09. August 2021 | 10:19 CET
Diamcor Mining, Rio Tinto, Siemens - Tailwind
Diamonds have a number of unique properties, which means that they are in demand in the jewelry sector and industry in particular. Diamonds are considered the hardest material of all; they can withstand high thermal stress and strong electrical resistance. For these reasons, diamonds are sought after in laser technology, in semiconductors, and for a wide range of electronic components. The world's largest diamond producers include Russia, Africa and Australia. Many industry experts expect that current known global diamond production will be insufficient to meet growing demand from China and India. We have three exciting investment ideas in store.
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ISIN: Diamcor Mining Inc. | CA2525312070 , RIO TINTO LTD | AU000000RIO1 , SIEMENS AG NA O.N. | DE0007236101
DIAMCOR MINING INC - Strategic cooperation with Tiffany & Co.
Diamcor Mining is focused on identifying, acquiring and operating diamond projects that can be put into production in the near term and have the potential to generate continuous diamond production and cash flow. The Company's geographic focus regions include Canada and South Africa.
The Canadians are currently focused on developing and advancing the Krone-Endora at Venetia Project in South Africa. The project covers approximately 5,900 hectares and is adjacent to De Beers' flagship Venetia diamond mine. Diamcor has a long history of operations and production in South Africa and has extensive experience supplying rough diamonds to the world market.
Diamcor Mining follows a low-risk strategy in that the Company does not engage in exploration projects. Instead, Diamcor is focused on acquiring projects involved in the processing of tailings reserves using modern technologies. Also of interest are high-quality alluvial and eluvial projects that recover documented diamond-bearing gravels using simple, low cost strip-mining techniques.
The Canadians recently entered into a long-term strategic alliance with Tiffany & Co. Canada, a subsidiary of the world-famous New York-based Tiffany & Co. Under the terms of the agreement, Tiffany & Co. Canada has a right of first refusal on up to 100% of the future rough diamond production of the Krone-Endora at Venetia Project at prevailing prices. Equally significant, the agreement provides what the Company says is substantial financing to move the project forward as quickly as possible. With the inflow of financial resources and the associated project development, an important step towards production should succeed. The Company is currently valued at only CAD 23 million.
RIO TINTO PLC - Dividend yield of over 9% beckons
Rio Tinto is one of the largest mining companies globally and a major producer of diamonds. Late last year, the Company ceased production at the Argyle Diamond Mine. Until then, the mine in the Kimberley region of Western Australia was one of the world's richest deposits, producing rough diamonds worth 865 million carats! The diamond business within the Group is now dominated by the Diavik Diamond Mine in the Canadian North (Northwest Territories). Rio Tinto owns 60% of the property, where production started in 2003, and to date, rough diamonds totaling 6.2 million carats have been mined.
The Group, with a market capitalization of USD 140 billion, has a very favorable corporate valuation. Its shares currently trade at a 2022 P/E of 8 and promise a dividend yield of over 9%! Given these key figures, it is surprising that most analysts classify the stock only as a "hold" and forecast an upside potential of less than 10%.
SIEMENS AG - Third forecast increase inspires analysts
The recently published good figures for the third quarter and the renewed, already third forecast increase in the current fiscal year have boosted the Siemens share price in recent days. The 2021 high of just under EUR 146 is now within reach again. Several analysts' opinions were positive in the wake of the newsflow. The upward trend of the DAX share should therefore continue. The Group is benefiting from the economic recovery and the ordering behavior of its customers. Customers are increasing their inventories due to the shortage of components such as semiconductors and long delivery times. In addition, business with intelligent infrastructure is booming. Business at medical technology subsidiary Siemens Healthineers is also going well, which recently prompted the Company to raise its forecast for the current fiscal year.
Diamonds are a girl's best friend. But investors should also be enthusiastic about the sparkling stones because of their excellent prospects. First and foremost, companies that produce diamonds, such as Rio Tinto, or those about to do so, such as Diamcor Mining, are suitable investments. Rio Tinto has a very favorable company valuation. Diamcor Mining is at a much earlier stage of development. Here, risks and opportunities are correspondingly higher.