of renewed protectionism.
Ms Wu also said gold miners have continued to benefit from margin expansion. This has been driven by rising gold prices and a bullish demand outlook for the commodity.
Compelling valuations
According to the report, resource and mining stocks may still offer value.
Australian resources are currently trading at more reasonable levels relative to their historical levels and are offering more attractive valuations than the S&P/ASX 200, meaning greater potential upside if the current resources rally continues.
Two stocks that the ASX ETF provider has continued optimism on are Lynas Rare Earths Ltd (ASX: LYC) and Evolution Mining Ltd (ASX: EVN).
The team at VanEck is bullish on Lynas. This is despite the stock already rocketing 88.65% in the last 6 months.
The stock has benefited from US-China trade tensions as demand for non-Chinese rare earths has surged.
With analysts forecasting revenue to return to pre-COVID highs by early 2026, VanEck remains bullish on Lynas' outlook, viewing persistent geopolitical risks as a continued tailwind for the company.
Evolution Mining has surged 144.01% higher in 2025 on the back of record gold prices.
With gold miners still trading at discounts to the spot price of gold and macro drivers likely to remain supportive, the risk-reward continues to skew favourably. Over the coming months, we see further upside potential in gold, as well as quality producers such as Evolution Mining, which have reasonable scale, balance sheet strength, and leverage to sustained pricing.
How to gain exposure to mining stocks?
For investors looking to gain broader exposure to mining and resource stocks, there are ASX ETFs to consider:
- VanEck Australian Resources ETF (ASX: MVR) – provides overweight exposure to mid and small cap miners.
- SPDR S&P/ASX 200 Resources Fund (ASX: OZR) – seeks to closely track, before fees and expenses, the returns of the S&P/ASX 200 Resources Index.
- BetaShares S&P/ASX 200 Resources Sector ETF (ASX: QRE) – tracks large ASX-listed resources companies.
These provide a diversified combination of mining and resource shares and may suit investors looking to gain exposure to this sector without choosing individual stocks.
The post Why mining stocks can keep rallying: Expert appeared first on The Motley Fool Australia.
Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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