5 Best Nickel Stocks to Invest in 2023

The best nickel stocks are Rio Tinto, Anglo American, Vale, First Quantum Minerals, and BHP Group. These stocks are poised to perform well if demand for nickel continues to grow in the future. The price of nickel has been in an uptrend since 2016, although significant fluctuations in the price of this commodity are still happening.

Historical nickel price chart. Image source: tradingeconomics.com

Nickel is a base metal that’s used in making alloys, for example, stainless steel. Alloys containing nickel have a variety of uses. For example, they’re used in desalination plants, in the manufacturing of electric ovens, in shipbuilding, and much more. In addition, nickel is also used to manufacture batteries. Demand for nickel typically increases when the industrial and manufacturing sectors display growth. 

In 2020, Tesla CEO Elon Musk asked mining companies to make investments that would allow them to increase their production of nickel, since it’s an important component of batteries used by electric vehicles. Tesla is reportedly also considering a deal to build production facilities in Indonesia, and has reportedly signed $5 billion worth of contracts to buy battery materials from Indonesian nickel processing companies.

The growth of the electric vehicle market is poised to positively impact nickel producers, and could even make the nickel markets less cyclical. This is because the electric vehicle industry still has plenty of room for growth. 

The best nickel stocks: Explore 5 leading nickel companies

Now, let’s take a look at 5 of the best nickel mining stocks that can provide investors with exposure to nickel. 

*Data as of September 5, 2023.

1. Rio Tinto (RIO)

Rio Tinto is a global mining corporation that’s currently the world’s second-largest corporation in the metals and mining sector. The company is headquartered in the United Kingdom and Australia. Rio Tinto has operated with a profit in each year throughout the last decade. 

We should note that Rio Tinto is active in a number of sectors, not just nickel mining. Some of the company’s main segments include Iron Ore, Aluminum, Minerals, and Copper. As one of the world’s largest mining corporations, Rio Tinto has operations in 35 countries worldwide, giving it access to new mining opportunities that are out of reach for smaller competitors.

The valuation of Rio Tinto has increased significantly since early 2016 when it hit a low at a market cap of $33.8 billion. At the time of writing, Rio Tinto has a market capitalization of approximately $103.6 billion. If you’re wondering about potential future scenarios for this stock, make sure to check out our Rio Tinto price prediction.

2. Anglo American (NGLOY)

Anglo American is a multinational mining corporation headquartered in London. Anglo American is the world’s leading producer of platinum, and is also engaged in the mining of copper, nickel, iron ore, and other materials. Notably, Anglo American also owns the diamond company De Beers.

Anglo American is certainly worth considering for investors that are looking to get exposure to nickel. The company has two ferronickel production sites, which are both located in Brazil. In February 2023, Anglo American made a $24 million investment into the Canada Nickel Company. 

In 2022, Anglo American posted the second-best performance in the company’s history. The company currently has a strong balance sheet, although investors need to be mindful that a dividend cut is to be expected if commodity prices move to the downside. As of September 2023, Anglo American had a market capitalization of just below $29 billion. 

3. Vale S.A. (VALE)

Vale is a Brazilian mining corporation, and the world’s biggest producer of nickel. In addition to its mining operations, Vale is also involved in the energy and logistics sectors. 

Vale saw record earnings in 2021 thanks to surging commodity prices. The company is positioned well to take advantage of the growth in demand for iron ore, of which it’s also the biggest producer in the world.  

In addition to its iron ore and nickel mining operations, the company is also involved in the mining of manganese ore, copper, ferroalloys, cobalt, and more. Vale also mines precious metals such as platinum, palladium, and gold. As of the time of writing, Vale has a market capitalization of about $62.6 billion. At the time of writing, our Vale stock price prediction is forecasting sideways price movement for the next 12 months.

4. First Quantum Minerals (FQVLF)

First Quantum Minerals is a Canadian mining company founded in 1983. The company’s primary activity is copper mining, although it’s also involved in the mining of gold, nickel, cobalt, zinc, and other materials. The company is operating mines in 7 different countries, and could potentially expand to Argentina and Peru as well.

Compared to the other companies featured in this article, First Quantum Minerals has been more sensitive to commodity market cycles, which makes it a riskier bet. The company does have significant growth potential thanks to its expansion plans, but it also has a weaker balance sheet than many of its competitors due to interest expenses.

5. BHP Group (BHP)

BHP is a mining and metals corporation headquartered in Australia. BHP’s market capitalization of $148.8 billion as of September 2023 makes it the world’s biggest mining company. BHP is involved in the mining and production of nickel, copper, iron ore, metallurgical coal, and other materials. 

BHP is positioned well to benefit from the growth of the electric vehicle industry, and the size of its operations allows it to benefit from economies of scale. According to the company, it sells roughly 85% of the nickel it produces to the electric vehicle battery industry. 

Still, the performance of BHP Group is expected to see fluctuations due to the price swings that are common in the commodity markets. This can significantly impact the earnings and dividend payouts of mining corporations.

Best nickel stocks FAQs

How to invest in nickel?

There are four main ways to invest in nickel:

• Buy nickel stocks: This involves buying shares of companies that mine, refine, or process nickel. This is a more indirect way to invest in nickel, but it is also less risky and easier to manage.
• Buy physical nickel: Involves purchasing nickel bullion in the form of coins or bars. This is the most direct way to invest in nickel, but it also requires the most storage and security.
• Buy nickel futures contracts: Involves agreeing to buy or sell a certain amount of nickel at a certain price on a future date. This is a more risky way to invest in nickel, but it can also offer the potential for higher returns.
• Buy nickel exchange-traded funds (ETFs): Buying shares of an ETF that tracks the price of nickel is a less risky way to invest in nickel than buying futures contracts, but it also offers lower potential returns.

What are the best nickel stocks to buy?

The best nickel stocks to buy will depend on your individual investment goals and risk tolerance. Companies like Rio Tinto, Anglo American, Vale S.A., and BHP Group are generally considered a good buy for stock buyers looking to gain exposure to nickel.

Are nickel stocks a good investment?

Nickel stocks can be a good investment for investors who are looking for exposure to the nickel market. The nickel market is expected to grow in the coming years due to increasing demand from the electric vehicle and battery industries. However, the price of nickel can be volatile, and the companies that produce nickel are exposed to a variety of risks, such as changes in commodity prices, political instability, and environmental regulations.

Which company is the largest producer of nickel?

The largest producer of nickel is Vale. The company produced roughly 180,000 metric tons of nickel in 2022. 

The bottom line: Nickel producers will likely benefit from EV growth, but are still exposed to commodity market swings

As electric vehicles become more widely adopted, nickel is poised to see continued growth in demand since it’s a key component in the production of EV batteries. Investing in mining companies that mine nickel could therefore, be a good play, but investors need to be aware that this business has historically been very cyclical. However, this cyclicality could be partly negated if demand for nickel becomes particularly strong thanks to the growth of EVs.

The stocks highlighted in this article all pay dividends to stockholders. If you’re interested in other stocks that pay dividends, check out our list of the best long-term dividend stocks.