The Resurgence of Mining Stocks in the FTSE 100: A Strategic Buy Opportunity Amid Geopolitical and Economic Tailwinds

The FTSE 100 mining sector has emerged as one of the most compelling investment opportunities in 2025, driven by a confluence of macroeconomic tailwinds and geopolitical realignments. With Anglo American’s recent 9.6% surge in London-listed shares [3] and the broader index hitting record highs, investors are increasingly turning to miners to hedge against a shifting global economic landscape. This resurgence is not a fleeting trend but a structural repositioning fueled by Trump-era trade policies, a weaker U.S. dollar, and the urgent need to rebuild global supply chains.

Trump-Era Tariffs and the Commodity Super Cycle

The Trump administration’s expansive tariff regime, which targets $1.2 trillion in imports by 2026, has created both headwinds and opportunities for mining firms. While tariffs on Chinese goods have disrupted traditional supply chains, they have simultaneously boosted demand for raw materials critical to domestic manufacturing and green energy transitions. Copper, for instance, has surged to near-record highs due to its role in electric vehicles and renewable infrastructure [3]. Anglo American, now a top-five global copper producer following its transatlantic merger with Teck Resources [4], is uniquely positioned to capitalize on this demand.

According to a mid-year economic outlook by J.P. Morgan, these policy shifts are expected to generate broad-based inflationary pressures and slower global growth [4], which paradoxically strengthens the case for commodities. As nations decouple from China and prioritize “nearshoring,” miners with diversified geographies—like Anglo American’s operations in Chile, South Africa, and Brazil—stand to benefit from higher pricing power and reduced geopolitical exposure.

The Weakening Dollar and China’s Rebound

A second, often overlooked driver of mining outperformance is the U.S. dollar’s relative weakness in 2025. While the dollar remained resilient in early 2025, its decline from peak levels has improved investor sentiment toward emerging markets, particularly China. A report by Morningstar highlights that improved manufacturing data and signs of recovery in China’s property sector have reignited demand for base metals [1]. This dynamic is critical for FTSE 100 miners, as China accounts for over 50% of global copper consumption.

The dollar’s softness also amplifies the appeal of dollar-denominated mining equities for international investors. For example, Anglo American’s five-year total return of 66.34% [1] outpaces the FTSE 100’s 53.52% gain, reflecting its ability to thrive in a lower-dollar environment. As central banks in Europe and Asia continue to accumulate gold and other commodities to diversify reserves, the structural demand for mining assets is set to intensify.

Supply Chain Realignment and Strategic M&A

The Anglo American-Teck merger, finalized in Q2 2025, epitomizes the sector’s strategic shift toward consolidation and scale. By combining Teck’s North American assets with Anglo American’s global footprint, the firm now controls 5% of the world’s copper supply—a critical advantage as the energy transition accelerates [4]. This merger, coupled with similar deals in the sector (e.g., rumored Rio Tinto-Glencore talks [1]), signals a new era of industry concentration.

Such strategic moves are not just about scale; they are about resilience. The Trump administration’s push for “America First” manufacturing has spurred demand for secure, diversified supply chains. Miners with robust ESG frameworks and low-cost production profiles—like Anglo American’s low-carbon iron ore operations—are now seen as essential partners in this transition.

Valuation and Risk Considerations

Despite the bullish case, risks persist. Anglo American’s stock has declined 31% year-to-date [1], reflecting investor caution over near-term commodity cycles. However, this pullback presents a buying opportunity for long-term investors. At current valuations, the stock trades at a 20% discount to its five-year average price-to-earnings ratio, while free cash flow is projected to grow 15% annually through 2027 due to higher copper prices and operational efficiencies [3].

The broader FTSE 100 mining sector also offers defensive qualities. With the index returning 12.4% year-to-date [2], miners have outperformed most cyclical sectors, even as trade tensions and Fed policy uncertainty linger. This resilience underscores their role as a hedge against macroeconomic volatility.

Conclusion: A Strategic Inflection Point

The FTSE 100 mining sector is at a strategic inflection point, driven by forces that transcend short-term market noise. Trump-era tariffs, a weaker dollar, and supply chain realignment are creating a perfect storm of demand for commodities and mining equities. Anglo American’s recent performance—bolstered by its Teck merger and leadership in critical metals—makes it a standout play in this environment. For investors seeking exposure to a sector poised to benefit from both geopolitical and economic tailwinds, the time to act is now.

Source:
[1] Anglo American plc (AAUKF) Stock Price, News, Quote & History,
https://finance.yahoo.com/quote/AAUKF/
[2] Analysis of the international stock market situation (2025),
https://isdo.ch/analysis-of-the-international-stock-market-situation-summer-2025/
[3] Anglo American PLC Share Price | LON: AAL Stock,
https://uk.investing.com/equities/anglo-american
[4] FTSE 100 Live: Anglo American-Teck Merger Lifts Miners as FTSE 100 Surges 0.2%,
https://www.analyticsinsight.net/news/ftse-100-live-anglo-american-teck-merger-lifts-miners-as-ftse-100-surges-02-retail-in-focus